American Natural Gas Delivers “Tremendous Small Business and Job Growth”

A new report out this week by the Small Business & Entrepreneurship Council – a nonprofit, nonpartisan advocacy, research and education organization advocating on behalf of small businesses nationwide – found that the energy industry is “adding new businesses and jobs at a far greater pace than the overall economy.” The analysis also found that these new jobs and the businesses being formed are thriving “especially among small and midsize businesses.” This is great news for communities across Pennsylvania and the region.

The report, Small Business Growth from Natural Gas Production and Exports, examined both the macro benefits at the national level, as well as the impact energy development is having in states like Pennsylvania, home to the largest natural gas field in the United States.

Here are a few key findings related to development in Pennsylvania:

  • Natural Gas Production: Via the Marcellus Shale, Pennsylvania’s natural gas production expanded by 1,239.3 percent from 2005 to 2012.
  • Impact on Jobs: While U.S. total employment declined from 2005 to 2012, Pennsylvania jobs grew over 100% in all vital energy industries analyzed. Notably, jobs grew by 512.3 percent in the support sector for oil and gas operations.
  • Impact on Small Business: Each energy sector is dominated by small businesses, and business growth was strong in each between 2005 and 2012. For example, establishments supporting oil and gas operations with less than 20 workers grew by 173.3 percent, and those with less than 500 workers grew by 236.4 percent.

Pennsylvania

While the growth in Pennsylvania is nothing short of transformational, similar stories are playing out across the county, as highlighted by SBE Council chief economist Raymond J. Keating:

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 released today by the Small Business & Entrepreneurship Council (SBE Council). These gains, the report adds, could be expanded even further through additional liquefied natural gas (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.

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” Keating 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.”

Additional topline findings about the Keystone State are available in the full report and highlighted below:

  • Among oil and gas extraction businesses, the number of employer establishments grew by 37.3 percent, including growth of 29.0 percent among establishments with less than 20 workers and 37.3 percent among establishments with less than 500 workers.
  • Among drilling oil and gas wells businesses, the number of employer establishments grew by 100 percent, including growth of 73.0 percent among establishments with less than 20 workers and 95.8 percent among establishments with less than 500 workers.
  • Among supporting oil and gas operations businesses, the number of employer establishments grew by 237.7 percent, including growth of 173.3 percent among those with less than 20 workers and 236.4 percent among establishments with less than 500 workers.
  • Among oil and gas pipeline and related structures construction businesses, the number of employer establishments grew by 42.6 percent, including growth of 13.0 percent among establishments with less than 20 workers, and 42.6 percent among establishments with less than 500 workers.
  • Among oil and gas field machinery and equipment manufacturing businesses, the number of employer establishments grew by 9.1 percent, including growth of 40.0 percent among establishments with less than 20 workers, and 9.1 percent among establishments with less than 500 workers. The growth in both jobs
  • Among oil and gas extraction businesses, 77.7 percent of employer establishments in 2012 had less than 20 workers, and 100 percent had fewer than 500 employees.
  • Among drilling oil and gas wells businesses, 66.7 percent of employer establishments in 2012 had less than 20 workers, and 97.9 percent had fewer than 500 employees.
  • Among support for oil and gas operations businesses, 63.1 percent of employer establishments in 2012 had less than 20 workers, and 99.6 percent had fewer than 500 employees.
  • Among oil and gas pipeline and related structures construction businesses, 67.5 percent of employer establishments in 2010 had less than 20 workers, and 100 percent had fewer than 500 employees.
  • Among oil and gas field machinery and equipment manufacturing establishments, 58.3 percent of employer establishments in 2012 had less than 20 workers, and 100 percent had fewer than 500 employees.

For additional information on responsible shale gas development and the associated economic and environmental benefits of this clean-burning resource, visit our website, www.MarcellusCoalition.org and don’t forget to follow us on Twitter and like us on Facebook for the most up-to-date information on Marcellus related news and topics of interest.