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Six U.S. states were ranked in the 10 global jurisdictions – Texas (ranked No. 1), Oklahoma, North Dakota, West Virginia, Kansas and Wyoming.

With the U.S. administration pursuing major tax reforms and reducing regulatory red tape for the energy industry, American jurisdictions could be viewed even more favourably in coming years, Green said.

“The shackles are being taken off the U.S. energy sector, which spells trouble for Canadian jurisdictions trying to attract oil and gas investment dollars.”

Green said oil and gas investors watch policy changes closely and respond quickly if they feel an area’s risk has increased. Investment decisions tend to be 40 per cent based on policy and 60 per cent on the quality of the resource.

“Canada is plagued by regulatory uncertainty and legal disputes, which is preventing our resources from accessing new markets,” said one unnamed survey participant. “The window of opportunity for Canada’s LNG industry is closing and major energy opportunities are being lost. Disputes between the provinces and the federal government are causing excessive delays and will result in fewer economic opportunities for Canada.”

A region’s investment attractiveness can also quickly rebound if policies become more favourable — though it takes longer in Canada to regain investor confidence because projects tend to be located in remote areas where skilled labour and management capabilities are harder to rebuild, Green said.

“Canada — particularly with what seems to be absolute gridlock on transport of oil and gas and export of LNG — is on the brink of its most capable energy jurisdictions staying in the very lowest level of the rankings, with Texas, and Oklahoma and other areas basically capturing the profits that Canada is walking away from,” he said.

Financial Post

ccattaneo@nationalpost.com