Notes on the state of things

Here’s an unflattering portrait of government red tape:

An industry analysis of government data shows that the Pennsylvania Department of Environmental Protection’s Pittsburgh regional office takes more than 200 days to process erosion control permits for shale gas drillers.

That happens to be up from the average of 139 days in 2015.

DEP blames staff turnover, staffing shortages and greater scrutiny of permit applications, reports The Associated Press.

No matter the rationale — real or an excuse — government should facilitate growth, not retard it.

The Trump administration’s executive order relaxing Obama administration regulations on coal-fired power plants is being billed in some quarters as the way to revive the region’s coal mining industry, if not the economy itself.

But while reversing any government regulation that seeks to command the economy in pursuit of social goals is laudable, the simple fact remains that market forces likely will preclude any rush to return to coal as the power-generating source of choice.

The bottom line is that natural gas-fired power plants are more economical, for operators and consumers. You can thank the nation’s shale gas fracking revolution for the shift and the glut of product, one that has become both a boon and a bane to the shale gas industry.

Some question whether it was the Obama administration’s quest to kill King Coal that set the stage for the rise of natural gas. Most assuredly, it played some role. Energy providers had to satisfy shareholders as government regulations changed the landscape.

But the simple fact of the matter is that the shale gas revolution would have precipitated marketplace changes anyway. And if the yoke of government can be loosened, that revolution has an ever better chance of continuing.

For, indeed, and as social commentator Herbert Spencer reminded in the 19th century:

“Liberty … is to be measured, not by the nature of the governmental machinery he lives under … but by the relative paucity of the restraints it imposes on him.”

PublicSource offers some interesting salary and employment statistics about Allegheny County, based on county statistics. To wit:

Total 2016 compensation to Allegheny County’s 6,928 government employees was $301.9 million.

That included $25.2 million in overtime, paced by employees of the county police and of the sheriff’s department.

It also included more than $697,000 in bonuses.

Factoring in overtime, 471 people were paid more money than county Chief Executive Rich Fitzgerald, who was paid $90,124 last year.

While Allegheny County’s median household income is just over $53,000, the median salary of all county workers (meaning half earn more and half earn less) was just over $42,000.

Fifty-one percent of county employees are women. Forty-nine percent are men.

Eighty percent are white. Twenty percent are minorities.

Finally, and considering Greater Pittsburgh’s population malaise, as reported by the U.S. Census Bureau, this most apropos quote from the Jane Jacobs classic “The Economy of Cities”:

“Artificial symptoms of prosperity, or a ‘good image’ do not revitalize a city, but only explicit economic growth processes for which there are no substitutes.”

Read that thrice. And recall it the next time, and the times after that, you are expected to believe otherwise.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org

Wolf’s mixed signals on shale gas

A strange dichotomy has emerged within the administration of Pennsylvania Gov. Tom Wolf regarding the shale gas industry. And it’s increasingly difficult for thinking people to bridge the practical and intellectual chasm.

Much attention is being given to a new study — by IHS Markit — that suggests Pennsylvania has enough raw feedstock in its Marcellus and Utica shale plays to support up to four additional ethane “cracker” plants in the commonwealth. That’s in addition to the one under construction in Beaver County’s Potter Township.

That’s pretty exciting news.

Details of the study were released on March 21 by the governor and his Team Pennsylvania Foundation. The study predicts there could be additional investment of between $2.7 billion and $3.7 billion in natural gas liquid assets in Penn’s Wood.

“Pennsylvania has a once-in-a-generation opportunity to develop and implement a strategy that will cultivate a manufacturing renaissance and transform our economy across the commonwealth,” said Wolf in a news release.

He says Shell’s cracker plant laid the foundation for “a diverse and robust petrochemical and plastics industry … and we must ensure that we make the most of this chance to create good-paying jobs for Pennsylvanians.”

OK, sounds promising, reasonable and as if the administration is on top of things. With a major caveat.

In the same news release, Dennis Davin, secretary of the state Department of Community and Economic Development (DCED), set up a long list of “key priorities” to capitalize on the burgeoning opportunities of shale gas.

Among them, “proactively engaging shareholders to bring the right decision-makers and resources to the table; attracting additional infrastructure investments in petrochemical and plastics manufacturers, as well as retaining and growing Pennsylvania’s existing industry; developing pad-ready sites throughout the state to encourage investment opportunities; streamlining the development timeline and addressing potential critical infrastructure bottlenecks; and training a workforce with the right skill sets to fill future jobs created by the industry.”

