On today’s Commentary page, Neal Peirce of the Washington Post Writers Group describes how Ohio has taken greater care than other states in drilling for oil and gas in shale formations. A key element is the accord between environmentalists and the industry to meet model standards in the use of hydraulic fracturing.
Now John Kasich has revamped a proposal that would add to the quality of the state effort. The governor wants something other states typically have applied, reflecting principles long held about sound stewardship of natural resources. He has asked his fellow Republicans in the legislature to think again about a modest severance tax on the extraction of oil and natural gas.
What is new in the proposal? The governor wants to route one-quarter of the estimated $375 million in revenue by 2018 to the affected Appalachian counties. That makes sense in dealing with the wear and tear of the development, not to mention keeping up with the expansion.
The move also carries an obvious, and potentially helpful, political component, supportive Appalachian officials enlisted to help make the case at the Statehouse. Will minds change? A severance tax landing in the final two-year state budget?
This editorial page disagrees with the governor’s plan for the rest of the revenue, the money making way for a personal income tax cut. Better to invest in education, health care and other priorities aimed at the foundation of the economy.
That said, the governor is right about applying a severance tax to ensure that the state as a whole benefits from the reaping of its resources. More, he correctly argues that the levy poses little risk to the development of oil and gas, the industry expecting as much. Yet, to be sure, the governor has played safe, the proposed tax at the low range compared to other states.
Here is another example of Ohio trying to get it right. Too bad the Republican legislative majorities have yet to see past the industry’s interests.