Monday, June 25, 2012

Energy - #4002 - States Lacking Shale Can't Pour Gasoline On the Fire With Tax Hikes - Forbes (2) Obama's War on Domestic Energy Production - Heritage Foundation

The next great American energy race is on between our states, and its name is Marcellus. The Marcellus Shale natural gas formation is being tapped across Appalachia, and its promise offers many impoverished areas a new lease on life.For high tax states like Pennsylvania, West Virginia, and Ohio, over the long term, such severance revenues and new job bases could help lift a state economy in ways that state government never would otherwise. That is why it comes as no surprise that the State of Pennsylvania is trying to bet the farm, the mine, and every tax credit it can imagine to keep Shell’s ethane cracker within the Keystone State. The last time that energy potential was tapped like this might have been either in Texas or Alaska. The Lone Star State, which never taxed personal income, was able to contribute some oil royalties to its state general revenue. Up north, so much petroleum revenue was generated that Alaska eliminated its personal income tax altogether. For counties squatting on this tremendous potential for America, this could also mean new royalty inflows, even for states like Alabama, Arkansas, or Kentucky. Recently, the State of Kansas made sure that such revenues would become an immediate part of its budget by amending its tax laws.  Read more.......  Article contributed by Steve Peters.

Last Wednesday,  the Senate voted on the fate of one of the most expensive regulations of all time–a regulation that threatens to create an America with no new coal-fired power plants, where existing energy producers might have to close their doors, snuffing out jobs and making electricity dramatically more expensive. Citing mercury pollution and air pollution, the Environmental Protection Agency (EPA) ordered businesses to install the “Maximum Achievable Control Technology” (MACT) to control emissions from their plants. Known as Utility MACT, this is no ordinary regulation. So stringent are the standards that potentially dozens of coal-fired power plants will close rather than incur the unsustainable costs of compliance. The EPA estimates the rule will cost $9.6 billion annually, to be paid by utilities and customers alike for new equipment, monitoring and reporting, loss of generating capacity, and higher electricity rates. Industry insiders consider the agency figures to be a lowball estimate. Heritage’s David Kreutzer has called Utility MACT “a costly fraud” because it raises the scary specter of mercury but really targets carbon dioxide. He explains: The proponents of the proposed rule tell stories of mercury poisoning and point to benefit estimates as though they reflect a reduced incidence of mercury poisoning. However, even the EPA’s own cost-benefit calculations reveal that this is not a mercury rule in any meaningful sense–less than one-tenth of one percent of the estimated benefits come from mercury abatement.  Read more........

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