Sunday, November 23, 2014

11/21/2014 at 6:33am

Source: Mark Haggerty/Headwaters Economics The chart shows the loss in tax revenue over a five-year period for a typical new shale-oil well in North Dakota, based on a drop in the price from $98 to $78 a barrel of crude. Local governments's share (green bars) of a typical well would drop about $80,000 over the period. Losses to state revenue (yellow) and permanent investments (blue) for future development needs would be even greater.

Falling oil prices could mean millions of dollars less in tax revenue for local governments in oil-producing regions, even as counties and municipalities have to continue paying for the impact of oil boom.

To get a handle on the possible impact of falling oil prices on local government revenues, I looked at the difference in tax income that occurs when oil prices drop from $98 to $78 a barrel for in North Dakota’s Bakken shale oil fields. That’s comparable to the change we’ve seen in the recent decline of oil prices.

The change in price could result in about $200 million less for local governments over five years, and $350 million less for state government. Losses for that state’s permanent investment fund would be even higher.

Those figures include only an estimated 2,500 new wells and don’t include lost revenues on the state’s existing wells, which number in the tens of thousands.

States are already stingy with sharing revenues with local communities to fund infrastructure and services required during the oil boom. And local governments need oil revenue to pay for annual, recurring expenses even as some states have invested in permanent funds to meet long-term needs. High oil prices can mask these problems in fiscal policy, but today’s lower prices—if they persist and if drilling continues apace—may expose these weaknesses. Communities will have less money to deal with the same intensity of industrial and population-growth related impacts.

11/20/2014 at 6:22am

President Barack Obama, a former Chicago community organizer and perhaps our most urban president, just did something that could make a real difference for rural America. Last week he came to the defense of the principle of net neutrality, and he urged the Federal Communications Commission to reclassify broadband service under Title II of the Telecommunications Act.

This could be a big win for rural communities and small towns. Let me tell you how.

Net Neutrality
Net neutrality is the principle that all information is treated equally and that no website or streaming service can pay for a faster lane.

President Obama explained it: “We cannot allow Internet service providers to restrict the best access or to pick winners and losers in the online marketplace for services and ideas… I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act.”

The president’s calling for Title II reclassification is an unequivocal commitment to ensure that rural Americans don’t get stuck in the slow lane. Thank you, Mr. President.

The Internet helps rural communities revitalize our local economies, share our culture with global audiences and amplify our voices in debates that shape society.

For example, Becky McCray owns a liquor store and cattle ranching business in Hopeton, Oklahoma, a town of 30 people. She also writes about how to run a small business and connects with other rural business owners across the country via her blog, Small Biz Survival.

You can’t buy Becky’s products online, but she uses the Internet for every aspect of her businesses: to bid on merchandise, to run her iPad as a cash register, to market her products. The Internet allows her to compete with large liquor businesses in metropolitan areas and to stay in her rural community. Without network neutrality, Becky will be at a competitive disadvantage. She simply does not have the same capital that a big Internet-based company like BevMo! has to speed up their connection.

President Obama stood up for Becky and small, rural business owners like her.

11/19/2014 at 12:57pm

Photo by Gary Cameron/Reuters Anti-Keystone XL Pipeline activists demonstrate outside Louisiana Senator Mary Landrieu's house.

The Senate’s vote over the Keystone XL pipeline on Tuesday was mostly sound and fury. But it did signify something: Mary Landrieu’s hopes of winning her run-off election in Louisiana’s U.S. Senate race in early December.

Landrieu, the Louisiana Democrat, introduced the measure to approve the pipeline in the Senate. Observers say she hopes her very visible support for the pipeline will help her in her re-election bid against U.S. Representative Bill Cassidy, a Republican.

That the Senate approval of the pipeline fell just short of the magic number to move forward is a secondary concern, according to this theory. Because pipeline supporters will most likely have an easy time passing a similar measure in the Senate in January, when the new Congress is seated.

