By Mary McCleary
Introduction
Ohio has a rich energy history and stands at the crossroads of having a rich energy future – a future that is capable of driving an economic turn around for the state of Ohio. This future, however, is a choice. Ohio has plentiful natural resources in coal, oil, and natural gas that are waiting to be developed by energy companies, both small state-based businesses and world-renowned companies, but policymakers at both the federal and state levels have jeopardized Ohio’s energy future.
First, the Obama administration, through the Environmental Protection Agency, has declared a war on coal. In Ohio, this has meant the early retirement of coal-fired power plants and effectively a moratorium on the building of new coal-fired power plants due to regulatory requirements. Currently, over 80 percent of Ohio’s electricity is supplied by coal. The war on Ohio’s coal hurts business and families through fewer jobs and higher energy costs.
Second, the Kasich administration is seeking to raise taxes on energy companies by increasing the severance tax 16 times its current rate. Though the additional revenue collected from the tax hike is supposed to fund an income tax cut for all Ohioans, this tax cut will be miniscule and will arguably do more harm than good to Ohio’s economy. The tax hike will curtail profits of energy companies doing business in Ohio, so they will look to other states where they can get better returns on their investments. Reduced investment in Ohio translates into fewer royalties for landowners, fewer direct and supporting jobs created, higher energy costs, and possibly fewer tax dollars due to the decrease in economic activity.
In addition to the proposed severance tax hike, Ohio policymakers, in recent years, have a failed history of supporting traditional energy. In 2008, with almost unanimous support, the Ohio legislature passed renewable energy standards mandating that 25 percent of Ohio’s energy comes from renewable sources by 2025. Although the definition of renewable energy was recently expanded to include cogeneration technology, the standards are still harmful to Ohio coal, oil, and gas companies and will result in higher energy prices for consumers and fewer jobs.
Ohio’s potential economic boon from traditional energy could turn into a missed opportunity that once again leaves Ohio in the dust, trailing behind other states that are using their traditional energy resources to propel their economies forward and to create much-needed jobs. When Ohio policymakers stand behind traditional energy, Ohio wins.
Ohio’s Energy History: World Leader
Ohio led not only the United States, but the entire world in energy production in the late 1800s. With the discovery of oil in the Appalachian Mountains shortly before the Civil War, the region experienced an oil boom. Rigs and refineries popped up across the area, with Cleveland becoming a major refining center…
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