But as one of the wags with whom I regularly confer reminds:

“Policies are important if we want to get the economic equation right for Pennsylvania and create an environment to attract capital,” the wag said.

But, “While it is easy to tout natural gas development through reports such as this, let’s not forget the policies on the table obstructing our ability to achieve this ‘generational opportunity’ outlined in the report.”

Among those are the proposed severance tax and onerous and/or cumbersome regulations, including the time it takes to secure permits.

But another thought comes to mind as well:

Shell’s cracker plant is billed as something of a great pump primer — replete with heavy taxpayer incentives — that will, we are told, serve as a great catalyst for economic development, not only in the shale gas industry but for ancillary industries and, thus, the Keystone State’s economy at large.

Could be. Hope so; the early report card already shows that to be happening.

But how many additional public “incentives” will be “required” to capitalize on this “once-in-a-generation opportunity”? For how long will taxpayers be asked (forced, really) to “prime” this “pump”?

If the shale gas industry truly is the be-all and end-all to economic Nirvana — and make no mistake, its possibilities truly are exciting — why should taxpayers continue to be tapped for costs, capital or otherwise, that the industry alone should bear?

As but one example, is it really, as DCED’s Davin appears to suggest, a taxpayer function (other than, say, at existing brownfield sites) to develop “pad-ready sites throughout the state to encourage investment opportunities”?

It is not. That should be the exclusive purview of the shale gas industry and private property owners with whom respective companies negotiate land and royalty deals.

Government should be a facilitator, not a developer. And Pennsylvania’s history is replete with tales of well-meaning (one would assume) but misguided (one can confirm) government officials mistaking the latter for the former.

Indeed, Pennsylvania is at the epicenter of the shale gas revolution. Fortunes will be made. And, as is the case in a free market system, some fortunes will be lost; the marketplace will reward and it will punish. That’s the nature of our economic system. (And those who fail today are free to regroup and attempt to prosper another day.)

The shale gas industry — just as any industry — must stand on its own. But it can’t do that if government sends mixed signals — one day dismissing the import of the industry and regulating it to its knees, then, the next day talking of despoiling the public of its wealth to help the industry in the guise of “economic development.”

Government that governs least truly is the best government. “Beneficent” government that overplays its hand on either side of the equation will do neither the shale gas industry nor taxpayers any favors.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Intellectual malpractice writ large

Mt. Lebanon native and billionaire Mark Cuban says the Constitution of the United States should be amended to make “healthcare a right.”

Oh dear.

Said Cuban, the entrepreneur of some repute at a forum hosted by Axios, a new media company (as reported by PJMedia.com):

“I think healthcare should be a right. If there’s a legitimate way to modify the Constitution, I literally think there should be an amendment to the Constitution for health care for chronic illnesses and serious injury. We all play the genetic lottery.”

Cuban favors a single-payer system — government (i.e. taxpayers) pay — but “just for chronic illnesses and for life-threatening illnesses.”

As PJMedia.com tells it, “Cuban said the government-paid catastrophic coverage could lower health-care costs for insurance companies and help consumers.”

There’s a highly technical term for that assertion — “Daft.”

Cuban could see the same goal achieved — that is, coverage for catastrophic health events — by advocating for allowing health insurance to become insurance again. For insurance that pays for virtually everything is not insurance at all but a risk pool-destroying form of government welfare.

That said, real health insurance should cover only catastrophic events.

But, but, but, “How can patients ever dream of paying for their other health costs?,” critics ask.

Without insurance as “cover,” which has helped to fuel health-care inflation — think of what federal aid has done “for” higher education — competition would return to the medical marketplace and prices would drop, in many cases dramatically.

And with insurance premiums covering only those catastrophic events, premiums would drop as well. There would be no need for Cuban’s government–paid catastrophic coverage.

In seemingly the same breath, Cuban, a self-described libertarian, also says he would like to see the the size of government reduced — but use the savings to provide more government services to Americans.

Oh boy.

Here’s the full quote, in context:

“As a libertarian, I think we can reduce employment in government by at least a third, reduce the overhead and administration by that much or more so that we can offer more services for our citizens.”

So far, so good. But then Cuban said this:

“When it comes down to it, where I tend to disagree with everybody, and this is the libertarian in me, I’m happy to push down the size of government and make government more efficient because more money can pass through the government and help the people who need it.”

