The latest jobs report was a mixed bag at best. While on the surface, the unemployment rate dropping from 7% to 6.7% looks like a positive step, scratching below the surface leads to a concerning trend. Much of the drop in unemployment is a factor of peple giving up on the job market, and not new job creation: More than than 37% of Americans are no longer working or looking for work, a level not seen since 1978. 13% of those with jobs consider themselves "underemployed," meaning they are working part time or not getting enough hours.

Will this falling participation in the working population put a damper on the prospects for domestic energy producers like Ultra Petroleum (UPL) and U.S. manufacturers like Cummins (CMI -0.25%)? What about Cheniere Energy (LNG -0.73%) and its massive export terminal project or Westport Innovations (WPRT 0.45%) and its momentum on natural gas vehicles? Let's take a closer look at how this impacts these companies.

ISX12 G nat gas engine. Source Cummins-Westport

Putting the brakes on natural gas vehicles?
Westport Innovations seems like it's finally getting some momentum, largely based on the early success of the ISX12 G engine it's jointly making with Cummins. After selling a couple thousand last year, the expectations are for more than 10,000 deliveries in 2014 as the trucking market starts adopting this -- the first major engine that can meet the power and fuel-efficiency needs for the majority of shippers like UPS and domestic manufacturers like Procter and Gamble, with known, regular routes.

There has already been a recent stumbling block with engines for heavy-duty applications. Last year, Westport discontinued its 15 liter HPDI engine, citing limited demand preventing it from making enough engines to be profitable. Interestingly enough, Cummins just recently delayed the launch of its own 15 liter natural gas engine, citing concerns about the availability of fuel limiting the market -- at least right now. With both Cummins and Westport delaying or scrapping this larger engine, how much of this is tied to concerns about the economy bouncing back? Probably not very much. Cummins' Roe East had this to say:

"My gut feeling is that most of the people buying the 12-liter today have dedicated fueling," East says – or run regular point-to-point routes. "The customer base demanding the 15-liter engine is more likely to run variable routes," he says. "They need to be confident that they can stop at a public station."

It sounds like Cummins is counting on demand for the ISX12 G leading to nat gas refuelers like Clean Energy Fuels and Royal Dutch Shell opening more stations over the first half of 2014, before deciding to commit $30 million in resources to the 15 liter engine. For shippers looking at the ISX12 G, the viability is higher, due to the more regular and predictable nature of the deliveries these trucks make. 

Canadian National Rail locomotive in testing with LNG. Source: CN

Not so fast: Fixed routes are the key
While domestic demand for crude oil is waning, natural gas demand should keep rising for the foreseeable future. Not only has it offset some use of coal to make electricity due to much less dirty emissions, but its use as a transport fuel should continue to grow. Westport works with Canadian National Railways and Caterpillar on engine technology for locomotives, including an LNG tender to supply LNG at the high pressures needed to generate high horsepower. 

The three companies are working closely together to co-develop technology to make natural gas-powered locomotives as reliable and efficient as possible. Rail, of course, isn't limited to the availability of fuel: It's pretty easy to know where the trains will run, after all. All in, locomotives, heavy trucks, and coastal on-water shipping (like ferries) use more than 40 billion gallons of diesel domestically, and the vast majority of these vehicles are running regular and predictable routes.

Sabine Pass liquiefaction and export terminal. Source: Cheniere

Production and export growth
Producers like Ultra Petroleum should continue to prosper, and exporters like Cheniere Energy should thrive. Natural gas prices are unlikely to collapse again, as demand picks up to match production growth. A big part of this growth will be from exports of natural gas at liquefaction and export terminals like the Sabine Pass project that Cheniere is building in Louisiana. The first of its kind in the U.S., this facility will be able to process and export up to 27 million metric tons annually (mtpa), all for export. Opening in 2015, this multi-billion dollar project will be the first of several to open over the next five years. With foreign markets like Japan and the U.K. having high demand and no domestic source of gas, the premium price Cheniere and its partners can charge will make exports viable and profitable, not to mention completely independent of domestic employment. 

Ultra Petroleum will be a direct beneficiary of this expansion in exports, with a large part of its business being natural gas production. Even its oil business -- which it grew significantly with the recent acquisition in the Uinta Basin in Utah -- is unlikely to be a burden even as domestic demand for oil dries up. According to the press release, the company can produce profitably from this area, with oil production costs (Brent crude is currently over $100) "well below" $75 per barrel in this region. 

Domestic energy and natural gas vehicles are a bright spot
Concerns about the jobs picture casting a shadow over any of these companies is overblown. Cheap domestic energy is actually a source of job growth in many areas, and has given companies like Cummins and Westport reason to build in North America. For long-term investors looking at the whole picture, this could be a great place to invest.