New Survey Reflects Pa.’s Strong Environmental Regulations, High Taxes

The Marcellus Shale continues to safely produce record-shattering volumes of clean-burning American natural gas – and “we’re just at the tip of the iceberg.” And because of the broad-based benefits tied to this tightly-regulated development, a clear majority of Americans support the “astonishing” energy revolution underway in the United States.

Yet, despite all of this positive progress – more jobs, cleaner air, strengthened national security and a manufacturing rebirth – Pennsylvania’s tax climate and strong environmental regulatory regime are a major deterrent for “attracting oil and gas investment,” according to a recently released survey by the Fraser Institute, Canada’s national, independent, non-partisan public policy think-tank.

The institute’s annual Global Petroleum Survey (press release & full survey) details how – relative to other U.S. states and countries around the world with oil and natural gas – Pennsylvania is far from the most competitive in terms of regulatory certainty and taxation (see pg. 88), and also underscores the Commonwealth’s strong environment enforcement framework (see pg. 89).

Leading the list for most attractive places to invest capital for oil and natural gas development with the largest proven reserves? Texas, Qatar, and Alberta – in that order.

Also, Platts’ Gas Business Briefing — under the headline “Texas, Oklahoma, Mississippi best states for O&G investment” — reports this:

  • Among the second tier of jurisdictions, representing 6.8% of total proven reserves, Oklahoma earned the top spot, followed by Arkansas and North Dakota. The third tier of jurisdictions, representing just 1.1% of total proven reserves, was topped by Mississippi, followed by Saskatchewan, Kansas, Alabama, Manitoba, and Netherlands/North Sea.

This week, the Pittsburgh Post-Gazette evaluated these survey findings. This from that story:

  • The Keystone State was rated highly for its fiscal climate, but those polled were apprehensive about its tax climate and environmental regulations, said the Vancouver, Canada-based Fraser Institute. The state’s fiscal climate did well among 73 percent of those polled, while a quarter said Pennsylvania tax issues hamper investment. Meanwhile, a whopping 62 percent said environmental regulations deter investment, more than in any other state except New York, where there is a statewide fracking moratorium, and California.

And writing in the Pittsburgh Post-Gazette yesterday, Pa. DEP’s Scott Perry, the agency’s top oil and gas enforcement official, underscores the Commonwealth’s “strong regulations”:

  • Under Gov. Tom Corbett’s leadership, strong regulations have already been developed and implemented to control emissions on well sites. Let’s begin with Act 13 of 2012. Among the strictest environmental laws in the nation overseeing oil and gas operations. … Pennsylvania has the highest environmental protection standards for the unconventional gas industry in our history.

These findings are a stark reminder that shale-related capital is hypercompetitive not only across our region, but even more so across the country and the world. Shale, as we’re finding out, is everywhere. And while the Marcellus is proving to be one of the world’s largest natural gas fields, more burdensome taxes and unnecessary, duplicative regulations – that will not create any additional environmental benefits or protections – will make Pennsylvania a less competitive place to invest, grow jobs and generate even more tax revenue.

As we have stated:

  • To be sure, new energy taxes will reduce development in Pennsylvania, and more capital – not less – will be directed to other states or countries. Every square inch of the Commonwealth is benefiting from this generational opportunity. It would be irresponsible and ill-advised to advance massive new energy taxes that would strike an unnecessary blow to one of our economy’s most important, thriving and promising sectors.

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