That’s hardly libertarianism (and it’s certainly not conservatism). Talk about intellectual malpractice writ large.

How about returning the money whence it came, Mr. Cuban, and allowing taxpayers to make their own decisions about how best to use their own money? Say perhaps for medical savings accounts?

As President Grover Cleveland once reminded, “The government is not an almoner of gifts among the people.”

Government, in all its forms, should promote and facilitate independence of the populace, not dependence.

If a government’s default position is to become the enterprise, so to speak, instead of facilitating private enterprise and personal industry by governing and regulating the least, we all are poorer.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org

Of pensions, taxation & Irish stew

Says Pennsylvania Auditor General Eugene DePasquale:

“Despite paying far more than is required, (Pittsburgh’s) pension levels fell further into distress” in 2015. “While some cities are struggling to make their minimum payments, Pittsburgh officials made extra payments, yet the city’s pension plans slid a little deeper toward distress.”

Again, we would remind.

The auditor general, in a report released March 15, said that while Pittsburgh’s pension assets grew from $675 million in 2013 to $688 million in 2015, liabilities rose to $1.2 billion. It’s a funding level of about 57 percent, which places the city’s pension plans in “moderate distress.”

DePasquale refers to Pittsburgh’s struggles as “treading water.” But that’s being kind, if not overly optimistic. Simply put, Pittsburgh’s pension plans are not sustainable.

For as the auditor general himself succinctly states: “Pension plans cannot sustain having far more people collecting benefits than contributing.”

Put another way, Ponzi schemes always implode.

For all those elected “leaders” who inexplicably believe that raising taxes have few if any consequences on business practices, this latest tale from Philadelphia, the City of Onerous Taxation:

Temple University will raise board rates nearly 5 percent for the 2017-18 academic year “solely because of the 1.5-cent-per-ounce sweetened beverage tax. That comes to about $400,000 per semester, reports The Philadelphia Inquirer.

The tax, in effect since January, already has led to layoffs at a major soft drink maker; retail outlets are feeling the same pressure to cut jobs because city consumers have sharply curtailed their in-city soda purchases.

Part of the tax receipts are earmarked for early childhood education. But one critic of the tax — Anthony Campisi, a spokesman for Ax the Philly Bev Tax Coalition — finds it “ironic that a tax the mayor sold on the basis of expanding educational access is now going to be making higher ed less affordable for students.”

A spokeswoman for Philadelphia Mayor Jim Kenney accuses Temple of using the soda tax as cover to raise boarding rates to take the heat off its regular tuition hikes.

Indeed, many institutions of higher learning long have had an unsavory habit of raising costs in excess of inflation (with government aid giving them cover to do so).

But the empirical evidence with the soda tax jibes with reality: It’s the consumer who pays more when government raises taxes on business.

And, finally, on this St. Patrick’s Eve, a tale of an Irish stew:

The cutting and chopping begin early today to fill two large pots atop the stove. In each will be layered large and thick slices of white onions and yellow potatoes. They’ll be followed by layers of cubed beef (too-greasy lamb is off the recipe). Then come the green onions, chopped celery, carrots and parsley.

The layers, each salted and peppered, are repeated until the pots are full; a quarter-pound of butter tops each. Then, poured into the pots, large bottles of red wine — the cheaper the better. It’s the only liquid used to produce what six or so hours later (and never stirred) will be this year’s St. Patrick’s stew.

The aroma of the sweet simmerings will mix with the sharper smells of a locust- and maple-filled fireplace, burning low and, just perhaps, mimicking the sod fire of my ancestors. Baking bread in the oven will be the final seduction.

Friends will arrive, uncorking their favorite wines and uncapping the not-too-cold Smithwick’s ale, fresh from Kilkenny. The good conversation and laughter will be every bit as warm as the stew, bread and fire.

About as much of the stew as the brew will remain as the night ends and the dogs curl by the fire, dreaming of the bowls they licked dry in the kitchen as the guests, their bellies and spirits filled, took their leave.

Happy St. Patrick’s Day everyone.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Here we go again

The commonwealth says it will seek to recover public subsidies from Aquion Energy Inc., the Bill Gates-backed Pittsburgh battery maker that has filed for Chapter 11 bankruptcy protection.

The company, which calls Pittsburgh home and has a manufacturing facility at the old — and cursed? — Sony complex in Westmoreland County, made saltwater-based batteries touted for their “sustainability” and safety.

But the company cited the “expensive” nature of its venture and its inability to raise the kind of private investment to sustain the operation, which began life at Carnegie Mellon University.

