by Raymond J. Keating –
The U.S. energy sector is amazingly resilient, especially given that the federal government has been so virulently anti-U.S. oil and natural gas for 10 of the last 14 years, including under the current administration and Congress. Indeed, despite policy hostility during this period, and thanks to private investment, entrepreneurship and innovation, the U.S. has risen to become the world’s top oil and natural gas producer.
And along with increased production has come increases in U.S. exports.
Consider recent developments regarding U.S. natural gas exports, as noted in a recent “Today in Energy” report from the U.S. Energy information Administration. The EIA noted:
• “The United States began exporting liquefied natural gas (LNG) from the U.S. Lower 48 states in February 2016. As of July 2022, the United States has more LNG export capacity than any other country and has exported more LNG than any other country.”
• “U.S. LNG exports averaged 11.1 billion cubic feet per day (Bcf/d) during the first half of 2022. The seventh, and most recent, U.S. LNG export project—Calcasieu Pass LNG—placed all of its liquefaction trains in service by August, ahead of schedule. In addition to Golden Pass LNG, which started construction in 2019, two more projects on the U.S. Gulf Coast have recently begun construction.”
• “Once completed, the three export projects under construction will expand U.S. LNG peak export capacity by a combined 5.7 Bcf/d by 2025…”
For good measure, U.S. crude oil and petroleum products exports have increased rapidly over the past 15 years, as noted below.
This has been good news for the small businesses that overwhelmingly populate energy sectors. For example:
• 95.6 percent of employer firms in the oil and gas extraction sector have fewer than 100 employees.
• 93.2 percent of employer firms in the drilling oil and gas wells sector have fewer than 100 employees.
• 94.4 percent of employer firms in the support activities for oil and gas operations have fewer than 100 employees.
• 83.4 percent of employer firms in the oil and gas pipeline and related structures construction sector have fewer than 100 employees.
• 80.2 percent of employer firms in the oil and gas field machinery and equipment manufacturing sector have fewer than 100 employees.
And of course, increased U.S. production has benefitted individuals, families and small businesses. Consider how much worse energy cost issues would have been recently, given Russia’s war on Ukraine, if not for the increases in U.S. energy production over the past decade-and-a-half.
Again, these important developments have come amidst policy hostility in the U.S., including opposition to pipelines, opposition to oil and gas leases in federal territories, proposed and imposed tax and regulatory increases, and anti-free trade measures. Think about the benefits that would accrue to American entrepreneurs, small businesses, workers and consumers – and to the U.S. economy overall – if President Biden and Congress worked to encourage oil and natural gas development, such as via tax and regulatory relief, and advancing free trade.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.