Guest Post by Willie Deutsch
In the 2014 Midterm Elections, voters supported candidates whose platforms focused on job creation for small businesses. This comes as no surprise, given that between 2005 and 2012 overall employment declined, adding the strain of economic turbulence to all of the other challenges small businesses face throughout the commonwealth. Most Virginians believe a healthy economy is reflected by small business growth, and they want policies that promote growth.
In a recent report by the Small Business and Entrepreneurship Council titled “Benefits of Natural Gas Production and Exports for U.S. Small Businesses,” economist Ray Keating explains how expanded natural gas production across the country has spurred job creation within the small business community, especially in Virginia. The report states that the Commonwealth’s production has expanded by over sixty-five percent from 2005 to 2012. As a result, businesses supporting oil and gas operations have quickly grown. For example, jobs within the oil and gas pipeline and related structures construction sector have grown by over 100 percent over the same period. While overall job growth was barely one percent, Virginia’s energy sector has continued to produce job and business growth opportunities.
These job increases correlate directly to Virginia’s small business community. According to the report, Virginia’s energy sector is overwhelmingly populated by small and mid-size businesses. In the five energy industries evaluated in his report, Keating notes that businesses with less than 500 employees make up at least 90 percent of employer establishments. Native small business enterprises are able to capitalize on the domestic shale revolution by hiring more employees to handle operations.
It would make sense, then, to support policies that allow oil and gas related small businesses to continue to grow. Unfortunately, current federal policies restricting natural gas exports undermine this effort. If Virginians want to support the continued expansion of oil and gas sector small businesses, it would be prudent to support unencumbered natural gas exports. As Economics 101 teaches us, a larger market will incentivize production which will in turn allow businesses to hire more employees. Doing so would create more jobs, increase GDP, and promote economic stability throughout the state.