States deciding what to do with their pieces of the energy pie

posted at 7:01 pm on November 20, 2012 by Erika Johnsen

Gigantic, top-down national bureaucracy continuously trying to do more things for more people, basically monopolizing government functions and hindering efficiency and innovation while accumulating monstrous amounts of debt? Bad idea.

Individual states controlling more of their own respective destinies and competing for residents, thereby driving efficiency and innovation in policy decisions and management? Smart idea.

It’s a shame (to say the least) that so much of what could get done via federalism in the United States has instead been overtaken by the clutches of the federal government — an alternative that will appear especially poignant as we decide what to do with the abundant energy reserves recently made available through new technologies. Case in point, via USA Today:

What should be done with the nation’s new oil and gas riches?

One answer rapidly gaining popularity: Set some aside for future generations.

North Dakota voters created a Legacy Fund in 2010 and the state expects to have $1.3 billion tucked away by June 30. Utah voters approved a constitutional amendment Nov. 6 to require up to half of new energy revenue be set aside in the future. West Virginia legislators are considering a Future Fund to divert energy revenue into a trust fund. And the idea has been raised in Kentucky, Ohio, Pennsylvania and South Dakota. …

The Alaska Permanent Fund, which pays cash dividends to residents every year, is the most famous example of a giant savings account built from energy taxes and royalties. Created in 1975, it now has $42 billion. Other energy states — Montana, New Mexico, Texas and and Wyoming — have big trust funds, too. Alabama created one in 1985 after natural gas was found offshore. …

The Legacy Fund is exceeding all projections. It brought in $580 million in the first 12 months from 30% of the state’s oil and gas revenue. …

The oil industry in new energy states has been skeptical of permanent funds, fearing higher taxes. Ohio Gov. John Kasich, a Republican, wants higher oil and gas taxes to fund an income tax cut rather than a permanent fund.

America is sittin’ pretty on top of enough energy reserves to self-sufficiently supply our own fuel needs for decades to come — and in places where state governments are allowing companies to tap into those reserves beneath the land under state control, we’re already watching the regional economies go bananas, with job creation and economic growth galore. Whether states decide to allow more energy development, and however they choose to regulate it, and whatever they decide to do with the extra revenue — they can pick a path for themselves on a smaller scale than the federal government dictating a single top-down solution, meaning that we can contrast examples of success and failure in real time. The Obama administration has made it clear that they intend to keep a solid chunk of America’s energy potential on permitting lockdown while continuing to pour taxpayer dollars into the politically-profitable green-energy “investments” of their choice, but individual states’ choices and management of their resources is going to offer a highly visible and stark contrast to what the federal government is imposing on everyone. Just something to consider as the energy boom (or self-imposed bust, as the case may be) unfolds.


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Can’t let some of those states get too rich. We must buy votes, I mean we must redistribute, to less fortunate states like Kalifornia and Illinois.

VorDaj on November 20, 2012 at 7:06 PM

Obooba will do everything he can to squelch this, because he is an anti-American toad.

Akzed on November 20, 2012 at 7:07 PM

I’ve been preaching the gospel of federalism for a long time and you can read my series of articles on how we conservatives can use it to defeat the Left and restore our liberties by clicking my name.

Charlemagne on November 20, 2012 at 7:08 PM

Gov. Jerry Moonbeam warns humans to new planet!: Global warming must be stopped or future generations will be living ‘indoors … or we’ll be living on some other planet’

Akzed on November 20, 2012 at 7:10 PM

Akzed on November 20, 2012 at 7:10 PM

The Left’s ideal society is modeled on the one in Logan’s Run where we’re all living in giant habitrails cordoned off from the outside world to protect nature from Mankind.

Charlemagne on November 20, 2012 at 7:17 PM

What’s the point of a permanent fund for the future when people are paying taxes now? Sounds like a cash stash for politicians.

