There’s nothing moderate or reasonable about Senate Bill 310

john kasich
john kasich

Governor John Kasich will ultimately decide the fate of Ohio’s clean energy future. God help us all (courtesy of the Toledo Blade).

Ever since Senator Troy Balderson (R-Zainesville) first introduced SB 310 back in March, the bill’s proponents have continually tried to paint themselves as unbiased, reasonable actors who are just working to defend the best interests of Ohio’s consumers.

They routinely emphasize the supposed uncertainty around the effects of the state’s energy efficiency and renewable energy standards and point to an Energy Mandates Study Committee, which will analyze the standards during the two-year freeze and propose potential changes, as proof that they are reasonable actors who are standing up for ratepayers.

Senate President Keith Faber (R-Celina) told the Columbus Dispatch “What we want to do as a legislature is put procedures in place that are based on evidence and science.” He added, “We’ve spent $1.1 billion since 2009 on energy efficiency. … I’m not quite sure what we’ve gotten out of it.” The Study Committee is supposedly intended to solve this (non) issue.

Senator Frank LaRose (R-Akron) went so far as to claim that his work to “moderate” the bill provided that he was a true statesman.

And Governor John Kasich, who will ultimately decide whether Ohio continues to move forward or dives headlong into its coal-fired past, released a joint statement with Sen. Faber that read, “By temporarily holding at our current level while problems are ironed out, we keep the progress we’ve made, ensure we steadily grow new energy sources and preserve affordable energy prices for both businesses and consumers.”

So, given the centrality of this Study Committee to the GOP’s claims that they acting reasonably and in the best interest of Ohioans, you would think it would include experts on the issue and take a sober, neutral approach to its task. Yeah, not quite.

Here’s the actual text that creates the Energy Mandates Study Committee in SB 310 (emphasis is mine):

Section 3. It is the intent of the General Assembly to ensure that customers in Ohio have access to affordable energy. It is the intent of the General Assembly to incorporate as many forms of inexpensive, reliable energy sources in the state of Ohio as possible. It is also the intent of the General Assembly to get a better understanding of how energy mandates impact jobs and the economy in Ohio and to minimize government mandates. Because the energy mandates in current law may be unrealistic and unattainable, it is the intent of the General Assembly to review all energy resources as part of its efforts to address energy pricing issues.

Therefore, it is the intent of the General Assembly to enact legislation in the future, after taking into account the recommendations of the Energy Mandates Study Committee, that will reduce the mandates in sections 4928.64 and 4928.66 of the Revised Code and provide greater transparency to electric customers on the costs of future energy mandates, if there are to be any.

Setting aside the fact that the bill’s authors clearly don’t understand how to use the word “impact” correctly, the intent of this section is quite clear. The Ohio GOP wants us to believe they just plan to “study” the state’s clean energy standards to see if they can decipher their effects and, if necessary, make changes. But, as you can see, the writing is already on the wall.

SB 310 predetermines the outcome of the Study Committee, and it inevitably guarantees that the standards will be watered down heavily during the two-year freeze, if not killed entirely. The bill calls them “unrealistic and unattainable” and lays out the GOP’s intention to “minimize government mandates” and “reduce” them going forward. The goal is blatantly transparent.

We don’t need to continue spending hundreds of hours and tens of thousands of dollars on frivolous studies from partisan lawmakers. The evidence that Ohio’s clean energy standards are benefiting Ohioans is overwhelming. Researchers at Ohio State say so. The Public Utilities Commission says so. Hell, even the utilities say so!

There’s nothing fair or reasonable about SB 310, no matter how much its proponents bloviate. As Terry Smith said so well in Sunday’s edition of The Athens News,

Anyone familiar with the arguments of climate-change deniers will see some of their rhetorical flourishes in Balderson’s vague references to gimmicks and slogans gussied up with a gratuitous fealty to science. That’s their perverse way of casting doubt on the overwhelming global scientific consensus that climate change is happening now, is getting worse, and is mainly caused by human-kind’s burning of fossil fuels.

Plus, as critics of S.B. 310 have pointed out and the utilities themselves have admitted, money spent on energy-efficiency standards will recoup twice as much in savings.

If Ohio wants to continue sliding backward into the darkness, while its elected representatives happily collect rent from the fossil-fuel and electric utility industries, and their allies in the dark world of Koch, it makes perfect sense to double down on coal- and gas-fired electric power and flea-market-level severance taxes for oil and gas.

You almost wish the GOP leadership had the guts to come out and admit their true intentions. But they know that, if they did, Ohioans would revolt. So they hide behind their false facades of reasonableness and rationality so they can keep the money flowing from the fossil fuel industry. It’s worked up to this point, but you can only stem the tide of history for so long.

When your state doesn’t fund public transportation, you end up with this

bus stop at route 237 & Eastland Road
rta healthline buses

RTA HealthLine buses in downtown Cleveland (courtesy of Cleveland.com).

Jason Segedy, the remarkably progressive Director of the Akron Metropolitan Area Transportation Study (AMATS), the metropolitan planning organization (MPO) for the Akron area, has the full text of an interview he did with Mark Lefkowitz of GreenCityBlueLake up at his blog. In the interview, he discussed the changes that we need to make in Northeast Ohio in order to enhance public transportation and make it a viable alternative for residents. It’s well worth reading.

In the interview, Jason discusses what we need do in order to develop a big picture for public transit at both the metro and regional level going forward. But he also gets down into the minutiae that really affects the daily experiences of public transit users, including

things like improving rider safety (mostly perception of safety); ease-of-use (using smart phone technology to give real-time travel information and for electronic fare payment); improving transit waiting environments; improving walkability and bikability to transit stops; and working more closely with local governments and private developers to improve signage, wayfinding, and to institute transit-friendly urban design.

I have used public transportation extensively both in Cleveland and Washington, DC, where (despite all of WMATA’s many, many problems), living car free is actually a viable option. Unlike in DC, in Cleveland I cannot use a smart phone app to check when the next bus or train arrives, I cannot reload my fare card online, and I am often unable to escape the elements when riding the bus or rapid.

In many ways, as Jason pointed out yesterday, these types of quotidian issues are what really controls whether or not people will utilize transit. And one of the most crucial issues is that of rider comfort and safety. If people don’t feel safe from harm at bus stops and rapid stations, they won’t come back the next time. It’s no wonder that the Greater Cleveland RTA has to spend thousands of dollars on commercials assuring Clevelanders that taking the bus isn’t as bad as getting a root canal.

But, given the state of Ohio’s absolute refusal to invest in public transportation, riding the bus or rapid in this region can often feel like a chore. As a state, Ohio spends less public transportation than all but 3 others.

