Marcellus Shale – monoblogue

The folly of pursuing ‘equity’

This is another of those posts that began as an odd or end, but thanks to subsequent events was promoted to become a full post.

A few weeks back I received my annual pitch from the American Institute of Architects to rejoin their august body. Bear in mind I was an AIA member for about a decade beginning when I received my architecture license in the mid-1990s until about a year or so after I moved down here. Unfortunately, the usefulness of the AIA Chesapeake Bay chapter was much less than that of AIA Toledo, so I allowed my membership to lapse.

Moreover, as the needs of the architecture business have remained relatively steady over the 35 years (!) since I embarked on my life’s journey in the profession, the AIA has departed significantly from those needs into the weeds of political correctness. One line in their pitch multifold postcard, under the heading of “Champion architects & the profession” summed this up well:

Government advocacy, a campaign to fight climate change and inequities in the built environment, and public awareness efforts influence meaningful change and create a better business landscape for architects.
AIA mailing.

The only government advocacy we need is to give us a decent statute of repose. (Delaware has one of the better ones at 6 years, while Maryland lags behind with 10.) I’d also be happy if they eliminated the unnecessary demands for continuing education, which was something the AIA advocated for when I was active in the group. Brick, stone, steel, and wood don’t change much, and any architect worth his salt should know the building codes pretty well despite the fact they update every three years. (I see CE as a money-making racket, just like the intern development program that’s now in place. That was the reason I took my exam when I did.)

So forget about climate change, since we can’t do a damn thing about it. What we can do is advocate for energy-efficient buildings but let’s allow the market to decide what is best. And my (admittedly limited) research into the term “inequities in the built environment” seems to indicate a preference for the concepts of so-called “smart growth” where everyone is to be packed like sardines into the urban core. Maybe some of us prefer and enjoy living in rural areas.

Finally, if you want to make things easier and more profitable for the architectural profession, can you advocate for fewer regulations and hoops to jump through? There are certain jurisdictions we deal with that seem to have cornered the market on red tape for picayune reasons. It’s almost like they demand their tribute before you get their seal of approval, and clients aren’t always willing to pay for our time and trouble.

Speaking of so-called climate change and hoops to jump through, I would love to have someone explain to me why Delaware is trying to extend these stupid wealth transfers from utilities to state coffers better known as renewable energy portfolio standards? In this session SB33 is already through the Senate, where it passed on a 13-8 vote that was almost partisan in nature (Senator Ennis crossed over to vote with the GOP, giving him an early lead on the Top Blue Dog Award next year when I do the monoblogue Accountability Project for Delaware.)

If natural gas is cutting our emissions in such a way that we are exceeding the goals of the Paris Climate Agreement – even though we were properly out of it for a brief period until that fool Joe Biden painted “sucker” back on our collective forehead – then why are we even bothering with wind and solar power that is, on its face, unavailable at all hours of the day and times of the year? (For example, it’s a sunny day as I write this, but the sun angle isn’t optimal. And I haven’t even discussed the environmental issues when these components reach the end of their lifespan.) If anything, it may be a good time to do a little bit of exploration in Delaware to see if we have gas or oil deposits under our sandbar. It’s not likely the Marcellus Shale comes this far east, but somewhere along the line I thought I saw there was a minor shale field under the Eastern Shore and southern Delaware.

I like to live in a rural area and I like my electricity to be relatively inexpensive. So we really don’t need to have these so-called improvements that basically accrue to the state’s coffers and not ours come into our collective lives.

And now that I’ve done this post I can place my AIA solicitation where it properly belongs – in the circular file.

Backtracking on fracking

Western Maryland is blessed with an enormous amount of cleaner burning natural gas and we need an all of the above approach to energy. I am concerned that there has been a knee-jerk reaction against affordable energy production in our state. Maryland is definitely behind the curve because this administration has decided to politicize the issue rather than take a balanced approach to ensuring we have access to clean and affordable energy sources to power our homes and businesses and grow our economy.

