How Can Businesses Sell to the Marcellus Shale Supply Chain?

A question often asked of MDN editor Jim Willis by small and medium sized business owners and managers is this: How can we do business with the drilling industry? That is, how can we plug into the drilling industry supply chain?

A new study (embedded below) released by the University of Pittsburgh’s Institute for Entrepreneurial Excellence aims to answer just that question. The study, titled “Understanding the Marcellus Shale Supply Chain,” outlines how the natural gas industry in Pennsylvania works, and how companies can plug into that system to provide goods and services.

From the Executive Summary of the report:

This project examines the overall supply chain for the Marcellus Shale development, principally located in and around Pennsylvania. This study seeks to fill a critical information gap on the nature of the supply chain, derived from the drilling and extraction of natural gas from Marcellus Shale deposits. The study first looks at the macroeconomics of the natural gas market, the major components of the supply chain, and an analysis of supplier characteristics, resources, and best practices. Shaun Seydor, Associate Director at the Institute for Entrepreneurial Excellence at the Katz Graduate School of Business, and Pitt Business Adjunct Professor Oda Bolden, led a Pitt student group of researchers in this analysis of the supply chain. Partnering with industry experts through interview, insight, and learning, the students were able to uncover many critical elements of the supply chain itself, as well as opportunities and support programs for supplier entry and education.

Our goal with this study is to provide a realistic picture of the current supply chain for natural gas drilling in Pennsylvania, primarily to provide information to small businesses and manufacturers. Section 2 provides a brief background to the Marcellus Shale industry and the critical issues that must be considered in the supply chain. Section 3 looks at the demand side of the natural gas industry, to first quantify and understand the components of the macroeconomic cycle. Section 4 addresses each major section of the supply chain, covering from exploration to natural gas marketing. Next, Section 5 looks at supply chain needs, including industries, selection practices, and supplier support. Section 6 wraps up by summarizing critical takeaways for the Marcellus Shale supply chain.