Funding for transit in Ohio has fallen by three-quarters (PDF), from $44.22 million in 2000 to just $10.87 million by 2010. And whereas other states provide, on average, 23% of total operating funds for transit agencies, Ohio contributes a whopping 3%. When you break it down on a per capita basis, the state spent just $0.94 per Ohioan in FY 2010, less than every other state in the Great Lakes region. Even that car-dependent state up North spends $19.98 per capita, over 21 times more than the Buckeye state.

Much of this stems from the fact that the Ohio constitution bars the use of gas tax revenues for anything but highway construction and maintenance, meaning that all transit funding must come from the state’s general fund. And of the minuscule amount of funding the state does provide, just 3% of it goes towards capital expenditures. As a result, without federal grants like the TIGER program, few, if any, new public transportation projects would go forward.

That virtual absence of funding for transit and ODOT’s infatuation with sprawl leads to situations like what you see below. This is an actual bus stop in Northeast Ohio. While I obviously haven’t seen every possible bus stop in the 7-county area, this is easily the most dangerous and least rider-friendly stop I have ever come across.

bus stop at route 237 & Eastland Road

An actual stop for the #86 bus alongside Route 237 in Cleveland (courtesy of Google Maps).

This bus stop is located where Eastland Road meets Route 237, just across from Hopkins Airport and the I-X Center. If you look closely enough, you can just make out the small, blue RTA bus stop sign.

Route 237 is a restricted-access highway with a 50mph speed limit. In other words, you aren’t even allowed to walk or bike on the road due to the dangerous speed at which traffic moves, but you can wait for a bus 3 feet away from passing cars. And if you need to cross to the other side of 237 for any reason, keep dreaming. There’s no intersection anywhere near it. I don’t know if anyone has been killed or injured waiting for a bus here, but if not, it’s just a matter of time. Ohio has completely abrogated its responsibility to fund alternate transportation, and the end result is this kind of nightmare for public safety.

So what are the worst/most dangerous bus stops you’ve come across in Northeast Ohio? Share you pictures in the comments or send them to me directly. Maybe we can shame ODOT into changing it’s reckless ways. Probably not.

Watch the GOP destroy Ohio’s clean energy industry with this one weird trick

ohio statehouse
ohio statehouse

The Ohio Statehouse (courtesy of Wikimedia Commons)

Tom Knox at Columbus Business First just outlined a little-known but incredibly significant part of SB 310 that will have wide-ranging implications for the future of Ohio’s clean energy industry.

From the post:

The bill would allow utilities under a renewable-energy contract to be released from the agreement “if there is a change in the renewable energy resources requirements,” according to the latest version of Senate Bill 310, passed by the Ohio Senate last week and being heard Tuesday in the House Public Utilities Committee.

If American Electric Power Company Inc. (NYSE:AEP), for example, signed a 20-year purchase agreement with a wind turbine company to provide some power for its customers, any future change in renewable energy requirements would allow AEP to void its contract.

While it would not affect existing renewable energy contracts, such as FirstEnergy Solutions’ deal to purchase power from the Blue Creek Wind Farm, it would apply to any new renewable energy contracts signed by one of the four investor-owned utilities after SB 310 becomes law. As Knox notes,

Without a two-decade guarantee of revenue, financial backers of wind projects would be hard-pressed to put up money.

“That is the ultimate done deal, it’s over, kiss all wind renewables gone,” said Jereme Kent, general manager of Findlay-based wind company One Energy LLC. “Even if wind was half the price, you could not sign a contract with that provision.”

With all of the attention surrounding the other God awful provisions in SB 310, including the two-year freeze and the elimination of the requirement that 50% of renewable energy is produced in Ohio, this small clause, buried on line 950 of the legislation (PDF), has been overlooked. Here’s the actual text in question:

Sec. 4928.642.  Every contract to procure renewable energy resources or renewable energy credits entered into by an electric distribution utility or an electric services company on or after the effective date of S.B. 310 of the 130th general assembly shall contain a change-of-law provision. Such a provision shall provide that the parties to the contract are released from their obligations under the contract if there is a change in the renewable energy resource requirements, governed by section 4928.64 of the Revised Code.

Without question, these 80 words inject so much uncertainty and chaos into Ohio’s burgeoning renewable energy industry that they may effectively strangle it in its crib. It’s hard to see any utility-scale renewable energy project getting financing when the utility can simply renege on its deal if any changes are made to SB 310 going forward.

Interestingly, this section was not included in the original form of SB 310 (PDF), as it was introduced to the Senate in March. Rather, someone slipped it in behind closed doors when the GOP leadership rewrote the bill last week.

Given the hands on-role that Governor Kasich played in changing the bill, I can’t help but wonder whether or not he was involved in inserting this section or was aware of it before the bill reached the Senate floor. Either way, the existing of this provision and the Governor’s apparent indifference (if not approval) for it clearly belies his supposed support for the 25,000 clean energy jobs in this state.

In his official statement with Senate President Faber last Thursday, the Governor claimed that SB 221’s standards “are now emerging as a challenge to job creation and Ohio’s economic recovery.” That could not be farther from the truth. The real challenge to job creation and economic growth is SB 310 itself.

The stakes just got even higher in this fight. You can no longer pretend to back clean energy and the jobs and economic development it creates if you support SB 310.

The Opportunity Corridor is an environmental justice disaster

opportunity corridor map

Map of the proposed Opportunity Corridor path (courtesy of the Ohio Department of Transportation).

There is no question that environmental justice (EJ) is and has long been one of the key civil rights issues facing this country. While we may not think about the issue, perhaps because the environment is seen as some amorphous, natural entity, environmental quality varies significantly based on location and socioeconomic status.

Decades of research shows that poor communities of color are far more susceptible to the deleterious effects of air, water, and soil pollution (PDF) than other groups. Though the issue continues to loom large, the country has made progress over the last two decades.The EPA has an Environmental Justice division, an offshoot of Executive Order 12898, which President Clinton signed 20 years ago this February. All 50 states and the District of Columbia now have some sort of EJ legislation or policy on the books.

But despite these successes, much remains to be done. A new study from researchers at the University of Minnesota in PLOS One shows clearly that racial disparities in air quality remain a serious issue (PDF) for public and environmental health in the US.

The authors compared Census data to national information on exposure to nitrogen dioxide, NO2, one of six criteria air pollutants as set by the EPA. Based on the analysis, average NO2 concentrations were 14.5 parts per billion (ppb) for nonwhites, compared to just 9.9ppb for whites. Accordingly, nonwhites were exposed to 38% higher levels of NO2. Exposure also broke down along income levels.

no2 disparities by county

County level differences in population-weighted mean NO2 concentrations between low-income nonwhites and high-income whites (courtesy of PLOS One).

