A survey of oil and gas investors finds fewer of them putting their money into Ohio.
A report from the Fraser Institute finds investment in Ohio by oil and natural gas drillers is pulling back a bit. The survey of petroleum executives and managers about barriers to oil and gas investment in areas throughout the world ranked Ohio 14th. The state was second last year.
Tom Stewart with the Ohio Oil and Gas Association says it is proof that energy companies are hesitating to invest in Ohio due to uncertainty about taxes and regulations.
The report says increased regulations within the past year to year-and-a-half have made it much more difficult to do business in the oil and gas industry. It also cited Gov. John Kasich's proposal to raise the severance tax to pay for an income tax cut for Ohioans as another hurdle to investing in Ohio.
"The tax increase is based on an emerging Utica Shale play that has yet to be proven economic. The recent proposed tax increase and new regulations make investment in Ohio much less desirable," the report said.
"That's something that we as an industry, state government, and certainly the General Assembly need to seriously consider," Stewart said.
Stewart says an earlier report supporting Kasich's plan estimated the price of a well to be $2-$4 million. It's actually closer to $10-$12 million he says.
"If we do what we want to do Ohio remains more competitive than our neighbors," said Rob Nichols, spokesman for Gov. John Kasich.
He says an updated study does take the increased drilling price into account and Ohio is still lower than neighboring states. Nichols calls the plan a win-win for Ohio.
"We get the benefit of the jobs in the industry and by driving down the income tax Ohio's small businesses are able to hire again."
But Stewart says just because drilling companies have already committed millions to buy mineral rights doesn't mean they are forced to go forward with drilling. He says those investments are only a small percentage of their overall drilling budgets.
Nichols says concerns about regulations have been addressed with the recent passage of Kasich's mid-budget review.
Lawmakers still haven't taken action on Kasich's tax proposal.