Federal Regulations Heavily Impact Wyoming Industry

Federal Regulations Heavily Impact Wyoming Industry

WYOMING — A recent study released by the Mercatus Center shows key Wyoming industries receive heavy federal regulation. While federal regulation is applicable in the same way in all 50 states, the study highlights the fact that these regulations can, by design, target specific states and their industries.


Weighing Federal Regulations

The Federal Regulation and State Enterprise (FRASE) index measures the impact of federal regulation on individual states, by weighting industry restrictions using the importance of an industry to a state relative to its importance to the country overall. Based off of the total weighted restrictions for Wyoming industries in 1997, Wyoming’s FRASE index increased by 38 percent from 1997 to 2013. During that same time period, Massachusetts’ FRASE index increased by 39 percent, Nevada’s grew by 74 percent and Kentucky’s grew by 43 percent.

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The graph below shows the top five mining industry regulators in 2013. Because Wyoming relies so heavily on mining, environmental regulators have the most impact on its economy.

Graph showing restrictions on the mining industry in 2013

According to the Mercatus Center study, petroleum and coal products manufacturing were the most regulated industries in 2014 followed by electric power generation, transmission and distribution. Oil and gas extraction were the ninth most regulated industries. A recent press release by Senator Enzi points out the fact that data for this study is from before the Obama administration’s “latest barrage of red tape.”

Another study released by the Mercatus Center indicates that “heavy regulation reduces entrepreneurship and employment opportunities and can divert investment from the most productive uses.” It further states that the accumulation of regulation has also been associated with diminished labor productivity growth. While this may be true, the nature of certain industries requires more regulations to ensure worker safety and as little effect on the environment as possible.

The graph below shows Wyoming’s top five industries and the amount of restrictions applied to them in 2013. There are other industries with a higher number of restrictions, but Wyoming’s industries have a greater effect on the Wyoming economy than the U.S. economy as a whole. Because of this, when new regulations are released, Wyoming is impacted more than the U.S. as a whole.