The authors note that these disparities, particularly the major gap along racial lines, likely leads to major public health impacts. They estimate that, if nonwhites had the same rate of NO2 exposure as whites, it would lead an annual decrease of roughly 7,000 ischemic heart disease deaths. To put that in perspective, 3.2 million adults would have to give up smoking to get this same outcome.

Air pollution and race in Northeast Ohio

As you might expect, there is a significant racial disparity in NO2 exposure within the Cleveland metro area. Based on the authors’ data, nonwhites in Cleveland are exposed to 2.3ppb more NO2 than whites on an annual basis. This constitutes the 17th largest gross disparity in the country. Much of the work on urban air pollution focuses on pollutants from stationary sources, particularly coal-fired power plants. But, if you actually break down the data in low-income, minority communities, pollution from transportation emerges as a major issue. In a 2009 report from the Pacific Institute (PDF), residents of Richmond, a low-income community in Northern California, identified freight transport as one of the leading environmental threats to their well-being.

Unlike other pollutants like CO2, SO2, or mercury, the EPA says that 57% of NO2 pollution derives from mobile sources (i.e. automobiles). That number is even higher for Ohio (65%) and Cuyahoga County (77%). NO2 has been linked to asthma, decreased lung function, low birth weight, and elevated risks of both cardiovascular and respiratory mortality.

Unfortunately, NO2 pollution represents a legacy of our country’s highly flawed history of transportation policy, which cut low-income and minority neighborhoods in half and facilitated White flight into the outlying suburbs. Due to such misguided investments, the CDC estimates that 11.3 million Americans live within 150 meters of a major freeway; 47% of these individuals are persons of color.

aerial photo of innerbelt bridge construction cleveland

Construction of the Innerbelt Bridge in Cleveland sliced right through existing residential neighborhoods, as shown in this picture from 1961 (courtesy of  the Cleveland State University archives).

How does the Opportunity Corridor fit into this?

It is in this toxic environment that ODOT and its allies are planning to drop the Opportunity Corridor, a 3-mile, $330 million highway in the middle of overwhelmingly low-income communities of color. I’ve already discussed some of the social and environmental challenges facing the neighborhoods in the path of the project. These neighborhoods have asthma rates nearly double the national average (PDF), and infant mortality rates have been as high as 69 deaths per 1,000 live births. That number is above the rates for Bangladesh, Burma, Haiti, Pakistan, and Rwanda. Many of these critical health issues are closely linked to transportation.

Air quality in Northeast Ohio

While air pollution data are not available below the county level, examining Cuyahoga County’s numbers paints a clear picture. Cuyahoga County ranks among the dirtiest 10% of counties in the entire country for cancer and non-cancer health risks stemming from hazardous air pollutants (HAPs). It also ranks in the worst 10% of all counties in Ohio, a state where people of color are 1.5 times more likely to contract cancer from HAPs and 3.3 times more likely to live near facilities that emit criteria air pollutants.

As the maps below demonstrate, the neighborhoods where the Opportunity Corridor would run bear an immense share of this burden. Children living in these areas have face dangerously high levels of blood lead contamination; this is a toxic legacy of decrepit housing, for sure, but also of a decades-long campaign to keep tetraethyllead in gasoline, despite ample evidence of its harm. (Neil deGrasse Tyson discussed this issue in great detail on Cosmos last week.) Lead is known to reduce cognitive function and cause behavioral issues in children, including aggression and hyperactivity.

 

cuyahoga county blood lead levels

Source: Northeast Ohio Sustainable Communities Consortium

Transportation also represents an important source of fine particulate matter, particularly from heavy trucks/freight, which rely on diesel fuel. While mobile sources only account for 5.2% of PM 2.5 nationally, that portion increases to 12.3% in Ohio and 27.5% in Cuyahoga County; one can only assume it is even higher than this total within these neighborhoods.

We know that PM 2.5 is a leading cause of respiratory and cardiovascular mortality; it is also a dangerous carcinogen. A 2012 study found that reducing levels of particulate pollution in the US by 1 µg/m3 would prevent 34,000 premature deaths annually. In Cuyahoga County, which saw 12,809 deaths from PM 2.5 in 2009, such reductions would prevent 91 premature deaths, more than anywhere else in the state.

pm 2.5 mortality improvements

Source: CDC Environmental Public Health Tracking

Lastly, we know that NO2 is essential for the development of ground level ozone, another dangerous urban air pollutant. Cuyahoga County has consistently remained in nonattainment of EPA ozone standards; from 2006-2008, the County averaged 0.081ppm of ozone, one of the highest marks in the country. The American Lung Association gives the county and the city of Cleveland a solid F for ozone pollution.

All told, the burden of disease in these areas is substantial. Some areas along the proposed highway lose more than 500 years of potential life per 1,000 residents, easily the highest toll in the region. Given the potential of the Opportunity Corridor to exacerbate air pollution in the area, it’s hard to see how the project could avoid being a serious environmental justice issue that calls for appropriate planning and mitigation. Surely, ODOT is on top of this issue?

years of potential life lost northeast ohio

Source: Northeast Ohio Sustainable Communities Consortium

Environmental justice in ODOT’s planning

Not quite. Inexplicably (though not really, when you think about it), ODOT’s draft environmental impact statement (DEIS) gave short shrift to air pollution (PDF). In the DEIS, ODOT states that the project “does not present concern for air quality,” as it is unlikely to significantly increase carbon monoxide or PM 2.5 emissions. The agency does note that mobile source air toxins (MSATs) will likely increase in certain parts of the project area, but it then dismisses this concern within the same breath. And ODOT completely punts on ozone, stating that the issue is NOACA’s responsibility.

The report’s environmental justice is similarly insufficient. While it does acknowledge that “the project was found to have a disproportionately high and adverse effect to low-income and minority populations,” it claims to address the issue by implementing a “voluntary residential relocation program” (read: forcibly relocating 74 families and 44 businesses for a pittance), throwing some money at a rec center, and building a few noise walls.

But again, in typical ODOT Orwellian fashion, it also states that the project will simultaneously benefit these low-income communities of color by, among other things, improving “access to the Interstate system” and increasing “pedestrian and bicycle access, connectivity and safety.” Apparently enhancing freeway access in an area where most households don’t own automobiles is essential for local non-drivers and great for pedestrians.