PattyJ on November 20, 2012 at 7:32 PM

Can’t let some of those states get too rich. We must buy votes, I mean we must redistribute, to less fortunate states like Kalifornia and Illinois.

VorDaj on November 20, 2012 at 7:06 PM

Les fortunate? They are net contributors according to the Tax Foundation. Rural states tend to be the biggest recipients of federal redistribution.

lexhamfox on November 20, 2012 at 7:39 PM

Les fortunate? They are net contributors according to the Tax Foundation. Rural states tend to be the biggest recipients of federal redistribution.

lexhamfox on November 20, 2012 at 7:39 PM

Well why don’t you push for states like Kalifornia and Illinois to secede then?

VorDaj on November 20, 2012 at 7:42 PM

Les fortunate? They are net contributors according to the Tax Foundation. Rural states tend to be the biggest recipients of federal redistribution.

lexhamfox on November 20, 2012 at 7:39 PM

Well why don’t you push for states like Kalifornia and Illinois to s–ecede (what silliness that we must do this dash stuff) then?

VorDaj on November 20, 2012 at 7:43 PM

Les fortunate? They are net contributors according to the Tax Foundation. Rural states tend to be the biggest recipients of federal redistribution.

lexhamfox on November 20, 2012 at 7:39 PM

Mostly because so-called “contributor states” have money-pump industries like banking or Big Pharma. Both coasts can sink tomorrow and the flyover America won’t notice it for a week; saw off rural states, and how long can you supply the remainder with food and electricity?

Archivarix on November 20, 2012 at 7:52 PM

VorDaj on November 20, 2012 at 7:43 PM

Because I like the United States and I think they all of its parts offer something valuable to the rest of the country above and beyond dollar contributions.

lexhamfox on November 20, 2012 at 7:53 PM

Because I like the United States and I think they all of its parts offer something valuable to the rest of the country above and beyond dollar contributions.

lexhamfox on November 20, 2012 at 7:53 PM

Oh sure. That’s why you dissed the “non-contributor” states – a real sign of affection. You are a very poor liar.

VorDaj on November 20, 2012 at 7:56 PM

Build a refinery in the Dakotas, long pipelines not needed. Refined product shipped out on rail and river.

mixplix on November 20, 2012 at 7:57 PM

Oh sure. That’s why you dissed the “non-contributor” states – a real sign of affection. You are a very poor liar.

VorDaj on November 20, 2012 at 7:56 PM

I don’t ‘diss’ those states but I get tired of the HotAir people pissing on CA acting like it is a drag on the national economy. It isn’t.

Archivarix on November 20, 2012 at 7:52 PM

CA is easily has the largest agro industry in the US. CA does import electricity.

lexhamfox on November 20, 2012 at 8:12 PM

lexhamfox on November 20, 2012 at 8:12 PM

CA has 1/3 of all welfare recipients. Does CA foot the bill for all those people?

Charlemagne on November 20, 2012 at 8:19 PM

CA is easily has the largest agro industry in the US. CA does import electricity.

lexhamfox on November 20, 2012 at 8:12 PM

They used to be the largest just because of their immense population. Thanks to delta smelt, their agriculture is a pale shadow of itself now.

Archivarix on November 20, 2012 at 8:21 PM

Archivarix on November 20, 2012 at 8:21 PM

CA production is actually going up and that is despite land loss. Most land loss is due to urbanization rather than water distribution. Silicon Valley used to be orchards and fruit farms.

lexhamfox on November 20, 2012 at 8:30 PM

CA has 1/3 of all welfare recipients. Does CA foot the bill for all those people?

Charlemagne on November 20, 2012 at 8:19 PM

Yep CA has loads of poor people. Especially where I am where there are beggars and homeless people on every corner. We also have loads of entrepreneurs and extreme wealth.

lexhamfox on November 20, 2012 at 8:43 PM

Well why don’t you push for states like Kalifornia and Illinois to secede then?

