Survey of energy investment competitiveness places Wyoming at top, California at bottom

The Fraser Institute's 2023 “Energy Sector Competitiveness Survey” put Wyoming at the top for the second year in a row. Down at the bottom of the 2023 list is California and Colorado, both of which have consistently ranked as the least competitive states for the past few years.

The study looks at how friendly states and Canadian provinces are to investments in oil and gas exploration and production facilities. It surveys senior executives in the upstream oil and gas sector, which is the portion of the industry that’s engaged in exploration, drilling, and extraction.

The survey asks executives if the regulatory environment of a state or province encourages or discourages investments and to what degree. It asks about environmental regulations, regulatory inconsistencies and duplication, regulatory enforcement, cost of regulatory compliance, labor regulations, the legal system and taxation, among other items.

Wyoming has steadily improved its regulatory regime, according to the surveys. In 2020, Wyoming was at 7 of 21 states and provinces, before climbing to the third spot in 2021. In 2022, it passed Texas to take the top spot.

“I think this report just goes to show that our leaders here in Wyoming understand where their funding comes from, and where the livelihood of the majority of Wyoming residents comes from. And they try to do their best to make sure that the regulatory framework supports the industry, while still also supporting the safety and environmental landscapes that we have here in Wyoming,” Ryan McConnaughey, spokesperson for the Petroleum Association of Wyoming, told Just The News.

Excluding Canadian provinces, Alaska came in seventh in the 2023 survey, and tenth overall.

Rick Whitbeck, Alaska state director for Power The Future, told Just The News it was encouraging to see the state had climbed from three spots over the previous year.

“If it wasn’t for the ongoing assault from the Biden administration on our natural resources economy – Alaska has faced a total of 56 executive or administrative orders since Biden took office – we’d rank even higher,” Whitbeck said.

Between 10% and 20% of Alaskan respondents rated environmental regulations, cost of compliance, taxation, trade barriers, quality of infrastructure, disputed land claims and protected areas as the biggest deterrents to investment in the state.

Larry Behrens, communication director for Power The Future, told Just The News it’s telling to see New Mexico and Colorado low on the list for encouraging investment.

“While their leaders would say they are business friendly, that’s clearly not the case when it comes to energy. What is clear is that the rhetoric emanating from politicians in these states is a massive obstacle to creating more jobs and prosperity,” Behrens said.

New Mexico came in at 12 of 17 in the 2023 survey. New Mexico’s survey respondents rated regulatory enforcement, taxation, and protected areas as the biggest deterrents to investment. Environmental regulations, regulatory enforcement, cost of compliance, labor regulations, taxation, and protected areas were the primary deterrents to investment in Colorado, according to the survey.

“Instead of blindly following the Biden Administration’s failed climate agenda, Western states should instead join together to tell Washington that the well being of working families comes first. Sadly, instead of leaders, all we see are political lemmings looking for more green handouts from Joe Biden,” Behrens said.

For California, the only items that weren’t barriers to investment, according to the survey, are the state’s legal system, its labor availability and security, which few respondents in other states and provinces rated as a problem.

Alaska and Wyoming, along with Oregon, are the states with the largest amount of land owned by the federal government. This means the operations of most oil and gas producers in those states are heavily influenced by federal regulations.

“There's no denying that the federal government plays a huge role in Wyoming oil and gas development, just given their outsized influence and ownership of the mineral estate here in Wyoming,” McConnaughey said, adding that it puts the state at a disadvantage to states like North Dakota where most operations take place on private land.

Whitbeck said that Alaska’s energy industry has had an especially rough ride under the current administration, which he said has to change for the state’s energy industry to improve.

“November can’t come soon enough for Alaskans who know we have a bright energy future, if only we’re allowed to balance responsible development with environmental stewardship,” Whitbeck said.