Ironically, the day before Aquion’s failure was announced, founder Jay Whitacre was named executive director of CMU’s Institute of Innovation.

Aquion received more than $13 million in public “incentives” to locate in East Huntingdon.

“What a joke,” notes Jake Haulk, president of the Allegheny Institute for Public Policy. “How much money the government wastes pandering to this stuff instead of allowing more tax deductions for research and development spending so private companies can spend their own money.

“Can you say tilting at windmills?,” added Haulk, a Ph.D. economist.

The Times of Beaver County reports that the Pennsylvania Turnpike Commission will adopt cashless tolling next month along parts of Interstate 376 in Beaver and Lawrence counties.

But it says no toll takers will lose their jobs; they’ll be “absorbed” elsewhere into the system, based on seniority.

An “efficiency” is not an “efficiency” if it goes out of its way to neutralize what should be a resulting efficiency.

Ergo, “government efficiency” remains an oxymoron.

Uh-oh. An Associated Press dispatch suggests that GOP lawmakers in Harrisburg have a newfound “willingness to increase taxes to deal with the state’s persistent post-recession deficit.”

That suggests that those legislating along the banks of the Susquehanna River are incredibly out of touch — with good fiscal stewardship, with fundamental economics and with the will of the electorate that increased Republican majorities in the state House and Senate in the last election.

Pennsylvania faces critical fiscal challenges. And it’s certainly not because state government taxes and spends too little. It’s because taxes are too high, government spends too much and over-regulates just about everything.

Indeed, there likely will be great ancillary effects from Shell’s forthcoming “cracker” plant in Beaver County’s Potter Township. It will use shale gas “feedstock” from the region to make one of the building blocks of plastics.

But if it is the be-all and end-all project it’s touted as being, why are any of the spin-off industries associated with the already heavily “incentivized” cracker facility (with taxpayer dollars) also being subsidized by the public purse?

To wit, Bidell Gas Compression, a subsidiary of Total Energy Services Inc. of Canada, says it will base its first U.S. manufacturing operation in nearby Weirton, W.Va.

According to AreaDevelopment.com, Biddell will “repurpose a 100,000 square-foot decommissioned machine shop to fabricate, sell, lease and service natural gas compression equipment to customers operating throughout North America and internationally.”

About 60 jobs will be created initially, with up to 130 jobs by 2019, said West Virginia Gov. Jim Justice.

But not only did “The State” help Bidell buy its physical plant, there’s state tax dollars to train workers for the facility. And Hancock County and the City of Weirton, among other entities, “also provided financial aid and technical support to secure Bidell in West Virginia’s Northern Panhandle,” the report notes.

Again, if Shell’s already heavily subsidized cracker plant is such a magnet for ancillary investment down the supply and support chain, “priming the pump” for other investment, why are taxpayers yet again being turned into venture capitalists?

Total Energy Services had consolidated revenue of $57.4 million in the fourth quarter of 2016, a 10 percent increase over 2015’s fourth quarter, Total Energy’s Yuliya Gorbach, the company’s vice president and chief financial officer, reported in a March 8 investor conference call.

Seventy-three percent of that revenue came from its compression and processing business.

Why should any public money be expended to underwrite this or any company’s capital expansion costs?

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

West Virginia’s CON con

A battle royal has erupted in neighboring West Virginia. It pits free marketeers against monopolists.

More precisely, it pits enlightened state lawmakers seeking to reduce barriers to better medical care against health care monopolists seeking to preserve market share at the expense of patients, particularly the poor.

At the crux of the growing debate is Senate Bill 395, sponsored by Majority Leader Ryan Ferns, an Ohio County Republican. His bill would strip the West Virginia Hospital Authority of its sole remaining duty — riding herd over the Mountain State’s “certificate of need” program.

If a hospital wants to open a new facility or even offer a new service, it must go through the authority and prove there is a need, thus, as the authority puts it, “discouraging duplication” in “an orderly, economical manner.”

But as the Charleston Gazette-Mail recently reported, a legislative audit concluded the certificate-of-need process is ineffective at controlling health care costs and poses an unnecessary regulatory barrier.

Hospital types, of course, vociferously disagree. To wit, Gregg Warren, a spokesman for Wheeling Hospital in the state’s Northern Panhandle, dusted off the tried, failed and intellectually vapid talking points in defending certificates of need to The Intelligencer of Wheeling.

