Kasich’s plan for tax hike, cut gets mixed reaction

COLUMBUS: A plan by Gov. John Kasich to tie higher taxes on oil and gas drilling to an eventual reduction of the statewide income tax met with opposition on multiple fronts Wednesday.

The oil and gas industry said the tax increase would discourage investment coming as a result of a boom in Utica and Marcellus shale drilling in the state. Cleveland-based Policy Matters Ohio, a liberal think tank, said the tax hike on oil and natural gas liquids within the next two years should be even higher than Kasich’s proposed 4 percent.

Meanwhile, public safety groups and advocates for the poor argued that revenue from the increase shouldn’t be used for income-tax relief at all. They want to see money raised reinvested in government programs hit with recent cuts.

“They’ve cut local governments by 50 percent, and local governments are where the most essential services are provided: police, fire, emergency medical services,” said Ohio Fraternal Order of Police President Jay McDonald. “And those local governments are really struggling to provide those services because of the lack of funding, and the state is directly responsible for that lack of funding.”

Kasich, a Republican, proposed his one-two tax punch as part of an unusual “mid-biennium review,” which revisits the state’s $57 billion, two-year operating budget after just one year.

Kasich’s idea was inspired by Congress, which passes a budget annually. The former congressman called his concept historic, and the sweeping policy proposals touching energy, education, health care and taxes necessary.

“Frankly, almost every time I turn around, I find another piece of broken Ohio,” he said in unveiling details to reporters.

State budget director Tim Keen said that as U.S. House budget chairman in the 1990s, Kasich became accustomed to the cycle of annual budgets in Washington. Keen said the administration has spent the past six months coming up with its second set of big policy priorities in as many years. The current budget cycle began July 1.

The Ohio Oil and Gas Association noted in a statement that the tax structure for the industry was revamped just two years ago. The industry group, which says its members are poised to invest as much as $34 billion in the state over the next several years, called the current tax system “fair, competitive with neighboring states and attractive to investment.”

“Though we would generally support an income-tax decrease, we do not support asking one industry to disproportionately fund it,” the association said. “We also believe that Ohioans who have struggled during the economic downturn would prefer to have a good-paying job now, instead of a small tax break years down the road.”

Zach Schiller, research director for Policy Matters Ohio said, “We applaud

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Fracking debate gets federal attention in Erie

ERIE, Colo. — The controversial natural gas drilling practice of hydraulic fracturing in Colorado is getting some attention at the federal level.

Congressman Jared Polis visited with some Erie residents about their concerns over the safety of fracking.

Last week, Erie enacted an immediate six-month moratorium on new gas drill permits.

A National Oceanic and Atmospheric Administration study said the propane levels in the air in Erie are worse than in Los Angeles and Houston.

It’s the air and a host of other issues that brought out Congressman Jared Polis to talk to residents.

“This oil and gas has been under the ground for millions of years. They need to take a time out and show me scientific proof this is safe,” says Boulder County resident Rod Brueske.

He and his family moved to the country from Denver a year ago, for the fresh air, a slower pace and better quality of life for his kids.

It’s bad. You breathe like fumes and stuff,” says his 5-year-old son.

But Brueske fears fracking will ruin all of it.

Fracking pumps water and chemicals underground at high pressure to crack rock and release oil and natural gas.

“It’s a threat to my family’s dream. Ooh,” he says as he staves off tears. “It’s a threat to our health and safety. And you can’t put a price on somebody’s dream. You can’t put a price tag on health,” he says.

It’s those fracking fears bringing Polis to visit Brueske and others whose homes are about 100 feet from a completed mining site.

Thick, blackish smoke poured out of it last summer.

It’s clearer now. But some say it is still potentially dangerous.

“Those hydrocarbon vapors are poisonous fumes, that as you can tell, the wind is blowing toward us and blowing toward homes only 100 feet away,” says Shane Davis of the Rocky Mountain chapter of the Sierra Club.

Mothers are worried.

“So they breathe this here at home. Then they go to school. There’s no escape for these kids; there’s no escape,” says April Beach, a mother of three boys. She says one of them developed asthma after the well was finished.

