Small Biz Benefits Of Natural Gas Production And Exports

May 2: The Small Business & Entrepreneurship Council (SBE Council) published a new report entitled, The Benefits of Natural Gas Production and Exports for U.S. Small Businesses. The report highlights the significant growth in the number of employer firms and jobs in the energy sector between 2005-2010. According to the report, the job growth is most striking among small businesses. During this same period, total U.S. employment and firms experienced a decline. The findings of the report underscore the need for policies that encourage and enable this positive development for the U.S. economy.

    Raymond Keating, chief economist for SBE Council and author of the report said, "The tremendous increase in domestic natural gas production has been a boon for small business and job growth in the energy sector in recent years.  Looking ahead, growth opportunities for small businesses and employment in the U.S. energy sector look bright due to increased natural gas demand, including in international markets. The opportunity exists for exporting liquefied natural gas (LNG). Expanded demand for U.S. natural gas internationally will be a net positive, resulting in greater U.S. natural gas production, increased investment, enhanced GDP growth, rising incomes, and more jobs."

    On the jobs front, according to the report, while total U.S. employment declined by 3.7 percent from 2005 to 2010, jobs grew by 27.6 percent in the oil and gas extraction sector; by 15.1 percent in the drilling oil and gas wells sector; by 38.5 percent in the support sector for oil and gas operations; by 47 percent in the oil and gas pipeline and related structures construction sector; and by 62 percent in the oil and gas field machinery and equipment manufacturing sector.

    As for business growth, while total U.S. employer firms declined from 2005 to 2010, the number of employer firms grew by 3.1 percent among oil and gas extraction businesses (including 2.5 percent among firms with less than 20 workers); by 7.2 percent among drilling oil and gas wells businesses (including 4.7 percent among firms with less than 20 workers); by 24.5 percent among oil and gas operations businesses (including 24.5 percent among firms with less than 20 workers); by 5.1 percent among oil and gas pipeline and related structures construction businesses (including 3.5 percent among firms with less than 500 workers); and by 61 percent among oil and gas field machinery and equipment manufacturing businesses (including 59.0 percent among firms with less than 20 workers).

    The overall case of energy industries adding jobs and small businesses held in the 10 states -- Arkansas, Colorado, Louisiana, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, and Wyoming -- examined in the report where natural gas production was up markedly. The study also showed that each energy sector is overwhelmingly populated by small businesses. Keating noted, "The expectation that nearly two-thirds of LNG exports would be met via new production speaks to further strong growth for small and midsize businesses, and for employment." He said, "Policymakers -- at the federal level and in the states -- must make sure that policies support enhanced domestic energy production, and therefore increased opportunity for small businesses and workers. It is critical that they resist regulatory and tax measures that would undercut domestic energy production, including policies that would in any way limit natural gas exports."

    The House Energy & Commerce Committee, Subcommittee on Energy and Power will explore the benefits of increased LNG exports at a hearing on Tuesday, May 7. The hearing is entitled, "U.S. Energy Abundance: Exports and the Changing Global Energy Landscape." In a release from the Republicans on the Committee, Chairman Emeritus Joe Barton (R-TX) said, "The dramatic growth in natural gas production over the last decade has completely transformed our energy landscape and our economy. In the midst of a recession, Texas actually experienced employment growth thanks to this energy renaissance. Increasing natural gas exports and expanding the market for America's abundant energy resources will allow our economy to continue to thrive and bring more jobs and businesses to America."

    Witnesses scheduled to testify at the hearing include: Johnston & Associates; World Resources Institute; Columbiana County Board of Commissioners; Bipartisan Policy Center; Truman National Security Project; and UC Davis Graduate School of Management. Testimony has already been posted and may be accessed from the link below.

    Access a release from SBE Council and link to a summary of each state examined and a U.S. summary (click here). Access the 49-page report (click here). Access House hearing website for links to testimony and background information (click here). [#Energy/LNG]