LNG exports foster small business growth

According to a new report released by the Small Business & Entrepreneurship Council (SBE Council), additional LNG exports from the US have the potential to boost small business growth in the energy sector.

Energy revolution

“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.”

Oil and gas jobs

Examining employer data, the SBE Council report found that while total US employment declined by 0.3% from 2005 to 2012, jobs grew by 46.1% in the oil and gas extraction sector; 61.0% in the drilling oil and gas wells sector; 100.2% in the support sector for oil and gas operations; 66.1% in the oil and gas pipeline and related structures construction sector; and by 67.1% in the oil and gas field machinery and equipment manufacturing sector.

Key to this 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, however the number of small businesses in key energy sectors saw substantial growth. In particular:

• Oil and gas extraction businesses grew by 4.1% among firms with less than 20 workers and 4.8% among firms with less than 500 workers.
• Businesses drilling oil and gas wells grew by 7.9% among firms with less than 20 workers and 11.3% among firms with less than 500 workers.
• Businesses supporting oil and gas operations grew by 29.1% among firms with less than 20 workers and 31.3% among firms with less than 500 workers.
• Construction businesses related to oil and gas pipeline and related structures grew by 12.2% among firms with less than 20 workers, and 12.5% among firms with less than 500 workers.
• Manufacturing businesses related to oil and gas field machinery and equipment grew by 8.5% among firms with less than 20 workers and 14.7% among firms with less than 500 workers.

Growth states?

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 categorise 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.

‘Boost incentives’

Keating added: “Our energy boom has brought tremendous business, job and economic growth to the country, especially among small and midsize businesses, which historically have always been the driving economic force in our nation.

“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 Obama Administration needs to remove the impediments to LNG exports in order to allow our nation to fully embrace this economic opportunity.”

The report, ‘Benefits of Natural Gas Production and Exports for U.S. Small Business: Nationally and in the States’, can be accessed here.

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/14112014/report-highlights-business-growth-from-lng-exports-1792/