EPA criticisms of the Opportunity Corridor

The report includes little, if anything, in the way of plans to mitigate potential increases in air pollution due to additional vehicular traffic or to tackle the severe underlying health issues residents face. Unsurprisingly, EPA Region 5 has criticized the DEIS, saying it contains insufficient information on environmental concerns. The letter pointedly reminds ODOT that the Opportunity Corridor runs through areas that are in nonattainment for ozone and PM 2.5, barely meet four other air pollution standards, and have a series of major environmental justice issues. Simply mentioning these issues in passing so the department can check off another box isn’t going to fly with a project of this import.

I know I’ve said before that Northeast Ohio’s transportation policies are stuck in the 1960s. The Opportunity Corridor is an unfortunate reminder of this fact and of that terrible era of “urban renewal.” Residents of the so-called “Forgotten Triangle” – God I hate that moniker – have a fractious history with the state government, one that has, understandably, left them suspicious of ODOT’s motives.

Public meetings about the project have become contentious, and locals have raised a number of valid criticisms of the project. Yet, the wheel of “progress” inevitably rolls forward once again.

If ODOT ever hopes to garner public buy-in for the Opportunity Corridor, it needs to do more than meet the minimum possible standards. Failing to even mention criteria air pollutants like NO2 and SO2 and claiming that a massive highway project will enhance pedestrian safety isn’t good enough any more. The agency and the project’s supporters can and must do more than the bare minimum. Otherwise, the Opportunity Corridor risks becoming yet another one of Northeast Ohio’s environmental justice disasters.

 

Ohio lawmaker compares clean energy to the Bataan death march

Senator Bill Seitz
Senator Bill Seitz

Ohio State Senator Bill Seitz of Cincinnati (courtesy of The Columbus Dispatch)

When the Ohio GOP leadership introduced SB 310 last month, they intentionally tried to sideline Senator Bill Seitz (R-Cincinnati) from the process. We know that Sen. Seitz has a tendency to put his foot in his mouth. He has previously likened the clean energy standards to “Joseph Stalin’s five-year plan,” and he routinely labels his opponents as “enviro-socialist rent-seekers.” But this time he outdid even himself.

Last Wednesday, April 9, Sen. Seitz turned a Senate Public Utilities Committee hearing on SB 310 into a three-ring circus. First, during the middle of testimony from Aaron Jewell, a US Army veteran who fought in Iraq, Sen. Seitz reportedly got up, pulled out a pack of cigarettes, and walked out of the room to take a smoke break.

He came back into the session halfway through the testimony of Dan Sawmiller, a Senior Campaign Representative for the Ohio Beyond Coal Campaign with the Sierra Club. Mr. Sawmiller also served with the Ohio National Guard from 2000-2008, during which time he worked as a combat engineer in Iraq.

Mr. Sawmiller served with 485 other guardsmen and women to clear some of the most dangerous parts of Baghdad of improvised explosive devices, in order to make way for the movement of additional troops and supplies. At least one of his fellow servicemen did not make it home.

During his testimony, he detailed the work he did in Iraq. “I explained how my combat experiences drove my passion to work on energy efficiency and national security issues,” he said. “This drove me to work with the Sierra Club.”

But rather than showing respect and gratitude for his service and simply debating the facts of the clean energy law, Mr. Sawmiller explained that Sen. Seitz made outlandish comments that are offensive to those who have served in our military.

“The Senator referred to the current law as being on the Bataan death march for clean energy,'” he explained. “The more I think about what was said, the more offended I get as a combat veteran.”

Let that sink in for a minute. According to an elected representative of the people of Ohio, a policy that has lowered electricity bills, stimulated economic growth, reduced greenhouse gas emissions, and helped spark a clean energy sector that employs more than 25,000 people is on par with an internationally recognized war crime that killed 10,000 American and Filipino soldiers. Not only is such a statement utterly absurd, it insults the memory of the men who died (and those who survived) either on that march from Bataan or in the nightmarish prison camps that followed.

Did I mention that April 9 marked the 72nd anniversary of the surrender at the Bataan Peninsula and the first day of this horrific six-day march.

While Sen. Seitz may dismiss the connection, there is a reason why the United States military has invested hundreds of millions of dollars into renewable energy and energy efficiency – it saves money and, more importantly, lives.

Fossil fuel boosters love to claim that hydraulic fracturing will allow the US to drill its way to energy independence. But, as Brad Plumer explains,

Even if, one day, the United States produces enough oil to satisfy its own needs, it still won’t be entirely “independent” from the rest of the world. That is, the US economy will still be vulnerable to supply shortages or turmoil in the Middle East (for instance). There’s a reason for that. Oil is relatively easy to trade on the global markets.

Because oil is fungible international commodity, the US military will continue to maintain a vital interest in it. In a 2010 article, Roger J. Stern estimated that the US spent at least $6.8 trillion to secure oil reserves from 1976-2007. He calculated that the military costs of securing oil supplies from the Persian Gulf “exceeds the value of Gulf petroleum exports in all years except 1990 and the value of US petroleum imports from the region by roughly an order of magnitude.”

In other words, the US government is spending substantially more money to secure Middle Eastern oil reserves than the oil itself is worth. Stern concluded that, rather than trying to increase the supply of oil, we should curb demand by investing in energy efficiency, as this strategy “would address the core problem.”

Our reliance on fossil fuels has a direct impact upon the performance and flexibility of the armed forces. At least 70% of all tonnage on the battlefield is fuel, leaving the military highly vulnerable to energy market volatility. According to the Department of Defense, the military spent $13.2 billion on fuel for its operations in 2010. Due to the difficulty of delivering fuel to forward operating bases, fuel costs can often exceed $400 per gallon.

This dependence on fossil fuels also creates operational challenges. Infantry soldiers in Afghanistan carry 26 pounds of batteries on missions to power their equipment. This weight hinders their mobility and increases the physical strain on their bodies. That’s why Tremont Electric, a Cleveland-based clean energy company, is working with military contractors to integrate their kinetic energy device, the nPower Peg, into body armor.

And just as Napoleon once said that an army marches on its stomach, today’s military runs on its fuel and water convoys. These convoys are highly vulnerable, however, and became a favorite target for militants in Afghanistan and Iraq. The DoD reports that at least 3,000 US soldiers and military contractors were wounded or killed in raids on such convoys from 2003-2007. This breaks down to roughly one casualty for every 24 convoy trips.

Veterans like Dan Sawmiller and Aaron Jewell are well aware of this intimate connection between energy security and national security, as they saw it every day on the streets of Baghdad. But Sen. Seitz has chosen to demean their service and ignore their voices, because he serves the interests of ALEC and its funders in the fossil fuel industry.

