Study: Equipment Rental will Benefit from Shale Oil and Gas Development

In a just-completed study commissioned by the Energy Equipment Infrastructure Alliance (EEIA) and conducted by IHS Global Insight, the equipment rental industry is likely to generate approximately $26.7 billion in additional revenues between 2012 and 2025

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In a just-completed study commissioned by the Energy Equipment Infrastructure Alliance (EEIA) and conducted by IHS Global Insight, the equipment rental industry is likely to generate approximately $26.7 billion in additional revenues between 2012 and 2025.

The study entitled Supplying the Unconventional Revolution: Sizing the Unconventional Oil and Gas Supply Chain provides a detailed analysis of the unconventional oil and gas supply chain over 56 North American Industrial Classification System (NAICS) sectors representing well over 40 percent of the employment across the entire unconventional energy sector.  “The numbers are positive for every NAICS sector analyzed and there are tens-of-thousands of jobs created along with billions of dollars in economic activity over the 2012-2025 period analyzed by this study,” says John McClelland, Ph.D., American Rental Association (ARA) vice president, government affairs, and chief economist.

“The details of this report are impressive and the benefits widespread,” adds McClelland.  The report shows that the states producing unconventional energy from shale formations benefit substantially from the economic activity generated by developing these resources. However non-producing states also benefit because of the manufacturing, mining, transportation and services their businesses provide as inputs into the unconventional energy sector.

One example of an ARA member directly affected by the unconventional energy boom is Mark Gilbertson, owner, Fargo Rentall, Fargo, ND, and chairman of the ARA Construction and General Tool Shared Interest Group.

Gilbertson is quoted in the report saying “In recent years North Dakota has had a strong economy while much of the U.S. has struggled.  Part of this is due to the strong performance of established industries in the state like ranching, grain farming and coal. However, the development of the Bakken Shale formation has been the fundamental driving force in the rapid and sustained growth of the State’s capital stock and specifically in the amount of rental equipment working in North Dakota. We have experienced multiple years of double digit growth in our rental fleet that is only constrained by our access to capital. Simply put, the sky is the limit!” 

“ARA became a founding organization member of EEIA and supported the study with our long-term research partner IHS Global Insight because we want to understand the impact of the unconventional oil and gas supply chain on the equipment rental industry,” says Christine Wehrman, ARA CEO. “ARA has a long history of conducting industry research and this study, along with the additional work we are planning with IHS Global Insight on the demand for specific rental equipment in the unconventional energy sector, is an important way we provide value to all ARA members,” added Wehrman.

A copy of the report, the executive summary and supporting tables is available at www.ihs.com/shalesupplychain.

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