But January is too late to affect the December runoff race for Landrieu.

The controversial pipeline would carry tar-sands oil from Canada to points south, including Louisiana, where it could be refined, thus creating jobs for Louisianans.

National Geographic has a good “thumbsucker” on the Keystone XL issue, including how the pipeline has become snagged in foreign relations, climate-change negotiations and national and state politics. There’s even a little information on the critical role Nebraska landowners and advocates have played in this international issue.

Even if Congress voted for the Keystone proposal, which officially depends on a decision from President Obama because the line crosses the border with Canada, there’s still a long row to hoe – or trench to dig – before final approval.

The case is in the Nebraska Supreme Court because of how state government handled the routing process. President Obama could veto congressional approval, which would create a much higher bar for supporters to get over. The pipeline may need another round of approvals from South Dakota because it’s been delayed so long. And meanwhile, the drop in the price of oil changes the economics of the project.

11/19/2014 at 6:04am

Photo by Smoke rises from the Luke Fiddler (Coal Run) underground mine fire. A proposed pipeline that would
carry natural gas from the Marcellus shale region would go through the area, which is susceptible to combustion in old underground mines.  

When Pete Tipka first learned a company wanted to run a natural gas pipeline through his property in Bear Gap, Pennsylvania, he considered it.

 “When the pipeline letter came in the mail, I knew nothing about it. I thought— oh, I’ll make some money… Then I did some research.”

It wasn’t easy. He couldn’t get much out of the government.

“People were apprehensive about giving information,” Tipka said. “They clam up and don’t say nothing.”

The company sent a landman to negotiate with property owners, but, according to Tipka, “he was a typical land person. An employee of a huge corporation, there to make landowners happy,” not to provide unbiased information.

The “Atlantic Sunrise” pipeline would run through 10 Pennsylvania counties, connecting other pipelines and moving natural gas for export. It’s a proposal from Williams Partners, a Tulsa-based Fortune 200 company.

Photo courtesy of Nixnootz Pete Tipka points to the route the proposed pipeline would take through his land in Pennsylvania.As of November 2014, the pipeline is in a “public input” stage, before the federal government approves or denies the project. The project will also apply for eminent domain, which would give pipeline owners the power to take land if landowners won’t sell rights voluntarily.

Tipka started to worry about the proposed pipeline splitting his land in half – land that his family has owned for over 175 years. He went to public meetings held by the company, but company representatives quickly dismissed his concerns.

His bigger concern, though, lies in the mountain to the south of his land, where his great grandpappy milled timbers for the mines.

11/18/2014 at 7:35am

Via the U.S. Geological SurveyUse of the herbicide glyphosate, known by the brand name Roundup, has expanded since 1992, according to U.S. Geological Survey records. Genetically modified "Roundup Ready" soybeans, which allow farmers to kill weeds without killing the crop, became available in 1994.

When I was a kid, I worked next to my folks pulling weeds from around fences and buildings on the farmstead every Saturday afternoon. Those were the days.

Starting when it was first released in 1974, the herbicide Roundup became a great labor saver for us. Dad loved to spray it around the farm, killing all those weeds and grasses without ever once shaking out a root ball.

He thought Roundup was the best thing ever.

I also remember the time Dad sprayed too close to the corn east of the house on a windy day, killing off about half an acre. That's when he said if we could ever develop crops immune to Roundup, the farmer would have it made.

He died a year before Roundup Ready soybeans were released in 1994.

Dad always read the label, even if he didn't take it to heart. He used to say Roundup was so benign, you could eat it on your breakfast cereal. He also pointed out it made a great hand cleaner. That’s true, it did. Grease comes right off with Roundup. That may have been at least in part due to soapy chemicals that help the product coat plants evenly. But it’s also a characteristic of glyphosate, the active ingredient in Roundup.