“Clean energy has proven to be a great deal for Ohio’s homeowners and businesses,” Mr. Sawmiller said. In a letter sent yesterday to Senate President Keith Faber (R-Celina), he called on the GOP leadership “to demand respect for the sacrifices that Ohio’s soldiers have made for generations” asking for a more dignified way to debate legislation.

If you are also tired of the Bill Seitz’s continued insults and bloviating, take a stand. Call Sen. Seitz’s office at (614) 466-8068 or send him an email demanding that he apologize to our veterans and stop his mindless attacks on Ohio’s clean energy standards.

GOP beware: Ohio overwhelmingly supports clean energy

ohio statehouse
ohio statehouse

The Ohio Statehouse (courtesy of Wikimedia Commons).

Well, the Ohio GOP is at it again. After Senator Bill Seitz (R-Cincinnati) failed to even get the support of his own caucus for SB 58, his bill to mangle Ohio’s renewable energy and energy efficiency standards, the GOP leadership has decided to pursue a new course – just letting FirstEnergy decide what to do.

On Friday, Senator Troy Balderson (R-Zainesville) introduced SB 310, a bill to immediately and indefinitely freeze the efficiency and renewables standards at 2014 levels, which would cap them at roughly one-tenth and one-fifth of the final numbers, respectively. The bill looks an awful lot like one that FirstEnergy tried to sneak through the lame-duck legislature under the cover of night in November 2012.

I won’t dive too deeply into the details of the bill or the parade of horribles it will unleash on Ohio, as it has been covered pretty effectively by other outlets; I want to focus on a different perspective, instead. Midwest Energy News has a thorough, useful primer, and the PD was actually ahead of the game by denouncing the bill as “misbegotten” and noting it would take Ohio backwards into the dark, coal-stained days of its past.

Plunderbund goes into great detail on the history and benefits of SB 221, the bill that established the state’s energy standards in 2008, and the likely consequences of SB 310 – higher energy bills, billions in lost economic activity, thousands of jobs foregone, air and water pollution, etc. As the post rightly notes,

Senator Faber made it clear that he hopes to rush this bill through the legislature and have it on the Governor’s desk before the May recess. The GOP is counting on the idea that you aren’t paying attention to this issue or that you will buy into the misinformation they are spreading. The opponents of SB 221 are not looking out for the interests of Ohioans. They are simply defending the economic interests of the fossil fuel industry and electric utilities…

The Ohio GOP is not targeting SB 221 because it has failed to work; they’re targeting it precisely because it has worked so well. In order to defend the well-being of economy, environment, and the people of our state, Ohioans need to protect SB 221.

As the French say, précisément.

But as I said, I wanted to focus on a different angle to this story. Proponents of SB 221, including Senators Seitz and Faber, continue to claim that they are standing up for the interests of ordinary Ohioans, not just their utility company benefactors. Sen. Faber claimed this bill is “based on evidence and science,” while Sen. Seitz, who loves to call his opponents “enviro-socialist rent-seekers,” repeatedly argues that the existing standards “constitute a hidden electricity tax on consumers.”

One would assume that if the standards were truly nothing more than a hidden green tax to benefit a bunch of socialist treehuggers, ordinary Ohioans would be universally opposed to it and happy to call for its appeal. Not quite.

In a poll conducted during February 2013, Ohioans demonstrated their support for the state’s energy mandates. Almost 80% of respondents expressed support for existing policies to require that at least a portion of electricity be generated from clean energy sources, while 65% indicated that they specifically support increasing renewable energy generation as a replacement for coal and natural gas.

Last November, Small Business Majority surveyed Ohio’s small businesses to get their views on the subject. They found that 53% of the state’s small businesses support SB 221 in its current form, while just 43% stood opposed. Moreover, 65% of those surveyed said that renewable energy “can have economic benefits for small business owners, such as lowering utility bills and providing new business opportunities for entrepreneurs.” Ohio’s small businesses know that the mandates have helped drive the development of a vibrant clean energy sector in the state, which already employs more than 25,000 people.

But even more surprising were the results of a survey last July from the Yale Project on Climate Communications. While the main headlines included the fact that 70% of Ohioans believe climate change and occurring, and 49% believe it is manmade, there was some information buried in the report that is germane to this debate. According to the study,

A majority (59%) supports requiring electric utilities to produce at least 20% of their electricity from wind, solar, or other renewable energy sources—even if it costs the average household an extra $100 a year. Comparatively few (35%) would oppose this policy.

Rather than fearing the potential economic impacts of SB 221, Ohioans have embraced them with open arms. That’s because they know that the benefits of the state’s energy mandates far exceed any potential costs. In the same survey, 43% of respondents felt that switching from fossil fuels to clean energy would increase employment and economic growth. And Ohioans want their leaders to act now. Majorities – 54% and 56%, respectively – want Governor Kasich and the state legislature to do more to address climate change, including ramp up clean energy generation.

So the Ohio GOP and their friends at the big utility companies can continue to delude themselves that writing love letters to coal-fired power plants is a winning campaign strategy. But if they sow these seeds of discontent this spring, they’re going to have to reap them in November.

Major questions remain over ‘FrackGate’ scandal after Kasich’s reversal

john kasich

This piece was written by Brian Kunkemoeller of the Sierra Club Ohio Chapter and cross-posted from Ecowatch

john kasich

Governor Kasich may have come out against fracking in Ohio’s state parks, but his actions have done little to qualm concerns about the state of environmental oversight in the state (courtesy of The Toledo Blade).

Ohio’s Gov. John Kasich reversed his position on fracking public lands in response to public outcry about the events surrounding recently released information about the state’s collusion with the oil and gas industry to conduct a shady pro-fracking PR campaign. Last week, Gov. Kasich announced that he is opposed to drilling in state parks, but the biggest concerns are still unanswered as a cloud of controversy still lingers.

“FrackGate”

In 2011, we watched as a state legislature seemingly smitten by the industry passed legislation opening public lands to fracking with handshakes and applause, despite polls showing that 70 percent of Ohioans were opposed. Ohio Sierra Club members and others had risen to the occasion by writing letters and giving testimony, but the Governor signed the bill into law, which at that time seemed to seal the fate for Ohio’s public lands.

In 2012, the Ohio Sierra Club filed the first of many open records requests to the Ohio Department of Natural Resources (ODNR) looking for e-mails between the agency and the industry and how the language of the public lands fracking bill was written. The agency didn’t respond, forcing our first lawsuit (and not our last) simply to obtain public records from the ODNR. One of the things we discovered in those e-mails was that the Ohio Oil and Gas Association had been one of a select few invited to make edits to the legislation as the bill was making its way into state law.