VorDaj on November 20, 2012 at 7:42 PM

That’s the rub. The states that advocate the most for centralized government are the ones who are being ripped off the most. The residents of states like New York and California should be begging for a smaller federal government. Think of the socialist utopia they could create by keeping all of their federal tax money in state? /sarc

HarryBackside on November 20, 2012 at 8:48 PM

fruit farms.

lexhamfox on November 20, 2012 at 8:30 PM

…California is #1… in fruit farms! (:->)

KOOLAID2 on November 20, 2012 at 8:51 PM

KOOLAID2 on November 20, 2012 at 8:51 PM

CA is indeed the land of fruits …and nuts!

lexhamfox on November 20, 2012 at 8:55 PM

CA is indeed the land of fruits …and nuts!

lexhamfox on November 20, 2012 at 8:55 PM

LOL. Good one!

ReaganWasRight on November 20, 2012 at 9:13 PM

Mighty good economic argument for the energy states to assert their sovereignty, drill the wells – and invite the Feds to pound sand.

Demonized on November 20, 2012 at 11:55 PM

CA is easily has the largest agro industry in the US. CA does import electricity.

lexhamfox on November 20, 2012 at 8:12 PM

I live in California. It is trying with all it’s might to shut down the agro industry. Ever hear of the snail darter?

California is what the US will be if the plan for Obama’s Amerika is allowed to continue apace. The state is a mess. It used to be the biggest agro producer in the free world. Now they’re shutting down the Central Valley agricultural goldmine using the snail darter as an excuse.

Give them the chance and the Feds and their state cronies will do for the remaining states what they have done for my state. California is lost, barring a holy miracle. Don’t let them do to yours what they have done to California.

hachiban on November 21, 2012 at 12:36 AM

hachiban on November 21, 2012 at 12:36 AM

Yeah well it’s a goldmine because they have had loads cheap water for ages from another part of the state. Now it will be more expensive. They are working on two tunnels so water can be safely exported to the Central Valley but guess what.. it affects Delta farmers. It is a mess because everyone expects to have clean cheap water to use and then we had a dry spell and boom everyone wasting water for decades has led to a crisis.

Better for everyone to feel some pain so we can have a sustainable fishing industry, hydro-electricity, Delta farming, municipal water for LA, the Bay Area (and everything in between) , and water for the Central Valley’s farms. It’s going to take investment and innovation and everyone is going to have to be more efficient with water which will be more expensive. If you have a better idea that doesn’t poison drinking water, destroy the fishing industry, or destroy farming in a section of the state by all means write a letter or join one of the many pressure groups who think they deserve cheap water more than someone else.

lexhamfox on November 21, 2012 at 1:49 AM

What’s the point of a permanent fund for the future when people are paying taxes now? Sounds like a cash stash for politicians.

PattyJ on November 20, 2012 at 7:32 PM

I wouldn’t be surprised if some of this stimulus money ended up in Swiss bank accounts.

JellyToast on November 21, 2012 at 8:12 AM

EPA will regulate fracking out of existence in 5… 4… 3…

States need to fight it tooth and nail.

petefrt on November 21, 2012 at 8:50 AM

May I suggest to the States that they pull Eminent Domain against any federal lands that happen to be sitting on easy to get at natural resources? You can do it on a lot by lot basis, of course, since that is how you granted the federal government use of such land….

You DID grant the federal government use of such land, right?

Right?

If you didn’t then the federal government is a squatter and needs to be ejected from any land holdings the federal government is on that your legislature didn’t agree to. Because that is unconstitutional, pure and simple.

ajacksonian on November 21, 2012 at 8:51 AM

What’s the point of a permanent fund for the future when people are paying taxes now? Sounds like a cash stash for politicians.

PattyJ on November 20, 2012 at 7:32 PM

Yes. I agree.

cptacek on November 21, 2012 at 5:02 PM