As many as 440,000 new jobs will be created by suppliers to shale oil and gas operations nationally by 2018 if the ban on U.S. exports of crude oil is lifted this year, Dale Leppo, chairman of rental company and distributor Leppo Inc., testified to the U.S. House of Representatives Small Business Committee this week.
Leppo told the committee the export ban has negatively impacted his company and the entire energy supply chain. Leppo said when the crude oil and natural gas markets weakened in late 2014, more than half of Ohio’s drilling rigs were shut down, causing his company to put an aggressive 2015 hiring plan on hold awaiting a market turnaround. Leppo Inc. subsidiary Razor Rents, which serves energy operators, increased its rental equipment fleet by more than 200 machines in 2014, but has stopped adding fleet since the slowdown.
“In the second half of 2014, Razor Rents’ business doubled versus the first half of 2014 as Utica Shale activity ramped up,” Leppo told the committee. “Ohio had 48 drill rigs operating by the end of 2014. As a result of that activity we added inventory and we hired staff to meet that demand. In 2014 we added 14 new jobs, many of which went into the support of the energy sector. Our Razor Rents rental fleet grew by 130 percent, from 154 to 355 units, which also created jobs for our manufacturing partners. In 2014, we purchased 45 new pieces of equipment from JLG Industries, almost all of which are manufactured either in Ohio or Pennsylvania. Each machine represents an investment of $80,000 to $140,000. We created three internships for students from Ohio State University Agricultural Technical Institute who then joined us full time upon their graduation.
“When the prices of oil and natural gas fell, so did that increased activity. The number of machines that we have on rent in the energy sector has fallen by 42 percent since the peak in late 2014.”
Leppo testified on behalf of the Energy Equipment and Infrastructure Alliance, an alliance of companies, trade associations and unions representing the shale oil and gas supply chain. His written statement to the Committee can be found on the association’s web site at www.eeia.org.
Leppo added that during the Ohio energy boom, there has been increased activity in the manufacturing of steel pipe, equipment such as forklifts, aerial work platforms, pumps, air compressors, generators and earthmoving equipment as well as investment in infrastructure to produce and get oil and natural gas to market investments in infrastructure for energy workers to sleep, eat and shop, and more.