Polis is sympathetic to families who say they didn’t move here for city-like problems.

“You shouldn’t have to have fracking in your backyard. Colorado is wide open. The country is wide open. There are huge tracks of land where it’s not 300 feet from a daycare center or backyard,” says Polis.

The Democratic Congressman from Boulder has introduced two fracking bills–both would require oil and gas companies to abide by the federal Clean Air and Safe Water Act.

And he’s still drafting another requiring fracking be a certain distance from daycares and schools.

The oil and gas industry insists fracking is safe. It claims it follows numerous state and federal regulations.

http://kdvr.com/2012/03/14/fracking-debate-gets-federal-attention-in-erie/

Tighter Fracking Regulations Favored by 65% of U.S. in Poll

The U.S. public favors greater regulation of hydraulic fracturing, a natural gas drilling technique that has reduced prices for consumers while raising environmental concerns.

More than three times as many Americans say there should be more regulation of fracturing, known as fracking, than less, according to a Bloomberg News National Poll conducted March 8-11. The findings coincide with recent surveys in Ohio and New York where people who believe fracking will cause environmental damage outnumber those who say the process is safe.

“That actually doesn’t surprise me,” Mark Boling, executive vice president for Houston-based Southwestern Energy Co. (SWN), said of the poll results in an interview. “We have been so focused as an industry on figuring out how to crack the code and get these huge volumes of gas trapped in shale formations. We haven’t focused on the things we have to do differently above ground.”

http://www.bloomberg.com/news/2012-03-15/tighter-fracking-regulations-favored-by-65-of-u-s-in-poll.html

Chesapeake Energy to Build Processing Facility in Ohio's Utica Shale Region

Chesapeake Energy Corp. continues to expand its presence in the Utica Shale region by partnering with two firms to build a complex that will process natural gas and natural gas liquids in eastern Ohio .

Chesapeake along with M3 Midstream and EV Energy Partners will invest approximately $900 million in the midstream services complex, Chesapeake said March 13.

The structure will include natural gas gathering and compression facilities constructed and operated by Chesapeake subsidiary Chesapeake Midstream Development as well as processing, natural gas liquids fractionation and loading and terminal facilities built and operated by Momentum.

The complex will be located in Columbiana County, a region where the company already has several drilling sites. 

Chesapeake announced earlier in the year its plan to shift more production to liquids-rich shale fields as prices for dry gas continue to drop. Chesapeake currently has eight rigs operating in the Utica Shale and plans to have 20 by the end of the year, says company spokesman Pete Kenworthy.

http://www.industryweek.com/articles/chesapeake_energy_to_build_processing_facility_in_ohios_utica_shale_region_26866.aspx?SectionID=5

Pittsburgh-Area Site Is Chosen for Major Refinery

Dan Carlson, Shell's General Manager of New Business Development, said Thursday that the company signed a land option agreement with Horsehead Corp. to evaluate a site near Monaca, about 35 miles northwest of Pittsburgh.

The so-called ethane cracking, or cracker, plant would convert ethane from bountiful Marcellus Shale natural gas liquids into more profitable chemicals such as ethylene, which are then used to produce everything from plastics to tires to antifreeze.

The plants are called crackers because they use heat and other processes to break the ethane molecules into smaller chemical components. A cracker plant looks very similar to a gasoline refinery, with miles of pipes and large storage tanks. The final complex could cover several hundred acres.

Ohio, West Virginia and Pennsylvania had all sought the plant and offered Shell major tax incentives. Monaca is about 15 miles from both the Ohio and West Virginia borders, so workers in all three states are likely to benefit.

http://abcnews.go.com/US/wireStory/apnewsbreak-pa-site-chosen-major-refinery-15927939#.T2JYFxE7WAg

Natural Gas Industry Gets Water Permits for Fracking While Science and Public Get Ignored

As the Susquehanna River Basin Commission (SRBC) conducts its quarterly business meeting today, a coalition of organizations strongly criticized the agency for prohibiting public comment at the event and continuing to issue water permits for the natural gas industry without taking measures to prevent negative impacts across the Basin.