Late last year, amid silence from the administration on the status of opening public lands to horizontal fracking, Ohio Sierra Club filed another public request under Ohio records law. It was this request that yielded the now-famous collusion document as well as the e-mail invite from the Governor’s office that named several targets, including Robert F. Hagan (D-Youngstown), in what the state representative has since coined “frackgate.”

Stories about this will be written and re-written, as the depth of this story is only beginning to be seen. How far down the rabbit-hole the state administration has gone will always be a topic of speculation. Unless, of course, there is an investigation.

Ohio’s PR agenda

There is no question that ODNR is actively silencing and opposing Ohioans concerned about fracking. This is the same agency who recently ignored repeated requests by the citizens of Athens and county commissioners alike who were simply asking for a public hearing about proposed fracking waste disposal wells. The ODNR met citizens in Portage County with armed guards and dogs, giving a brief lecture about the history of oil and gas in Ohio and refusing to answer questions about the wells in question.

Most disturbing, citizens in Darke County (hometown of Director James Zehringer) held expert panel events about fracking, only to have handouts made by ODNR staff discrediting their information delivered to and distributed by the County Commissioners office. Ohio Rep. Jim Buchy (R-Greenville) even made a website that features videos of the ODNR staff discrediting the citizens’ concerns alongside Energy In Depth—the industry’s new pet PR firm.

How are public funds being used for these purposes? How much state officials’ staff time is being used to do PR, and by whom? What is the agency’s relationship with Halliburton, America’s Natural Gas Association and JobsOhio? When did the ODNR start working with Energy In Depth and what is their relationship?

Where does our state regulatory agency end, and the fracking industry they regulate begin?

State Reps. Hagan and Nickie J. Antonio (D-Lakewood) submitted a letter to Ohio House Speaker William Batchelder requesting legislative hearings and an investigation in to the ODNR’s agenda. If House Speaker Batchelder denies these requests, Ohioans will be forced to draw their own conclusions about whether or not the oil and gas industry has infiltrated the public process.

In fact, if there is no investigation, the public has every right to draw some very serious conclusions.

Kasich’s conundrum

The governor made stunning comments when he announced his reversal. First, that he didn’t believe that the “regulatory framework was mature enough” for fracking in parks. Second, this is why he never appointed the five-member Oil and Gas Leasing Commission before the deadline to approve public lands leases. (About that public lands leasing commission—the nominations were made by the Ohio Oil and Gas Association themselves during an e-mail exchange with the ODNR)

These are two very interesting statements.

One: if the regulatory framework is in fact not mature enough, then he apparently perceives that fracking isn’t safe enough for our public lands. The obvious question is: if it’s not safe enough for our public lands, is it safe enough for our communities? Does the governor agree that the ODNR seems incapable of regulating fracking and knows all too well about their sweetheart relationship with industry? Here’s the take from Sierra Club President David Scott:

“It seems Governor Kasich is coming to his senses after being caught up in the ongoing ‘FrackGate’ scandal. The governor now admits that the ‘regulatory structure’ is not ‘mature’ enough to allow fracking in Ohio’s parks. We agree. But the Sierra Club and our 2.4 million members and supporters understand that what is too dangerous for our parks is too dangerous for other public lands or our backyards. And everyone will agree that public officials shouldn’t be colluding with the oil and gas industry to force fracking down our throats.”

Two: is this actually about the severance tax? A Columbus Dispatch article earlier this week quotes Tom Stewart vice president of the Ohio Oil and Gas Association, “We would never compromise our position on the severance tax to get concessions on state land.” So, what Stewart is saying is that he’s not going to sue the governor for not making the appointments he wanted for the Ohio Oil and Gas leasing commission because he would rather pass a tax bill that the Ohio Oil and Gas Association admittedly wrote.

This is the real crux of the governor’s position. It explains why he’s holding off on making appointments to the leasing commission. It also explains why he left himself an out when he said he “holds the right to revisit” his opposition to fracking public lands. He’s using Ohio’s public lands as a bargaining chip.

Yes, it’s indeed a dubious business to dance with the fracking industry. Disclaimer: severance taxes on extractive industries aren’t necessarily a good thing.

So, what’s all of this severance tax business about anyway? Well, it’s actually really important and it’s become a very serious problem for the governor, though no one seems to be talking about how FrackGate and the severance tax are very much connected (except for Tim Kovach).

While already fighting an uphill battle to show job growth from fracking is anywhere near par with projections—Kasich is being outright stifled in his efforts to draw even a modest tax on the industry and follow through on his promises for Ohioans to actually benefit from fracking. Disaster struck for Kasich when Speaker of the House William Batchelder soundly defeated the Governor’s severance tax proposal that would have lowered income taxes for Ohioans and at least partially resolved significant questions about Ohio’s budget. All of that despite the fact that the Governor’s bill would have kept Ohio’s fracking tax among the lowest in the nation.

Batchelder immediately came back with Ohio Oil and Gas Association’s own Trojan horse severance tax, that marginally increased the tax from 2 percent to 2.25 percent, but grants other tax subsidies which the Ohio Legislative Service Commission shows would amount to an $8.5 million dollar loss for the General Revenue Fund [annually], including a $1.1 million dollar loss to the School District Property Tax Replacement Fund. If passed, Ohioans would lose out on any actual benefit from fracking, period. Kasich is being just plain out-dueled by his radical counterparts in the statehouse and their friends at the Ohio Oil and Gas Association.

Oddly, the governor might be in a ripe position to fight back. A moratorium on drilling and a full investigation of ODNR’s relationship with industry would certainly get their attention.

One thing is for certain—FrackGate has Ohio on notice, and the people are watching.

6 takeaways from the ODNR fracking memo scandal

fracking well
fracking well

A fracking well looms large above eastern Ohio’s rolling hills (courtesy of Inhabitat).

The Ohio Department of Natural Resources (ODNR) has found itself in hot water after the Ohio Sierra Club obtained a document that showed the agency planned to actively promote oil and gas drilling in Ohio’s state parks. The memo details ODNR’s plans to actively counter opposition from environmental groups, which it labels as “eco-left pressure groups” and “skilled propagandists,” by collaborating with industry allies and like-minded third parties, including the Ohio Oil and Gas Alliance, Halliburton, and the US Chamber of Congress.