“It will harm employment, it will harm patient services and harm financial stability,” he said. “If you let outsiders come in and open similar services, it decreases the number of patients that come to us, (there would be) layoffs and health care dollars end up going to other states” where those unwelcome “outsiders” are based, Warren said.

Talk about monopolistic demagoguery fueled by abject fear of competition. Ironically, that competition would lower costs and better serve patients.

That fear pretty much is confirmed by Angelo Georges, M.D., Wheeling Hospital’s chief medical officer. He told the newspaper that when there are too many hospitals in an area that offer the same specialized services, then there aren’t enough patients for each hospital to remain proficient at procedures such as surgery.

“UPMC, for example, could build a hospital, UPMC of West Virginia,” Georges said.

Again, the nub of the rub is exposed — a rabid fear of competition interfering with a state-sponsored monopoly that prevents competition.

Too much access makes patient costs rise, Georges claims, incredibly. But West Virginia has one of the highest growth rates for per-capita spending on health care, that legislative audit found.

Fundamental economics refute the contentions of Warren and Georges. So do the facts.

The Ferns bill, introduced Feb. 22, is based on the legislative audit, a report by the U.S. Department of Justice and, also, a study by the Mercatus Center at George Mason University in Fairfax, Va.

“The theory is that by restricting market entry and expansion, states will reduce overinvestment in facilities and equipment,” says the Mercatus study, published in June 2015.

“In addition, many states — including West Virginia — justify CON programs (as they are known) as a way to cross-subsidize health care for the poor. Under these ‘charity care’ requirements providers that receive a certificate of need are typically required to increase the amount of care they provide for the poor,” the think tank scholars note.

“These programs intend to create quid pro quo arrangements: state governments restrict competition, increasing the cost of health care for some and, in return, medical providers use these contrived profits to increase the care they provide to the poor.”

But that’s not what really happens, the center found.

“(T)here is no relationship between CON programs and increased access to health care for the poor,” Mercatus researchers discovered. There are, however, serious consequences.

Such as, in West Virginia, 2,424 fewer hospital beds, between four and seven fewer hospitals offering MRI services and between 13 and 16 fewer hospitals offering CT scans, the study said, to name only three.

“For those seeking quality healthcare throughout West Virginia, this means less competition and fewer choices, without increased access to care for the poor,” Mercatus concluded.

Worse, a decade ago the Justice Department found that certificates of need promoted unfair competition between two Mountain State hospitals and enabled collusion between two others.

The very process of seeking a CON — onerous and expensive — was enough to prevent one hospital from seeking permission to offer a competing open-heart surgery program, a Justice Department attorney recounted in 2007.

And in another case, two hospitals used the CON process to carve up the market for themselves, Justice said. Competition was thwarted to preserve respective monopolies.

The Justice Department’s bottom line on certificates of need:

They “create barriers to beneficial competition,” the “original cost-control reasons for CON laws no longer apply”; “protecting revenues of incumbents does not justify CON laws”; such laws “impose other costs and may facilitate anti-competitive behavior”; and “CON laws lead to less competition and higher prices.”

Justice Department litigator Mark J. Botti was succinct in testimony before a joint congressional committee in 2007:

“Let me close by encouraging you not to accept without careful scrutiny claims that elimination of CON laws will visit significant harm on your state. We are unaware of evidence that those states which have eliminated CON laws have suffered such harm.”

In fact, Botti said, citing a number of studies, that “elimination of CON laws leads to improved markets.”

Pennsylvania’s certificate of need program was ended in December 1996.

Back to Sen. Ferns.

“We’re talking about a state-run agency that is determining when and where hospitals can spend their money and investment,” he told The Intelligencer. “Having the government artificially decrease competition leads to poor outcomes. Increasing it leads to improved outcomes and access to health care.”

That the West Virginia Hospital Association and its member hospitals openly support those poor outcomes and less access is shameful. Some might even consider it to be a violation of the Hippocratic Oath.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org

Impact fees, corporate wealthfare & carrying concealed

The Herald-Standard of Uniontown reports that some local governments have been forced to tighten their belts because less shale gas drilling has resulted in lower “impact fee” receipts.

But wouldn’t less drilling also result in fewer “impacts” in need of amelioration?

What appears to be in play here, as the state Auditor General’s Office exposed last year, is that some local jurisdictions have been using impact fee dollars for things that have no relation to shale gas drilling.

