The recently passed regulations on the oil and natural gas industry should be favorable for everybody, especially here in the Mahoning Valley, but the state should tread carefully before raising any taxes.
A recent Associated Press story found that opponents of hydraulic fracturing, or fracking, often circulate misleading and false information to push their effort to attack the industry. Some examples of false claims are that breast cancer rates rose in a region with heavy gas drilling; natural radioactivity in drilling waste could contaminate drinking water; and air pollution from the industry is harmful even though natural gas is a far cleaner-burning fuel than coal.
The oil and natural gas industry itself, like any big business enterprise, is often blamed for supplying false and misleading information. However, in a Tribune Chronicle e-poll this week, 25 percent of respondents said they trust the industry while 12 percent said they trust the opponents.
It's good to know that those attempting to stir unnecessary hysteria are not affecting many people in Trumbull and Mahoning counties. It would be a shame to allow radicals, such as the out-of-town protestors arrested in Vienna recently and in Youngstown early this year, to stand in the way of world-improving developments that could be centered right here in the Valley.
It also good to know that we will not simply roll over and let the industry have its way. To prevent that, Ohio recently became one of the strictest states when it comes to fracking.
Highlights of a new law include chemical disclosure requirements for drillers to supply to the Ohio Department of Natural Resources and doctors; testing and result disclosure for well water near fracking sites; and tracking and monitoring brine (the potentially harmful byproduct) and quarterly reports from injection well owners where brine is disposed. There are also stiff penalties, up to $20,000 per day, for violators.
Gov. John Kasich, meanwhile, remains poised to increase taxes on the oil and natural gas industry. In exchange for the higher severance tax, Kasich wants to give all Ohioans an income tax break of equal value.
On the surface this sounds like a good plan. If large sums of cash flow to oil and gas companies as well as landowners reaping royalties, we doubt that a modest tax increase will hurt. Tax breaks for all wage earners should also be the goal.
But the governor and state legislature should concern themselves with the potential for future leaders to keep collecting the severance tax while eliminating the income tax break. And they should be certain that the severance tax would not cause a chilling impact on exploration.