The U.S. energy sector – namely, crude oil and natural gas – has experienced a breathtaking rebirth over the past 15 to 20 years thanks to innovations and technological advancements in the areas of hydraulic fracturing and horizontal drilling.
The U.S. not only has seen a transformation in terms of becoming the largest energy producer on the planet (see SBE Council analysis), but also a dramatic change on the trade front. That is, exports have risen dramatically, as seen in the following two charts.
Source: U.S. Energy Information Administration
Source: U.S. Energy Information Administration
It also should be noted that exports have been moving in a positive direction on the coal front as well since the early 2000s, though more volatile from year to year.
The following chart shows coal exports through 2020. It also should be noted that coal exports for all of 2021 are expected to have come in at better than 83 million short tons and projected to reach nearly 100 million short tons in 2022. Those would be up from approximately 69 million short tons in exports in 2020.
Source: U.S. Energy Information Administration
These enhanced export opportunities are good news for the small businesses that overwhelmingly populate key energy sectors.
For example, in the drilling oil and gas wells sector, 93.2 percent of employer firms have fewer than 100 employees, according to the latest Census Bureau data (2019).
And in the support activities for oil and gas operations sector, 94.4 percent have fewer than 100 employees, and in the support activities for coal mining industry, 83.5 percent have fewer than 100 workers.
Reversal of Biden Energy Policies Needed
The Biden administration and Congress would do well to roll back the tax and regulatory threats and burdens pointed at the fossil fuel sectors, and instead, recognize these industries as sources of great opportunity for economic, income, small business and job growth.
That also would include stepping back from protectionist measures, and get the U.S. back to advancing free trade accords that reduce governmental barriers to trade, which not only would serve U.S. domestic firms in terms of imports being inputs to their businesses, but also by expanding international opportunities for exports.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
Source: https://sbecouncil.org/2022/02/28/energy-export-growth-and-opportunities-for-u-s-small-business-and-workers/