The Case for Regional Planning in Energy-Rich States

Planning can buttress market processes if it provides accurate information to economic decisionmakers. GAO has studied the extent of long-term planning in the currently prosperous Southwest region of Texas, Oklahoma, and Louisiana which has relied on the oil and gas industry as a major stimulus for economic growth. Both production and proven reserves of these nonrenewable resources are declining. The Southwest region should plan now for its future economic well-being because both public and private sectors have become dependent on the oil and gas industry. The Federal Government can help promote economic stability in the region by encouraging planning efforts and by removing unwarranted regulations that create production disincentives. The oil and gas industry generates a relatively large share of public sector revenues in severance taxes, rents, and royalties. Public officials in each of the three States are ambivalent about long-term diversification planning. State programs encourage short- rather than long-term planning. Both the executive and legislative branches of the Federal Government should actively encourage long-range planning efforts. Already established Federal programs can revise their focuses to include support of long-term planning. Congress can ensure that the broad issue of balanced regional economic growth receives sufficient attention.