An article making the rounds on the “Seeking Alpha” website should be cause for alarm for free marketeers, not to mention those who hold their wallets dear. Author Zoltan Ban offers that “shale subsidies and other support for drillers may be on the way.”
As Ban sees it in last week’s posting, “conventional oil” has been on a production plateau for 15 years and “probably headed for a production decline.” Shortages supposedly could result.
Thus, “shale (oil) is the only hope of a major global production capacity boost.”
“The only way to make sure that shale will repeat its savior role as it did last decade would be to target funds to the industry, in other words, direct or indirect subsidies,” Ban argues.
Really? So much for markets. And so much for “sustainability.”
Ban offers a long and arid dissertation on why shale requires direct or indirect subsidies “in some form.”
Indeed, Ban says the “government could alternatively find ways to funnel money to the shale industry through the voluntary participation of the private sector.”
But then there’s this: “The government would of course offset the resulting losses to financial institutions through concessions on taxes, regulations, or other concessions.”
By any other interpretation in this case, “concessions on taxes” is a public subsidy that gives money-laundering a good name.
In addition to flat conventional oil production, Ban’s rationale for this kind of indirect public subsidy is that too many shale producers are not “credit-worthy.”
So, that’s the public’s responsibility to fix?
Ban’s bottom line:
“If such an intervention will not occur, the economics of shale drilling will not produce the relief from supply shortages that we may start to experience as soon as a year from now, if the global economy will experience a strong rebound. If this is the case, the global economic rebound will be very short-lived.”
Well, we might have been born at night but it wasn’t last night. Here’s our bottom line:
If the economics of shale drilling will not produce the relief from these presupposed supply shortages – if drillers can’t drill of their own wherewithal in anticipation of profits — taxpayers have no business making up the difference, never mind if it’s direct or indirect.
That is, if lenders won’t risk their money, why should taxpayers be forced to risk theirs?
Along those same lines, the weekly Farm and Dairy newspaper reports that a plan to revitalize the Ohio River Valley could bring nearly half a million jobs to Ohio and Pennsylvania over the next 10 years.
That’s according to a University of Massachusetts analysis of a plan by the group “ReImagine Appalachia.”
To its credit, Farm and Dairy asks in its front-page headline on the plan story “ … but at what cost?”
And with excellent reason. For “ReImagine Appalachia” appears to be the latest in a long line of shills for “green” energy, inefficient public transit and inflated union wages.
Think of, in general, “The Power of 32” group that bowed with such fanfare a number of years ago but hasn’t been heard from in a long, long time. Hey, maybe these central planners can even revive and expand the centralized government crock that was the “Regional Renaissance Partnership,” right?
While the “ReImagine Appalachia” plan claims 87,000 jobs would be created in agriculture and land restoration and 223,000 jobs would be created in “clean energy,” 28,000 “fossil-fuels-based” jobs would be lost.
And as the newspaper reports, the plan “would require billions of dollars in federal funds to make (the jobs gains) happen.”
As if that isn’t hinky enough, a public policy group that appears to support the plan admits that “these are short term infrastructure jobs” but will supposedly “lay the foundation for a more sustainable Appalachia going forward.”
Right. Let’s bring back the “War on Poverty” while we’re at it, yes?
And as if all that isn’t hinky enough, Farm and Dairy reports the “ReImagine Appalachia” plan also calls for “building a sustainable transportation system and creating ‘good union jobs.’”
Ah, you can see where this is going – a public transit boondoggle and public works projects inflated by cartel-demanded wages far in excess of real marketplace norms.
In fact, one of this plan’s supporting groups states it this way:
“We are calling for any federal investments to come with strings attached to make sure those jobs created are good union jobs with good union wages.”
OK, we’ve had enough. And so much for “sustainability,” eh?
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).