I don’t feel like spending an entire post responding to the document; there are plenty of stories about it already. Plunderbund has an excellent piece on the scandal, which is well worth reading in full:

While the document displays a startling collusion between the fossil fuel industry and the agency that’s supposed to regulate it, one should expect little more from the Kasich administration and its allies in the Statehouse. The Ohio GOP has devolved into little more than a mouthpiece for the industry at this point.

Just last month, Tony Stewart, the president of the Ohio Oil & Gas Association, told the Dispatch that it “came up with the methodology” behind HB 375, the GOP bill to rewrite Ohio’s tax laws for the industry. The bill, which makes Gov. Kasich’s original proposal look downright progressive, guarantees that Ohio would continue to give away its natural resources for pennies on the dollar.

Despite the inherent risks associated with fracking, the Ohio GOP seems far more interested in colluding with the industry that protecting the health and well-being of its constituents and the environment of our state. The state has bent over backwards to import fracking wastewater from Pennsylvania – trucking in more than 100 million gallons in 2011 alone – despite the fact that injection wells have caused more than 100 earthquakes near Youngstown. ODNR also allows fracking companies to dispose their waste, which can contain the radioactive element radium, in municipal dumps; the Ohio Environmental Council has labeled this practice “dump and glow.”

I just have a few additional thoughts to share on this story:

  1. This story does not reflect well on John Kasich, who has consistently tried to position himself as a “compassionate conservative” and seems to fancy himself a Republican leader in the model of Ronald Reagan. Having your administration actually develop a list that demonizes environmental groups and Democratic State Senators as “adversaries” who are attempting to “create public panic” and must be taken down comes off as a hell of a lot more Nixonian than Reaganesque.
  2. Memo to Kasich spokesman Rob Nichols, part 1: If you are trying to distance yourself from a politically damaging story by claiming that the Governor’s office was unaware of what ODNR was up to, maybe it’s a bad idea to call the environmentalists who raised this issue “extremist groups.” It’s tough to distance yourself from a document by parroting its language and implicitly endorsing it.
  3. Memo to Rob Nichols, part 2: Oh, and you’re probably going to need to do a better job explaining why 8 members of the administration were invited to a meeting to discuss the strategy that exact same day that the document was drafted. I’m sure there’s a logical explanation.
  4. If the Ohio GOP honestly believes that moderate environmental groups like the Ohio Environmental Council and NRDC are “extremists” and “propagandists,” they really need to get their heads checked. I guess when you’re that far to the right, all center-left environmentalists look like “enviro-socialist rent seekers,” to quote Senator Bill Seitz.
  5. I have my doubts that administration is only pushing drilling in state parks “to ensure a balance between wise use and protection of our natural resources for the benefit of all,” as the memo claims. It’s hard to believe that the same elected officials who are going out of their way to keep Ohio’s oil and gas severance taxes substantially lower than any other drilling state – willingly forgoing at least $800 million in tax revenues – are pushing fracking because “it will provide millions of dollars to restore deteriorating park and forest infrastructure.” It’s all about better bathrooms, folks.
  6. Lastly, it’s laughable that ODNR lists friends of parks/forests groups and communities who live near state parks/forests as “allied audiences” who would share the same goals as the administration. As I’ve noted in the past, the people who bear the greatest burden from natural resource extraction are those communities sitting on the front lines. Yet, despite the fact that fracking has damaged at least 360,000 acres of land nationally since 2005 (including more than 1,600 in Ohio), neither Governor Kasich’s bill nor HB 375 specifically sets aside a single dollar from severance taxes on the industry for affected communities. I’m just a tad bit skeptical that a group of lawmakers who ignore perhaps the single most important tenet of good natural resource governance is going to oversee fracking in a way that will cause no “disturbance” to our common, public heritage as Ohioans.

Ohio’s oil & gas industry literally wrote HB 375

state rep. matt huffman

State Representative Matt Huffman (R-Lima) is the main sponsor of HB 375 (courtesy of Ohio House GOP).

As a follow-up to my piece on the horrors of HB 375, Ohio Republicans’ plan to alter the state’s severance tax on the oil & gas industry, I came across an article from The Columbus Dispatch on the potential impact of the bill to tax revenues in the state:

The state tax commissioner says the impact on Ohio taxpayers of a tax plan for the state’s burgeoning oil and gas industry — sold as a way to reduce Ohioans’ taxes — cannot be predicted.

“The bill has some significant components that would have unpredictable impacts on state revenues,” Tax Commissioner Joe Testa told The Dispatch. “Specifically, the net-proceeds model it’s based on gives us no way of knowing what net figure these taxpayers will be declaring.”

Testa joins the nonpartisan budget analysis arm of the legislature in declaring the financial impact of the severance tax in House Bill 375 difficult to ascertain. Money would go for drilling oversight, capping of orphan wells and a minor annual income-tax cut.

“It allows for credits to be taken against other taxes for severance tax paid,” he said. “That approach is a lot like the old corporate franchise tax that Ohio wisely did away with because there were too many loopholes.”

Buried at the bottom of the article, however, is a single clause in the last sentence of the piece that, while not surprising in the least, is definitely illuminating. Tom Stewart, the president of the Ohio Oil and Gas Association noted that

oil and gas interests came up with the methodology used in the legislation.

In other words, the industry wrote the language on what may be the most important piece of legislation regulating their profits in Ohio over the last 40 years.

We already knew that HB 375 amounted to little more than a massive giveaway to Ohio’s oil & gas industry. Now we have proof, straight from the horse’s mouth.

Ohio can’t afford the GOP’s massive giveaway to the oil & gas industry

fracking well ohio
fracking well ohio

A hydraulic fracturing well looms large over the Ohio countryside (courtesy of Ideastream).

In March 2012, the Ohio House of Representatives introduced HB 487, a bill which included changes to the way that Ohio taxes oil and gas extraction in the state. Ohio’s current system of regulating oil and gas production was implemented in 1972. Almost everything about the energy sector in the United States has changed drastically in the last 40-plus years; I wish I could say these regulations were included.

Ohio’s existing severance tax

Ernst & Young analyzed Ohio’s existing severance tax and Governor Kasich’s proposed changes (PDF) in 2012. E&Y compared Ohio’s tax policy to that of seven other oil and gas producing states. Of the eight states, Ohio has by far the lowest effective tax rate (ETR). The state’s combined ETR of 1.8% is 80% lower than the average in the seven other states. Based on a 2011 analysis from Policy Matters Ohio, this tax rate has cost the state millions in foregone tax revenues. From 2001-2010, the  value of the oil and natural gas extracted within the state was $8.38 billion. But Ohio collected a mere $26,017,858 in taxes – equal to 0.31% of the market value. That’s not at typo. Using these numbers, Policy Matters projected the amount of severance taxes that Ohio would collect from shale gas production from 2012-2015, compared to five surrounding states. Of the $10.77 billion in estimated value, Ohio will capture just $39.8 million in taxes. Compare this number to West Virginia and Michigan, whose 5% tax would bring in $538.4 million.

