SBE Council Chief Economist Weighs in on the Benefits of Energy Exports
By SBE Council at 10 January, 2013, 1:54 pm
Contact: Raymond J. Keating
Washington, D.C. – Today, Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), voiced grave concerns over efforts to restrict U.S. energy exports.
Keating pointed out, “Corporate special interests and various politicians have taken the bizarre position of trying to limit U.S. liquefied natural gas exports. Typically, efforts to limit trade by special interests have focused on restricting imports. But this misguided undertaking turns this on its head. It’s hard to believe that American interests are working to limit exports given their critical importance to our economy, and efforts by the Obama Administration to double exports by 2015.”
Keating explained, “The benefits of expanded exports have never been in doubt – until now, apparently, by assorted interests that mistakenly believe that energy production is some kind of zero sum game. Trade, of course, is mutually beneficial. It expands opportunity, enhances incentives for investment and expanded production, boosts competition, and increases income and employment.”
Key points regarding natural gas production were highlighted by Keating. He observed, “Advancements in technology have opened up vast resources of natural gas in shale rock that were previously not accessible. There is no reason to believe that such innovation and production will cease in the future. As a result, natural gas prices have plummeted in the U.S., and since prices remain high in other parts of the world, the potential exists for significant benefits to be derived from exporting liquefied natural gas. That’s a win-win for the U.S. economy, the small businesses and their employees that support the energy sector, and job creation.”
Keating added, “This is not just a big business issue. To the contrary, the energy sector is populated overwhelmingly by small and mid-size businesses. Quite simply, the effort to limit LNG exports is an effort to limit opportunity for American small businesses and entrepreneurs.”
According to Keating, among employer firms in the oil and gas extraction industry, 91% of firms have fewer than 20 employees, and 98.6% less than 500 workers; 80.3% of firms doing supporting activities for drilling oil and gas wells have fewer than 20 employees, and 97.8% less than 500 workers; 83.4% of firms in supporting activities for drilling oil and gas operations have fewer than 20 employees, and 98.7% less than 500 workers; and in the oil and gas pipeline and related structures construction business, 61.1% of firms have fewer than 20 employees, and 94.9% less than 500 workers.
Finally, Keating noted a recent Department of Energy study, which found that under all trade scenarios the economic benefits to the U.S. from LNG exports are significant and obviously exceed any localized costs that might emerge. Keating added, “That’s not surprising, given that the U.S. has an abundant and growing supply of natural gas, equal to a century-long supply at today’s consumption levels.”
SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For more information, please visit SBE Council’s website at www.sbecouncil.org.
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