Survey looks to vendors supported by oil and gas industry

Posted September 9, 2014

Mike Bradwell
Observer Reporter

They do everything from manufacturing work gloves and valves to supplying portable toilets to work sites, or providing accounting or legal services, and they vary widely in size.

They’re vendors of goods and services to the country’s oil and gas industry, and according to the latest survey from the American Petroleum Institute, they’re thriving in the current U.S. energy boom.

During a telephone conference call with energy reporters from across the country, Erik Milito, API’s upstream group director, said the institute’s 2014 vendor survey lists nearly 30,000 operators, contractors, service companies, suppliers and other vendors that support oil and natural gas operations in every state and the District of Columbia.

He noted the numbers included only those companies that participated in the survey, adding that the actual number of vendors working with the industry is much larger.

In Pennsylvania, which is in the middle of a natural gas boom from Marcellus Shale, API, which broke out the number of vendors surveyed by states’ congressional districts, identified a total of 1,347 businesses related to the oil and gas industry, with 196 in the Pittsburgh area. When looking at Western Pennsylvania, the count widened to more than 600, with more than half of those – 337 – in the 18th (161) and the 9th (176) districts, which include Washington and Greene counties.

 

According to API, the oil and gas industry contributes $34.7 billion to the state’s economy, with 339,000 jobs supported by the industry.

The jobs are good-paying ones as well. The institute noted that while the average annual salary in Pennsylvania is $48,785, the average oil and gas industry salary here is $78,898.

API is the only national trade association that represents all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. Its 600 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline and marine business and service and supply firms.

“Oil and natural gas companies are only one part of a much larger economic success story that is creating job growth up and down the supply chain,” Milito said in introducing the survey. “From the folks who make work gloves to environmental consultants, these businesses represent just a small cross-section of the opportunities created by America’s energy revolution.”

He said the purpose of breaking out vendor numbers by congressional district was to show policymakers that the success of the oil and gas boom isn’t just focused on financial gains by big energy companies, but to demonstrate “that it’s not just an opportunity for the producer … but a major value chain that includes people who supply porta-potties to work sites, make work gloves, valves, or a mom and pop restaurant in Youngstown that feeds workers.”

Milito said API decided to survey the impact of the oil and gas industry on vendors around the country when it reviewed an earlier survey that found that exploration and production activities in the Gulf of Mexico was supporting businesses and jobs across the country.

A reporter asked if API supports protective measures that would ensure that use of more U.S.-made steel and tubular products by the oil and gas industry.

“We’re a free-trade organization that wants to promote free trade, but ask the government to ensure that our players are on an even playing field,” he said.