Of the 10 counties audited, the AG found 29 percent of impact fee spending went for things that drilling had not impacted. Of the 20 municipalities audited, 4 percent of the spending was dubious.

Local jurisdictions have said the guidelines are vague. The AG says the guidelines should be tightened. It’s past time to eliminate the wiggle room that flouts the original intent of the law.

Gov. Tom Wolf has proposed strict new rules for Pennsylvania companies receiving taxpayer subsidies to make sure they keep their jobs in the Keystone State.

First, companies failing to create the jobs they promised in return for public money must fully reimburse the state.

Second, any public subsidy recipient that moves operations from Penn’s Wood must repay the money and a 10 percent premium.

Third, public subsidy recipients must commit to those jobs for at least five years. Operations must be kept in the commonwealth for at least eight years.

That’s all well and good, it can be supposed. But the better course of action would be to lower onerous taxes and odoriferous excessive regulation. That way, companies wouldn’t need public subsidies in their attempt to conduct business here.

That said, there would be no need for such a subsidy/performance regulation if state government abided by the Pennsylvania Constitution. From Article VIII, Section 8:

“The credit of the commonwealth shall not be pledged or loaned to any individual, company, corporation of association nor shall the commonwealth become a joint owner or stockholder in any company, corporation of association.”

That admonition should leave no wiggle room for the kinds of public subsidies doled out for decades, corporate wealthfare that has improperly turned taxpayers into venture capitalists .

That so many in state government — and of every political persuasion — consistently pooh-pooh the notion of this constitutional stricture is a civic tragedy, if not government nonfeasance.

Public policies often are confusing. They can become especially so when attempting to navigate the differing policies among the several states.

For years, that was especially true of concealed carry gun laws: what states honored another’s concealed carry gun permits and/or engaged in full reciprocity.

It’s critical to know such things, especially for travelers who carry guns across state lines. For the purpose of simplicity, below are the states that honor Pennsylvania concealed carry firearms licenses:

Alabama; Alaska; Arizona; Arkansas; Colorado; Florida; Georgia; Idaho; Indiana; Iowa; Kentucky; Louisiana; Michigan; Mississippi; Missouri; Montana; New Hampshire; North Carolina; North Dakota; Ohio; Oklahoma;
South Dakota; Tennessee; Texas; Utah; Vermont; Virginia; Wisconsin; Wyoming.

If you are traveling, into or through these states, it remains a good idea to check their respective carry laws to make certain you are not tripped up by some nuance not addressed herein. (More information can be found at usacarry.com.)

It was Aristotle who said that “Law is a pledge that the citizens of a state will do justice to one another.” But the law also should be a pledge that states will do justice to one another.

Honoring other states’ concealed carry permits, if not full reciprocity, is an important way to honor that precept and a good example of sound public policy.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Of Steelers, shale, soda & economic sobriety

The Pittsburgh Steelers are complaining, publicly, that they don’t have a very good working relationship with their Heinz Field landlord, the Pittsburgh-Allegheny County Sports & Exhibition Authority (SEA).

In fact, Steelers president Art Rooney II tells the Post-Gazette it is “not a functioning relationship.” It is a claim the SEA disputes. The authority’s solicitor insists the agency is simply doing its job.

Rooney says the supposedly poor relationship means the franchise will have a difficult time competing for such marquee events as the NFL’s Super Bowl, for which it soon is expected to formally bid, or the NHL’s Stadium Series, which featured a game last month at the North Shore stadium.

Indeed, the Steelers and the SEA have had a sometimes-rocky relationship. That’s because the SEA, which owns Heinz Field on behalf of taxpayers, oftentimes has refused to be a rubber stamp for the football franchise’s physical plant demands, to be covered by ticket surcharges.

Now, there’s a pretty simple solution to this:

The Steelers can put in a bid with the SEA to purchase Heinz Field and do what it wants with the complex. After all, it’s not as if the franchise doesn’t have the money.

Can you say “Antonio Brown,” class?

For all the talk of “rapid growth” and “efficacies” of renewable energy sources, here’s a stark fact:

“(T)he impact of new technologies in fossil fuels, specifically those developed to produce shale oil and shale gas, has been larger than that of the renewables.”

Those are the words of Carole Nakhle, director of Crystol Energy and noted foreign energy lecturer, writing for Geopolitical Intelligence Services.

“Shale technology has been by far the more powerful force, fundamentally altering the global energy markets and challenging the existing order, with serious spillover effects on the global economy and geopolitics.”

