The shale oil boom of the last five years has created a surplus and has put pressure on the US government to lift its 40-year-old ban on exporting crude.
The ban was established by Congress after the 1970s Arab oil embargo that created fears of energy shortages. Unfortunately, only a handful of lawmakers are in support of lifting the ban. Most politicians have been reluctant to support relaxing the ban in fear of getting blamed for any unrelated rise in the price of gas.
Related: Obama Vetoes Keystone XL
According to the IHS report released Tuesday, “Unleashing the Supply Chain: Assessing the Economic Impact of US crude oil free trade policy,” lifting the four decade old ban would create some 394,000 to 859,000 US jobs annually from 2016 to 2030. Also, the report states that lifting the ban on crude exports would create a broad range of jobs in the oil drilling supply chain and the broader economy, even in states that produce little to no oil.
The broader economy would produce 60 percent of the jobs created while 30 percent would come from the supply chain, and 10 percent would come from oil production. Industries that support drilling, such as construction, oil field trucks, rail, and information technology would be created by the supply chain jobs.
States that are not known for oil production like New York, Washington, and others would originate many of the jobs.
Vice chairman at IHS Daniel Yergin stated, “The jobs story extends across the supply chain, right across the United States. It’s not just an oil patch story; it’s a U.S. story.”
Database management and big data analytics are the types of jobs created for drilling businesses in states like New York, which have a ban on fracking. The report states that if the ban is lifted the number of these jobs would increase. Manufacturing of engines, machine tools, and mining for fracking sand would create jobs in states like Illinois.
Exxon-Mobil (NYSE: XOM), ConocoPhillips (NYSE: COP), and Pioneer Natural Resources (NYSE: PXD) sponsored the IHS report and assumed drilling would not slow down due to campaigns by environmental groups.