Taxing Fracking: If Ohio Will Have a New Energy Boom, Shouldn’t It Have New Energy Taxes?

Wendy Patton – Senior Project Director for the State Fiscal Project, Policy Matters Ohio

Friday February 3, 2012
12:30-1:30 p.m.
Dampeer Room
Kelvin Smith Library
Case Western Reserve University

Dear Colleagues:

Sometimes very big public policies happen with very little public debate.

A few years ago the U.S. seemed to be running out of fossil fuels, and one reason to develop alternative energy sources was to end our dependence on foreign fuels. Now, suddenly, we are told the nation and particularly our region can enjoy a fossil fuel boom based on “fracking” – otherwise known as hydraulic fracturing, a process in which “a specially blended liquid is pumped down a well and into a formation under pressure high enough to cause the formation to crack open, forming passages through which oil can flow into the wellbore.”

The public policy concerns raised by this new development appear to be huge in both number and significance. We could probably spend a whole semester of Public Affairs discussions on them. The environmental uncertainties are particularly scary and complicated. But for this week’s discussion we will focus on a different dimension: the distribution of economic costs and benefits.

There are sure to be massive externalities (costs not captured by the market) and private benefits. In theory, the proper approach in such situations is correct the market failure (the people who benefit not being responsible for the costs) through taxes. This may seem especially appropriate in a state like Ohio in which promoters of fracking claim it will provide economic development, but the state government acts as if it cannot afford to address any of the social costs (if the state government even acknowledges those costs in the first place).

Recently, therefore, Policy Matters Ohio issued a report about the case for taxing fracking. Wendy Patton will join us to talk about that report and set off what I hope will be the first of a series of discussions (though not a whole semester) on this extremely important issue.

Very best regards,
Joe White
Luxenberg Family Professor of Public Policy and Director, Center for Policy Studies

*New Information: How to Park and Avoid Winter Weather. See Parking section below.

About Our Guest…

Wendy Patton is the senior project director for the State Fiscal Project for Policy Matters Ohio. She has a B.A. from Kent State University and a master’s degree from the University of California at Berkeley, where she studied regional economics. Wendy has worked for AFSCME International, the Ohio Department of Development, the Columbus Urban Growth Corporation and the Ohio Employee Ownership Center. At Policy Matters, Wendy works on budget and tax issues as part of the State Fiscal Analysis Initiative.

Where We Meet

The Friday Public Affairs Lunch convene each Friday when classes are in session in the Dampeer Room of Kelvin Smith Library from 12:30 pm to 1:30 pm. The Dampeer Room is on the second floor of the library. If you get off the elevators, turn right, pass the first bank of tables, and turn right again. Occasionally we need to use a different room; that will always be announced in the weekly e-mails.

Parking Possibilities

The most convenient parking is the lot underneath Severance Hall. We regret that it is not free. From that lot there is an elevator up to street level (labeled as for the Thwing Center); it is less than 50 yards from that exit to the library entrance. You can get from the Severance garage to the library without going outside. Near the entry gates – just to the right if you were driving out – there is a door into a corridor. Walk down the corridor and there will be another door. Beyond that door you’ll find the entrance to an elevator which goes up to an entrance right inside the doors to Kelvin Smith Library.

Friday Lunch Upcoming Topics and Speakers:

February 10: Can We Legislate Ourselves Thinner? Jessica Berg, Professor of Law and Biomedical Ethics

February 17: Is Childhood Obesity a New Form of Child Abuse? David Crampton, Associate Professor, Mandel School of Applied Social Science

February 24: Telling the Players Without a Scorecard: China’s Leadership Transition. Paul Schroeder, Visiting Assistant Professor of Political Science

March 2: Does the Fire Department Have a Hose? The IMF and World Bank in the Financial Crisis. Kathryn C. Lavelle, Ellen and Dixon Long Associate Professor of Political Science

March 9: Germany and the European Union. Ken Ledford, Associate Professor of History

March 16: Spring Break – No Discussion

March 23: TBA

March 30: Just Do It or Just Say No? The Politics of Sex Education. Mark Carl Rom, Associate Professor of Government and Public Policy, Georgetown University

April 6: TBA

April 13: Russia’s Presidential Election. Andrew Barnes, Associate Professor of Political Science, Kent State University

April 20: TBA

April 27: What Happens When a President Thinks Like a Community Organizer. Justin Vaughn, Assistant Professor of Political Science at Cleveland State University