The Kasich proposal

Clearly, Ohio’s current severance tax sucks. Governor Kasich’s plan was supposedly introduced to rectify this issue. The proposal would have doubled severance taxes on oil from conventional, vertical wells to $0.20 per barrel and altered the tax on natural gas from vertical wells to the lessor of 1% of the market value of the gas or $0.03 per thousand cubic feet (mcf). It would have also priced oil and gas from horizontal wells, which is produced using the controversial hydraulic fracturing method, separately. This oil would have been taxed at 1.5% of the market value for one year, then at 4% for the lifetime of the well. Natural gas from fracking wells would have been taxed at 1% across the board. E&Y’s analysis found that this proposal would have increased the effective severance tax rate from just 1.8% to 2.7% overall; however, Ohio would still have the lowest tax rate in the region. Under Kasich’s proposal, Ohio’s ETR for an average oil/gas well would be just 40% lower. What a relief.

Ohio Republicans strike back, introduce HB 375

And yet, Ohio Republicans balked at Kasich’s plan. During budget deliberations, the plan was completely stripped out of the bill. Recently, Ohio Republicans finally offered up their alternative to Kasich’s proposal. State Rep. Matt Hoffman (R-Lima) introduced HB 375 on December 5. Shockingly, the bill has overwhelming support from the oil & gas industry.

Thomas Stewart, head of the Ohio Oil & Gas Association, issued a statement saying the bill “includes a sensible modification of the severance tax based on actual well economics.”I’m not sure what energy economics textbook Mr. Stewart is reading from, but suffice it to say he’s just a tad off the mark. Headwaters Economics issued a report in 2012 that included a list of 12 recommendations for crafting fiscal policies for the oil and gas sector. HB 375 goes against every single recommendation. So let’s compare the bill to just three of these recommendations.

1. Maintain a high effective tax rate

Headwaters argues that it is essential for states to keep a high ETR on their mineral deposits, because it provides additional resources to mitigate the impacts of drilling and allows them to invest in long-term economic development.

kevin bacon dancing

Even 1980s Kevin Bacon knows that the oil & gas industry isn’t footloose (courtesy of People Magazine).

Contrary to fear-mongering from industry reps and the Ohio GOP, the oil & gas industry is not going to flee the state and give up concessions just because the state increases slightly its pathetically low severance tax. As Headwaters notes, Montana had an ETR of 4.6% for oil and gas in 2011. Neighboring North Dakota, in contrast, keeps its rate at 9.9%. Despite this, North Dakota has seen significantly more drilling activity, and Montana’s poorly-designed tax policy cost the state $60 million in foregone tax receipts in 2010 alone.

The minerals sector is not directly comparable to other economic activities, like the service sector. Oil and gas producers migrate to where the oil and gas deposits are, not where taxes are lowest. The industry is not, in economics parlance, particularly footloose. If it were, then Texas and Alaska, where tax rates are 8.2% and 25%, respectively, would not be leading producers. There is simply no valid evidence to suggest that slightly higher severance tax rates will keep companies from drilling here.

Yet, HB 375 institutes tax rates even lower than Kasich’s proposal. It would lower the tax on conventional gas from $0.025 per mcf to $0.015 per mcf. It also repeals the regulatory cost recovery assessment fee passed in 2010 to offset the costs of land reclamation. And, for horizontal wells, it introduces a severance tax of 1% of the value of net proceeds from oil/gas sales for 20 months; this tax then increases to 2%.

2.Remove “holiday” incentives

Several states have production tax “holidays” during the early days of oil and gas production. The logic behind these tax holidays is based on the fact that, for conventional wells, there is a lengthy gap between the drilling phase and the production phase (when the oil/gas is actually flowing). This gap can be upwards of two years for vertical wells.

But this model does not apply to horizontal wells. The drilling phase for a horizontal well is compressed, and the production phase typically jump starts thereafter. The majority of oil/gas from horizontal wells is extracted during the the first two years, after which production drops precipitously – by more than 60% in just one year in most cases.

shale gas production cycle

This image from the EIA charts the production cycles of shale wells across five different shale plays.

By providing a five-year tax holiday, HB 375 effectively ensures that Ohio will forfeit the overwhelming majority of tax revenues from its oil and gas deposits. By the time that the tax rate increased to 2% in year six, it’s entirely likely that drillers may have simply moved onto the next well.

3. Guarantee adequate local share in revenue collections

A central tenet of good oil/gas policy is to guarantee that the benefits of the fuels are adequately shared with communities on the front lines of extraction. As I’ve written before, the US isn’t somehow immune to the impacts of the natural resource curse. Far from it. One can find evidence of the resource curse from horrifically high mortality rates (PDF) in Appalachia to skyrocketing crime rates in North Dakota to groundwater pollution from fracking in multiple states to increased damage to infrastructure in Texas.

HB 375 does nothing to support front line communities. Ohio’s past two biennial budgets have taken a toll on local governments. Ohio Republicans balanced the state budget by holding onto tax revenues that should have been returned to local governments. The 2014-2015 budget reduces the amount of money local governments will receive by $1.4 billion. HB 375 simply exacerbates the issue further. Under the proposal, the funds raised would go to the Ohio Department of Natural Resources to cover the costs regulating the industry, remediating abandoned wells, and conducting geological surveys for the industry. Any additional funds would go to reduce personal income taxes. This policy would disproportionately benefit the wealthy and leave those directly affected by drilling on the outside looking in.

HB 375: Great for the industry, terrible for Ohio

All told, Policy Matters Ohio found that HB 375 would cost the state $620-800 million over the next decade, compared to the Kasich proposal (which is far from ideal policy). The bill amounts to little more than a giant handout to the oil & gas industry. Ohio’s current oil/gas severance tax is a 40-year old relic of terrible policymaking. It would be a challenge to make a policy that’s worse.

Somehow, Ohio Republicans have crafted a bill so terrible that it gives existing law a run for its money. If you were looking to develop a policy that took the full advantage of our natural resource endowment and benefited ordinary Ohioans, you could hardly do worse than HB 375. But, on the other hand, if your goal was to benefit the wealthy, well-connected, and your political benefactors, you would be pressed to outdo HB 375.

This bill is egregiously bad policy. Naturally, I expect it will be on Kasich’s desk by the spring.