States throughout the country including our neighbors develop their natural gas resources safely and efficiently. Many of these states are realizing an economic boom through gas and oil exploration and are working in concert with groups like the Natural Resources Defense Council to harness these vast resources of domestic energy in an environmentally sensitive way.

Larry Hogan, in response to a WYPR-FM candidate survey, May 2014. (Emphasis mine.)

Three years later, western Maryland is still blessed with an enormous amount of cleaner-burning natural gas, but on Friday Governor Hogan decided it would be better to leave this valuable resource in the ground rather than create jobs and economic opportunities for a section of the state that lags behind the rest of Maryland when it comes to those two very things.

Perhaps we should have seen this coming, though: the temporary moratorium that was in place stemmed from a bill that Hogan allowed to become law without his signature rather than veto it back in 2015. The bill, which as originally introduced was laughably intended to “protect our health and communities,” was amended from a ban extending to 2023 to a prohibition intended to last until October of this year, when the Maryland Department of the Environment was to have regulations in place. But, as Governor Hogan noted in his press conference announcing the new fracking ban, Maryland envisioned the most stringent regulations in the nation – a roll of red tape that would have amounted to a de facto ban if enacted.

And to illustrate the political pressure Radical Green can put on wobbly members of the GOP, bear in mind that the original third reader vote on the 2015 House bill had 45 opposed, but that number whittled down to 33 once the Senate version passed and the House bill (as amended to match the Senate version) went to third reader. The wobblers who changed their votes were Delegates Anderton, Afzali, Beitzel, Carozza, Krebs, Malone, McComas, Miele, Shoemaker, and West. (This list is ten because two Delegates who voted “no” originally were absent the second time, but Afzali changed her vote after the fact to be truly gutless. Interestingly enough, Delegates Anderton, Carozza, Krebs, and Shoemaker all changed back three days later when the Senate third reader came to the House while Delegate Saab opted to join the dark side.) Conversely, the Senate only had two votes correctly in opposition all along, Senators Hough and Ready.

Now we can add Larry Hogan to the list that has wobbled and fallen – this despite a mountain of evidence that hydraulic fracturing, which has been ongoing for over six decades, is safe when done properly. Even the EPA, which put out a final report in the waning days of the Obama administration, noted they found scientific evidence that hydraulic fracturing activities can impact drinking water resources under some circumstances. Yet many of the circumstances they point out could occur at any chemical plant, and they note:

Data gaps and uncertainties limited EPA’s ability to fully assess the potential impacts on drinking water resources locally and nationally. Because of these data gaps and uncertainties, it was not possible to fully characterize the severity of impacts, nor was it possible to calculate or estimate the national frequency of impacts on drinking water resources from activities in the hydraulic fracturing water cycle.

So should I point out again that over 2 million wells have been hydraulically fractured over the last six decades without incident? It seems to me that past performance should be a very good predictor of future results, particularly as the technology advances. And if you read the report, you’ll note that the uncertainty of cause even extends to those limited, rare incidents blamed – many times falsely – on fracking and most publicized by Radical Green.

No one denies there is risk with hydraulic fracturing – just as there are documented issues with low-frequency noise and impacts on bat population with wind turbines and potential for environmental impact as more and more solar panels are spread over the landscape to significant effect – but the rewards from fracking, as measured by both local economic benefits and the lessening of reliance on foreign energy supplies, have been found to outweigh the risks in nearly every jurisdiction where fracking is possible, while the recalcitrant others (Maryland and New York) have believed the hype over the facts.

While Maryland is a small part of the Marcellus Shale formation that has produced the resurgent energy industry in a region that first benefitted over a century ago from an oil boom – there’s a reason we have motor oil from Pennzoil and Quaker State and it’s not because the brand names are cute – this is a time when the domestic oil and natural gas industry is in a holding pattern. Crude oil prices in the $40-50 a barrel range and a relatively constant balance of natural gas supply and demand means that Maryland missed the boat by about a half-decade in the current cycle, but an increased potential in natural gas exports – coupled with a multi-billion dollar investment in Maryland’s Cove Point facility for LNG exporting that’s slated to come online later this year – means our state would have been in good position to benefit in a few years’ time once natural gas exploration began and delivery infrastructure was put in place. (People tend to forget that part of the equation, too.) But politics, embodied in the baseless fear caused by a noisy environmental lobby, ruled the day Friday.

