LNG exports may further boost US small business growth, report says
In the midst of a historic energy revolution, United States energy sector companies, particularly small and midsize businesses, are adding new businesses and jobs at a far greater pace than the overall economy, according to a new report by the Small Business & Entrepreneurship Council.
These gains, the report adds, could be expanded even further through additional LNG exports.
“Our country has undergone nothing short of an energy revolution over the past decade, shifting from the position of energy dependence to one of energy abundance,” said Raymond J. Keating, SBE Council chief economist and author of the report. “We are now the top natural gas producer in the world and the largest combined oil and natural gas producer. Our increased energy production has brought about tremendous small business and job growth with indirect benefits spreading up and down the supply chain all across the country. Expanding LNG exports would be the icing on the cake by encouraging future investments and the creation of even more businesses and jobs in our thriving energy sector. “
Examining employer data, the SBE Council report found that while total U.S. employment declined by 0.3 percent from 2005 to 2012, jobs grew by 46.1 percent in the oil and gas extraction sector; 61.0 percent in the drilling oil and gas wells sector; 100.2 percent in the support sector for oil and gas operations; 66.1 percent in the oil and gas pipeline and related structures construction sector; and by 67.1 percent in the oil and gas field machinery and equipment manufacturing sector.
The key part of this story is the growth in small and midsize businesses. Over the seven years covered in the study, the total number of small and midsize employer firms declined, but the number of small businesses in key energy sectors saw substantial growth. In particular:
- Oil and gas extraction businesses grew by 4.1 percent among firms with less than 20 workers and 4.8 percent among firms with less than 500 workers;
- Businesses drilling oil and gas wells grew by 7.9 percent among firms with less than 20 workers and 11.3 percent among firms with less than 500 workers;
- Businesses supporting oil and gas operations grew by 29.1 percent among firms with less than 20 workers and 31.3 percent among firms with less than 500 workers;
- Construction businesses related to oil and gas pipeline and related structures grew by 12.2 percent among firms with less than 20 workers, and 12.5 percent among firms with less than 500 workers;
- Manufacturing businesses related to oil and gas field machinery and equipment grew by 8.5 percent among firms with less than 20 workers and 14.7 percent among firms with less than 500 workers.
Overall, the report profiled 19 states in terms of natural gas production, employment in key energy sectors and business growth in each of those sectors in order to categorize each as a growth state, declining state or mixed state. All 12 growth states experienced both an increase in jobs and in the number of small and midsize businesses within the key energy sectors. Those growth states are: Arkansas, Colorado, Louisiana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, and Wyoming.
Keating further said, “LNG exports would boost incentives for further natural gas production in this country and bring about additional benefits in terms of economic, employment, business and income growth. However, the Administration needs to remove the impediments to LNG exports in order to allow our nation to fully embrace this economic opportunity.”
Press Release; Image: API