The George W. Bush Institute held a thoughtful conference on energy regulation yesterday in Dallas. I was particularly struck by the panel discussion featuring governors from two states that know a thing or two about energy production.

Ed Shafer, the former governor of North Dakota, discussed the steps his administration took during the previous decade to create the environment in which Bakken Shale development could occur and the state’s economy could flourish. His philosophy, he explained, was “to be mindful of our tax and regulatory policies that affect the cost of doing business.”

That sounds like common sense, but not every state understands such a basic concept. As Shafer pointed out, “California has five of the 12 largest oilfields in the United States of America and a hugely burdensome structure of tax and regulation, and North Dakota is outproducing them.”

He continued:

Look at the North Dakota experience. We generated a tax and regulatory structure that sought investment. That investment came with good rates of return. And it energized the state of North Dakota and is … affecting the whole economy. Over the last 10 years our wage income growth in North Dakota has grown 86 percent, the personal income growth has been 100 percent, our GDP growth has been 150 percent.

Current Pennsylvania Governor Tom Corbett talked about his state’s experience with energy production from the Marcellus Shale. When he took office in 2011 he assembled a group of advisors to work out issues of state regulation of hydraulic fracturing.

Their challenge, he said, was “how do we address this as a state, leaving the federal government out of it? Because we believe the states are the ones in charge of protecting their environments. We have the greatest concern about our environment.”

That last sentence says a lot. Officials in Washington may profess great concern for the environment in places like Pennsylvania or North Dakota. But the local officials in those states naturally will have the greatest concern, as well as the best understanding of their particular region. The geology and environmental conditions are different in various locales, which is why regulation is best left to the states.

As Gov. Shafer said about the federal government’s approach to regulation, “The only way the United States knows how to operate is with one size-fits-all.”