Allow me to let you in on a dose of common sense: there’s no way in hell Radical Green will give Larry Hogan any credit for what he did on fracking come election time. You can bet your bottom dollar that they will flock to whoever the Democrats end up anointing in their primary because their main goal isn’t a clean environment but to have statists in charge of government. Yes, the rank-and-file who might send a couple hundred dollars to the Chesapeake Bay Foundation every year may really care about the health of the bay, but when the people who benefit most from it are the ones who determine the annual “grade” for the cleanliness of the Bay one has to wonder how much of their thumb is placed on the scale. After all, if the Bay had a grade of A and was pristine H₂O, what need would there be for a CBF?

The oil and gas industry doesn’t depend on a government subsidy – they just want a fair and predictable regulatory scheme. But a state which has no problem bending the energy trade by mandating a certain percentage of electricity comes from solar energy and demanding ratepayers subsidize an offshore wind farm seems to have an issue with the source that’s been proven reliable over time and is known as a job creator.

As a ratepayer and voter, I was willing to accept the slight environmental risk of fracking in return for a more prosperous state overall as well as more inexpensive and reliable energy. (And yes, I know that the area in question isn’t one where I live. But if I ever secure a piece of land nearby and someone wants to pay me for the right to use my land to explore for energy resources, I’m glad to oblige. No one has yet assessed the Delmarva Basins on which many of us live for their energy potential.)

In 2014, Allegany and Garrett counties provided almost 1/4 of Larry Hogan’s margin of victory as he carried the duo by 16,466 votes in an election he won by 65,510 votes. Add in adjacent Washington County and that number becomes 35,274 votes, or over half his victory margin. At the risk of losing thousands of votes in that region, Larry Hogan has acquiesced to an environmental lobby that’s not going to give him any credit, any dollars, or any votes for the decision he’s made.

I suppose Larry Hogan thinks he’s got an all-of-the-above electoral strategy, too. But at a time he could have changed Maryland for the better, he instead foolishly chose to surrender to the naysayers.

A rally for a better way of life

I’m certain there’s a percentage of my readers who would disagree with the title, but for those who would like to improve our state there’s a chance to take action: specifically a week from tomorrow, but in general before the Maryland General Assembly begins its annual “90 days of terror” in January.

I was introduced online, through a mutual friend, to one of the leaders putting together a rally in Annapolis, as she explains:

The Maryland legislature is considering regulations that would finally allow natural gas development in our state.

We need to show that Marylanders want responsible energy development and that any regulations MUST be reasonable and consider their impact on Maryland jobs and energy costs.

Please join us Tuesday, December 20 for an Energy Citizens and Energy Nation Rally to support clean and affordable natural gas and jobs for Marylanders!

The Energy Citizens group is springing for breakfast at Harry Browne’s beginning at 8:30 a.m. before reconvening for the rally at 9:30 a.m. on Lawyer’s Mall. (All they ask is that you RSVP first.) They will stay until 11, hopefully long enough to make their point, which is:

A Maryland legislative committee is considering new regulations for natural gas development in our state. Any regulations MUST be reasonable and consider their impact on Maryland jobs and energy costs.

Responsible energy production would give Western Maryland the chance to create thousands of good-paying jobs, boost the local economy, and make energy more affordable for families and businesses across the state. But time is short.

Please Email your Representatives now. Tell them you support responsible natural gas development and to consider jobs and energy prices when any new regulations are being discussed!

(snip)

Hydraulic fracturing is safe, and reasonable government oversight and regulation are appropriate, but Maryland should follow the example of dozens of other states where production has proceeded safely for years.