Besides being a farmer, for awhile during the ’60s and ’70s Dad ran a farm-supply business that sold feed, fertilizer and farm chemicals of the day. An old farmer once told me he owed everything to my dad, who convinced him to apply another herbicide different from Roundup, atrazine, to his weedy corn crop.

We used that one on our farm too.

11/17/2014 at 2:33pm

Photo by Andrew Harrer/Bloomberg/Getty Don Blankenship, former head of Massey Energy, sits before a Senate Appropriations Committee hearing in 2010.

The hands-on management style of coal operator Don Blankenship will be part of the legal argument prosecutors use against the man who was head of Massey Energy during the Upper Big Branch mine explosion that killed 29 coal miners in West Virginia.

“The fact that Blankenship was such a micromanager in the running of his mines may turn out to be the knife in his back,” Tony Oppegard, a Kentucky lawyer and mine safety advocate, told Ken Ward Jr. at the West Virginia Gazette.

Blankenship heads to federal court Thursday in Beckley, West Virginia, to face charges related to the 2010 Upper Big Branch explosion. He was indicted last week in 43-page grand-jury document that charges him with conspiring to violate mine safety rules, interfering with the enforcement of federal safety rules and lying to investigators.

If convicted, Blankenship could face up to 31 years, NPR reports.

The Gazette’s Ward says federal prosecutors charged Blankenship under a section of mine-safety law that applies to mine operators, not corporate officers. That means they will have to show that Blankenship was actively involved in the mine’s management, not just an executive who let others call the shots in the mine.

Proving Blankenship’s hands-on management of the mine is critical to conviction, Ward reports, because the corporation can no longer be held criminally liable for the explosion. Massey Energy was purchased in 2011 by Alpha Natural Resources, which was relieved of any criminal liabilities as part of the purchase.

The indictment includes examples of Blankenship’s direct management of the mine, including half-hourly production reports and daily reports on safety violations and fines at individual mines, writes Ward.

Blankenship left Massey in December 2010, receiving a departure package estimated at $86 million.

West Virginia Senator Jay Rockefeller said in a statement that Blankenship’s indictment was “another step toward justice.”

But let me be clear: in my view, Don Blankenship, and the mines he once operated, treated miners and their safety with callousness and open disregard. As he goes to trial, he will be treated far fairer and with more dignity than he ever treated the miners he employed. And, frankly, it's more than he deserves.”

Blankenship’s attorney says he is innocent and is being prosecuted for his criticism of mine-safety regulators.

11/17/2014 at 4:05am

Rural areas aren't always pedestrian friendly. But communities can solve these problems creatively with "park-and-walk" lots, walking trails and using facilities like shopping centers. There's only one way to do it, and that's to do it.

With more open space and natural amenities, you might think rural people would walk more than folks who live in suburban or urban areas. But, in fact, the opposite is true. Rural people walk and bicycle, on average, less than their city counterparts.

That’s a shame, because nothing beats walking for curing what ails the health of many rural residents.

If walking were considered medicine, you can bet it would be the most popular product in the physician’s black bag. I’ll bet your doc can’t name a medicine – even two or three medicines taken together – that will do as much good for as many different ailments as walking several times a week. 

Walking and other exercise cut down on a person’s risk of heart attack, stroke, type 2 diabetes (the kind related to obesity), breast and colon cancer, depression, falls and weak bones.  It helps arthritic knees and lowers blood pressure.  It improves sleep, increases endurance and may even revitalize a person’s sex life, according to the Harvard Health Letter. 

But for all its benefits – including the fact that it’s free and requires no co-pay – walking can be much harder to promote than the latest new drug. “My patients don’t want me to help them stay healthy,” a doctor friend told me.  “They want me to give them a pill so they can do what they want and not die.”

Rural areas and small towns are more likely to lack the kinds of infrastructure that make walking safe and convenient. Distances between home and businesses are farther, and there are fewer sidewalks and crosswalks. Many country roads simply aren’t safe for walking.