Mississippi Emerges as Leader in Energy Sector with Passage of Landmark Legislation
18 Jul, 2013By: Brent Christensen
Economic developers and site selectors know well the dogged perseverance required to land and close a big project. This determination and drive has won Mississippi a string of recent economic development successes, like the announcement of Yokohama Tire Corporation’s manufacturing facility and the opening of a second GE Aviation jet engine facility in our state. Persistence and fortitude are ingrained in Mississippi culture and our core value system. Whether it’s football or the blues music we are known for throughout the world or economic development, when we decide to do something, we go all in.
When Governor Phil Bryant decided to make energy sector development a key focus of his administration, I knew he would go at it full-throttle. In 2012, Governor Bryant released Energy Works: Mississippi’s Energy Roadmap, outlining his vision for energy sector development in Mississippi and directing state government to work together with legislative leaders in unprecedented ways to address the challenges facing the energy sector head on. Since then, we have implemented those ideas and positioned Mississippi to lead the pack among the top states in the country for energy-related business investment.
Mississippi has chosen to focus energy-related recruitment efforts on four distinct sectors: Extraction and Energy Resource Development; Energy-Intensive Industries Recruitment; Developing Biomass Resources; and growing our Energy Component Manufacturing sector. Through Governor Bryant’s hands-on leadership, landmark energy legislation was passed in the 2013 legislative session. These new laws will open doors for energy-related manufacturing companies seeking a strong, favorable business climate in which to operate.
Mississippi enjoys energy costs that are approximately 20 percent below the national average. Building upon that key strength, one of our new laws eliminates sales tax paid on electricity for manufacturers starting in 2014. Adding this new tax policy to Mississippi’s already competitive tax structure and plentiful, reliable electricity and natural gas, positions the state for immense growth opportunities in energy-intensive manufacturing.
Mississippi is home to more natural gas pipeline infrastructure than any state in the nation. As a rural state, we saw a need to help bring natural gas and electricity to project sites in isolated areas. The newly created Energy Infrastructure Revolving Loan Fund gives our communities assistance to finance the cost of energy infrastructure for companies investing more than $50 million in an economic development project.
Another crucial piece of recently enacted legislation dramatically reduces the tax on oil and gas extracted from horizontally drilled wells from six percent to 1.3 percent – an 80 percent reduction. The emerging Tuscaloosa Marine Shale (TMS) play that lies under southwest region of the state is projected to produce high-quality oil in large quantities, where development is significantly ramping up. Experts expect TMS to be one of the most active resource plays in the United States once it reaches full production. This severance tax reduction will tremendously benefit companies as they fine-tune horizontal drilling techniques to produce oil and gas economically.
The state also places priority on investing in intellectual capital and research needed to take the energy sector, and the economy as a whole, to the next frontier. The Strengthening Mississippi Academic Research through Business Act (SMART) provides a 25 percent rebate on costs related to research and development – including energy-related R&D – to companies that collaborate with a state university. Mississippi is home to several universities conducting research in cutting edge energy fields like biomass, biofuels, nuclear, photovoltaics, magnetics and transportation fuels.
While these new energy laws will grow our energy sector moving forward, we boast a number of reasons companies already call Mississippi home. Mississippi has 30 railroad providers, including five Class I rail providers and 2,500 miles of mainline railroad track, six interstate highways and 15 ports, including deep-water operations on the Mississippi Gulf Coast. Our central U.S. location and integrated transportation network allows easy access to major markets.
Without a doubt, one of our greatest assets is our highly skilled, dedicated workforce. Numerous companies – domestic and global – have cited Mississippi’s workers as the primary reason they chose a Mississippi location. We are firmly committed to offering customized, quality workforce training programs through our state’s community colleges to meet the specific needs of companies investing in a Mississippi location. Customized training programs guarantee our workforce is equipped with the necessary knowledge and technical skills to ensure company success.
Additionally, our strong business incentives portfolio offers packages to best meet the needs of each company we partner with as they prepare to grow or strengthen their roots in Mississippi. MDA’s team of economic development professionals collaborates with local and regional economic development partners to deliver world-class services and assistance to its corporate partners.
Energy costs and resource availability are significant deciding factors for companies seeking a location for new investment. I am eager and optimist to witness the impact of this landmark energy legislation in our state. Mississippi is well-positioned for energy sector growth and I strongly encourage companies – domestic and international – seeking a U.S.-based location to invest in Mississippi.
Visit www.mississippi.org/energy-works to learn more about our new energy offerings. We stand ready to put these measures to work for you at a Mississippi location.