Keep that in mind as envirocrats continue to dis shale energy as unsustainable — as they continue to collect federal subsidies for “renewable” energy that, in too many cases, appears to be renewable only as long as taxpayers subsidize the unsustainable.

Actions have consequences, of course. And Philadelphia is getting an all too predictable dose of that lesson.

Pepsi says it will lay off up to 100 workers at three distribution plants that serve the City of Brotherly Love, reports The Philadelphia Inquirer. The beverage maker blames a new and onerous tax on sugary drinks, in effect since January, for cutting sales by 40 percent.

Just as predictably, Philadelphia “leaders” continue to blast those who have the audacity to adjust their workforce to best reflect government-perverted market conditions.

Pepsi it not alone in adjusting to Philadelphia’s deteriorating soda market. Canada Dry and and the ShopRite chain have said they will lay off 35 and up to 300 employees, respectively, because of business losses directly tied to the soda tax.

It’s shocking to think that so many of our “leaders” have virtually no understanding of basic economics. Such ignorance in public office is unacceptable.

Pennsylvania House Speaker Mike Turzai makes a most pertinent point — one that eludes far too many of our “leaders” — in a Philadelphia Inquirer commentary:

“For decades, Pennsylvanians have heard officials assure them that we’re only one more tax increase away from solving our budget problems. Every time the taxes are increased, the spending increases in commensurate amount and then some. We heard that when the personal income tax was first introduced. This system is not sustainable.”

That quote should be printed in large red letters, framed, and placed on the wall of every state legislator’s office — preferably right by the door so they see it every time they exit and won’t forget it.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Locks, carbon & guns

Studies are pending — and due this year — by the U.S. Army Corps of Engineers and the nonprofit American Rivers group on the feasibility of removing locks and dams on the upper Allegheny River.

As the Tribune-Review reports, it comes down to a matter of spending tens or hundreds of millions of dollars to repair these aging navigational facilities or a few million dollars to remove them.

Indeed, many of the facilities are long in the tooth and failing. And if they are not failing now, it’s only a matter of time. But, as the Trib notes, there are myriad things to consider in decommissioning this waterway infrastructure.

What will the resulting lower or higher river pool levels mean for communities along the river?

What about intake pipes for drinking water?

How might hydroelectric power facilities be affected?

How will recreational boating be affected?

And, as we would ask, what about any remaining or future river commerce? Might locks and dam removal cut off the proverbial nose to spite the face? True, “river commerce” in the upper Allegheny corridor borders on being an oxymoron. But what about that future?

We look forward to perusing these important studies when they are released, now set for this summer. Here’s to a thorough, frank and, above all, honest discussion.

Richard Reavey makes a curious comment to The New York Times in a story about how America’s coal industry supposedly is finding common cause with environmentalists to address “climate change.”

Says Reavey, vice president for government and public affairs at Cloud Peak Energy:

“We can’t turn back time. We have to accept that there are reasonable concerns about carbon dioxide and climate, and something has to be done about it. It’s a political reality, it’s a social reality, and it has to be dealt with,” he says.

But note what “reality” Reavey did not include in that quote — scientific reality.

The Times notes that America’s largest coal companies — Cloud Peak, Peabody and Arch — are embracing “carbon capture and sequestration.” It’s a process by which carbon is buried underground.

But it’s hardly cost-effective and it is hardly without its own perils, as a number of conservative economic and liberal environmental researchers have noted.

And it’s hardly the basis on which coal producers should be seeking more and more tax credits to appease envirocrats — envirocrats who, ironically, also question the efficacy of carbon capture and sequestration.

It behooves Pennsylvania gun owners to keep a close eye on a federal appeals court ruling that affirmed Maryland’s dubious Firearms Safety Act.

The crux of the ruling (in Kolbe v Maryland) — which has no direct effect on Pennsylvania but could have an ancillary effect since it is applicable, at least for now, in not only Maryland but West Virginia — decrees that the individual right to bear arms (as affirmed in the U.S. Supreme Court’s Heller decision) “does not extend to any firearm with military utility, which is arguably pretty much every gun ever made,” says Jonathan F. Keiler, writing in the American Thinker.

Keiler notes that the ruling, by the 4th U.S. Circuit Court of Appeals in Richmond, Va., also relies on the canard that semi-automatic weapons that look like automatic military weapons are “assault weapons” and de facto weapons of “military utility.”

The appellate court, which also ascribed nonsensical firing rates to semi-automatic weapons, also upheld Maryland’s ban on magazines holding more than 10 rounds.

