When Governor Kasich rolled out his energy plan in March, he portrayed himself as a maverick on fracking, standing up to Big Oil by requiring more chemical disclosure, higher tax rates and assistance to local governments.
Thanks in part to documents obtained exclusively by Plunderbund, we now know it was all posturing. Let’s review:
The chemical disclosure requirements he introduced were riddled with loopholes and allowed companies to hold information back if they deemed it a “trade secret.”
His severance tax increase was actually a tax cut on natural gas, the only material currently being extracted from Ohio’s shale in any significant quantity. Somewhere, Chesapeake Energy’s millionaire CEO, Aubrey McClendon, is smiling.
The last way in which Kasich portrayed himself as a moderate was a plan aimed at helping local governments cope with the impacts of fracking. Kasich’s plan would require oil and gas companies to pay a $25,000 impact fee for every well to the county to pay for roads and other costs. Drillers would then get their $25,000 back, over time, in the form of property tax discounts. The whole plan, Kasich promised, was “revenue neutral.” Grover Norquist even gave his blessing.
“Revenue neutral” if you don’t know the term, means no net change in revenue. In other words, drillers would pay the same net amount. Counties would collect the same net amount. In the end, plan was completely and totally unhelpful to counties coping with road damage and other community impacts of fracking. And ill-conceived because about 70% of property tax collections go to schools, causing them to actually lose money under the plan.
A cynical shell game that slaps local governments and schools in the face? That sure sounds like something Kasich would dream up.
But it wasn’t.
The idea was actually written by the Ohio Oil and Gas Association (OOGA). Plunderbund has learned—thanks to records we have obtained—representatives of the industry (including Christina Polesovsky of the Ohio Petroleum Council and wife of Governor’s office staffer, Jeff Polesovsky) met with Governor’s office staff twice during the week of February 19th, and followed up less than a week later via OOGA’s lobbyist, Fred Mills, with a copy of proposed language for inclusion in Kasich’s forthcoming fracking legislation.
House Bill 487, introduced by House Finance Chairman Ron Amstutz on Kasich’s behalf, included the impact fee idea almost exactly as conceived of by the industry. The only change we can identify is the fee was set at $25,000, not $20,000 as proposed by OOGA.
So Big Oil, whom Kasich portrayed himself as standing up to with his new regulatory scheme, was actually allowed by the Governor to write part of the bill to regulate themselves.
To bring us up to date, House Republicans, annoyed at Kasich having dropped the tax and impact fee plan in their laps without any advance briefings, removed the language the week it was introduced, promising to revisit it at a later date. As of yesterday, Speaker Batchelder indicated this could take place later in the summer. When it does, let’s be sure to ask the bill’s sponsor where the idea of the impact fee came from and why we are letting the Oil and Gas industry write the very laws that govern them.