Back in 2010, Pennsylvania was as attractive to drill in as Cambodia. The state ranked 66th out of 133 jurisdictions worldwide, according to the Fraser Institute’s Global Petroleum Survey. Two years later, the Keystone State jumps to the 34th spot thanks to improvements in:
- Regulatory climate (72nd in 2010, 58th in 2012).
- Political risk (64th in 2010, 26th in 2012). In 2010, Pennsylvania House Democrats proposed one of the highest natural gas taxes in the nation.
- Labor availability, e.g., skilled workers and specialists (48th in 2010, 6th in 2012).
While Pennsylvania is improving, we’re far from the top. Neighboring states directly competing with Pennsylvania for jobs score significantly higher: Ohio (14th) and West Virginia (10th).
Regulatory burden, taxes and the state’s overall business climate matter. It’s no coincidence that Ohio’s ranking plummeted from the second most attractive place in the world to drill to 14th when politicians discussed more taxes and regulations on exploration. Significant changes in Ohio’s ranking include:
- Environmental regulations (11th in 2010, 17th in 2012).
- Uncertainty regarding current regulations (36th in 2010, 38th in 2012).
- Labor regulations (2nd in 2010, 20th in 2012).
In order for Pennsylvania’s ranking to continue to climb, policymakers shouldn’t enact new taxes or erect additional barriers to economic prosperity.