“The 4th Circuit’s decision … was a direct, if often legally incomprehensible attempt to greatly limit the Supreme Court’s seminal decision in Heller and set the stage for a new national ban on semi-automatic rifles,” says Keiler.

Or as David French put it, writing in National Review:

“Here’s the bottom line, citizens of Maryland: A federal court has defied the Supreme Court and decided that the constitutional right to keep and bear arms is limited to those guns that have no modern military analog and have not (yet) been used to carry out a mass shooting.”

The 4th Circuit’s ruling most assuredly will end up before the Supreme Court. For rank ignorance and thumbing one’s nose at the Constitution is no basis for sound public policy.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

.

Welcome light on shale gas from Colorado

Intelligent discourse is a wonderful thing. Unfortunately, it’s a rare commodity in our cyber commentary age. Incendiary heat with little or no illuminating light is par for the course.

Thus, it is most encouraging when this institute receives educated and enlightening responses to its policy briefs and its commentaries based on those scholarly briefs.

A good example can be found at Townhall.com. That’s where a commentary on Gov. Tom Wolf’s latest proposal to impose a severance tax on Pennsylvania shale gas production (“Shale taxers disregard Bastiat’s lesson,” based on AI Policy Brief Vol. 17, No. 10, authored by Frank Gamrat and Jake Haulk), elicited the below response from Colorado. It is truncated at some points and/or otherwise edited for brevity and clarity:

“I was working in the Marcellus (shale play) until the bust hit me in 2015, so I just want to add a few points. I’ve worked in nearly 20 states — all the time zones in the lower 48 — so my experience with regulations and taxation is more diverse than many,” the writer noted.

“Pennsylvania had a fairly strict regulatory climate compared to many areas, but in light of the density of the population, the overly protective nature made sense. After Gov. Tom Wolf was elected, the regulatory climate grew hostile. I had an inspector threaten to shut down our drilling operation for, no exaggeration, a shovel full of drill cuttings (no hazardous chemicals, just dirt basically) on a wooden mat within thick environmental containment barriers. We prided our rig on the high level of environmental compliance we operated under.

“In spite of this hostility, on which Wolf ran for governor, the company I worked for was willing to bend even further backwards to please inspectors, no matter how unreasonable the demands.

Continued the commentator:

“Regarding the Marcellus (shale play), in 2014 it surpassed the Gulf of Mexico as the largest gas-producing region in the United States. The most productive and profitable areas of the Marcellus are under Pennsylvania, with other states on the outer fringes. Even with added costs, the region economically produces incredible volumes of gas in the middle of the most populous areas of the U.S.”

Further, proffered the enlightening writer:

“There are not enough pipelines to transport all of the gas the region produces, but that is improving every month. Because of the industrial capability of the region, one of the world’s largest ethane crackers is being built (in Beaver County) to provide the chemical feed stock that natural gas provides for manufacturing plastics, olefins (for clothing, etc.) and other industries. The investment in the area is massive.

“Unlike high-cost drilling natural gas in Western Colorado, which was killed by a hostile regulatory climate introduced by then-Gov.(Bill) Ritter, the power of the Marcellus will absorb the extra costs, and regional natural gas costs will be driven higher (exactly what you point out in your article as the subtle impact).”

Then, this most salient point:

“The natural gas company won’t be paying the (severance/extraction) taxes, but will act as a pass-through agent for the state, collecting those taxes from consumers and paying those taxes to the state. The optics make it appear that the “evil” gas companies are being punished when, in fact, everyone pays, and the economically challenged pay more for less.

“The Marcellus (shale play) is the No. 1 gas province in the U.S.; the Piceance in Western Colorado is the No. 2 province, in terms of reserves. The cost of regulations has brought the Piceance to a total of five working drill rigs from a high of 149 rigs before the regulations.”

“It is also probably worth noting that the state of Pennsylvania published several years ago that the economic impact of a working drill rig was over 250 direct (on the rig) and indirect (store clerks, hotels, teachers, etc.) jobs.”

Concluded the townhall.com correspondent:

“While I was traveling from Colorado to work, most of the people I worked with were from the region. If companies choose to drill at reduced rates because of the increased costs and hostile business climate, fewer jobs will be created and maintained. In the long run, production jobs that continue for decades after the brief drilling period will be fewer in number.

“Great article,” the writer closed. Great commentary, Mr. Writer.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).