In a March 9 letter to SRBC, the groups said that full public participation at all meetings is necessary for the Commission to receive valuable public and expert input, have current information to consider in its permit reviews, and, as a public agency, to maintain transparent decision-making. (The full text of the letter is available by clicking here.)

The Commissioners represent Maryland, New York and Pennsylvania, as well as the federal government through the U.S. Army Corps of Engineers. But at a recent hearing on 40 water withdrawal permits to support the natural gas industry, only the Commission chair (from Pennsylvania) was present and comment was taken by a hearing officer.

This highlighted growing concern that SRBC is violating its mandate to operate on the basis of equal, joint involvement by all member states. SRBC continues to approve permits and will soon put in place weak regulations to promote shale gas development in Pennsylvania—even though the other two members, Maryland and New York, haven’t decided whether to even allow it to occur. And by not conducting any studies to determine the effects of the industry across the Basin over time, SRBC is ignoring its legal requirement for long-term planning. (These points are detailed in a document available here.)

“As drilling explodes across the Basin, communities and the environment are being harmed. It’s no wonder that residents are speaking out, taking a closer look at the work of the SRBC, and turning out for meetings like never before,” says Nadia Steinzor, Marcellus regional organizer for Earthworks’ Oil and Gas Accountability Project. “SRBC should face this new reality and do what it takes to support productive public participation and protect the water resources with which they’re entrusted.”

“The Commissioners should take the time to consider and respond to citizen comments. The public has invested time and expense in coming before the Commission to speak and the public should be heard,” said Thomas Au, conservation chair of Pennsylvania Sierra Club.

“The SRBC needs to stop the premature authorization of growth-inducing actions like the shale gas-related water withdrawals on March 15th’s docket,” said Guy Alsentzer, staff attorney for Lower Susquehanna Riverkeeper. “The Commission must first take the initiative to study shale gas development’s impacts on water resources and water resources management on a Basin-wide scale and incorporate those findings into its decision-making. Only by doing so can it fulfill its Compact and regulatory duties to preserve water quantity and quality for present and future generations.”

“SRBC should stop rushing to judgment on these huge water withdrawal permit applications. These proposed withdrawals are not happening in isolation,” said Myron Arnowitt, Pennsylvania State director for Clean Water Action. “SRBC needs to stop approving individual permits and conduct a study on the cumulative impact of full scale gas extraction on the entire Susquehanna watershed. These decisions affect residents in three states and should not be made without conducting real, science-based study.”

“The routine approval of water withdrawals for drilling and fracking in the Susquehanna River Watershed by the SRBC is resulting in water and air pollution and community degradation, and yet the SRBC is not addressing the outcomes from their decisions. They cannot bury their heads in the sand while the air and water of the Basin are polluted and people are getting sick,” said Maya van Rossum, the Delaware Riverkeeper. “The SRBC should not approve the proposed water withdrawals and instead enact a moratorium while they address the damaging fallout from gas extraction and put in place a plan to protect and restore the Susquehanna River Watershed. The degradation from gas in the Susquehanna affects us all and it’s time to stop it.”

http://ecowatch.org/2012/natural-gas-industry-gets-water-permits-while-science-and-public-get-ignored/

Ohio couples say fracking has polluted their water

Two Medina County couples say Landmark 4 LLC's drilling operation contaminated their private water wells, their houses and land with hazardous gases, chemicals and industrial wastes. The couples want the federal court to require periodic testing for them.

 The Cleveland Plain Dealer reports:

The Mangans and Boggses said Landmark didn't have sufficient cement casing on its wells and was negligent in training staff. In separate lawsuits filed against the company this week, the couples said their homes have lost value, they "live in constant fear of future physical illness," and they pay for water samples and water from outside sources.

"These acts and omissions allowed Defendant (Landmark) to save millions of dollars in costs they should have expended to properly contain and control the substances emanating from their facility," the lawsuits said. Neither couple would comment for this story.

http://shale.sites.post-gazette.com/index.php/news/archives/24386-ohio-couples-say-fracking-has-polluted-their-water