Oklahoma and Texas are more attractive than Alberta to invest in oil and gas, according to a new survey of petroleum-sector executives released by the Fraser Institute.
“Canada’s onerous and uncertain regulatory environment, along with our lack of pipeline capacity has created a significant competitiveness gap between Canadian and American jurisdictions,” said Elmira Aliakbari, associate director of the Centre for Natural Resource Studies at the Fraser Institute and co-author of the Canada-US Energy Sector Competitiveness Survey.
The survey, conducted between May and August of 2020, ranks 21 North American jurisdictions (16 states and five provinces) based on policies affecting oil and gas investment.
Oklahoma ranked in first while Alberta ranked 12th out of 21.
Investors pointed to the uncertainty concerning environmental regulations, the cost of regulatory compliance, and regulatory enforcement as major areas of concern in Canadian provinces compared to U.S. states.
In particular, only 16 and 24 per cent of respondents in Oklahoma and Texas, respectively, specified that uncertainty around environmental regulations is a deterrent to investment. In Alberta, the number sits at 64 per cent–more than twice that of both states.
“Policies matter, and when the oil and gas sector is very clearly indicating that American jurisdictions are more attractive for investment, policymakers should take note,” said Aliakbari.
Likewise, 65 per cent of respondents identified the cost of regulatory compliance as a deterrent to investment in Alberta compared to only 24 per cent for Texas.
Rounding out the top five most attractive jurisdictions for oil and gas investment are Kansas (2nd), Texas (3rd), Arkansas (4th) and Utah (5th).
Among the survey’s 21 jurisdictions, Saskatchewan (eighth) was the only Canadian province to make the top ten, while British Columbia (20th) continues to pose the greatest barriers to investment among Canadian provinces included in the ranking.