The Western part of our state should have the chance to create thousands of jobs and stimulate their local economy. Our families deserve affordable energy to heat our homes and power our businesses. (Emphasis in original.)

Now this is the part where I may go off the organizer’s script (if she had one in mind for me) but I’m a guy who tries to give the straight scoop. The lefties* at SourceWatch sneeringly call Energy Citizens “a front group backed by the American Petroleum Institute,” and the backing part is absolutely true. I knew this awhile ago because I’m quite familiar with API. It’s a very good group from which to get energy information, and I have a vested interest in keeping energy as reliable and inexpensive as possible – it’s called electric and heating oil bills to pay. 200 gallons in the oil tank isn’t cheap, but we needed to get them nonetheless to have a full tank once the cold weather hit. I definitely prefer not to have to run my laptop and internet off a battery and at this time of year I like to be something close to warm.

And look at the approach they are taking, saying “reasonable government oversight and regulation are appropriate.” They are not advocating for the Wild West of fracking, but something that is reasonable – unlike the authors of the various proposals in the General Assembly. I’ve not forgotten that the original first reading bill that mandated the halt on fracking through October of next year originally had an expiration date of April 30, 2023 – and only after a panel stacked with “public health experts” as opposed to those expert in “science and engineering” were charged to “examine the scientific literature related to the public health and environmental impacts of hydraulic fracturing.” I wonder what a panel of “experts” appointed by liberal leadership would have found? </sarc>

Bear in mind that the bill was not properly vetoed by Governor Hogan, but he didn’t sign it either. He just let it become law without his signature, rather than tell these misinformed environmentalists to pound sand and dare the Democrats to vote against good jobs once again.

Furthermore, according to that bill, these regulations should have been in place by this past October. The MDE, however, was about 6 weeks behind and put them out November 14, with public comment closing later this week. Assuming they are close to those detailed back in June, the state will have some of the most stringent regulations in the nation. That doesn’t seem to be very balanced or reasonable.

If I were to make a modest, sensible proposal, I would posit that Maryland’s regulations should mirror Pennsylvania’s as closely as possible, for a very logical reason: for most of those companies already doing business in Pennsylvania, that portion of Maryland is but a short distance from their other operations and would likely by overseen by supervisors based in Pennsylvania – a state which, by the sheer size of its share of the Marcellus Shale formation, will have far more natural gas output than Maryland ever will. If Maryland even gets to 10% of Pennsylvania’s output it would be a victory for the Old Line State. So why not make it easy and convenient for those experts in the field, considering that they’ve had the better part of a decade now to iron out the kinks just on the other side of the Mason-Dixon Line?

At the market price for natural gas, we should be doing all that we can to make it easier to create the good-paying jobs (not to mention the royalty payments landowners could receive) for a part of the state that, like the Eastern Shore, always seems to lag behind the economic curve thanks to shortsighted policy decisions in Annapolis. I hope a lot of my Western Maryland friends (and maybe some from our part of the state) go to support a better way of life for themselves a week from Tuesday. They’ll even bring you over to Annapolis from the west side of the state.

You can call me just another Energy Citizen.

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* I like this description of the Center for Media and Democracy, which is the backing group of SourceWatch:

CMD takes significant sums of money for its work from left-wing foundations, and has even received a half-million dollar donation from one of the country’s largest donor-advised funds – all the while criticizing pro-business or free-market advocacy groups who also use donor advised funds or rely on foundation support.

Don’t you love the smell of hypocrisy in the morning?

Passing on prosperity

Since both have been mentioned in the news as potential Presidential candidates, governors Martin O’Malley of Maryland and Andrew Cuomo of New York have been natural rivals for the attention of the various interest groups that make up the constituency of the Democratic Party. It seems that they are always trying to one-up the other in enacting off-the-charts liberal legislation – when one allowed gay marriage, passed draconian gun laws, or pandered to illegal immigrants, the other tried to follow in rapid succession.

Martin O’Malley and Andrew Cuomo also both cast their lot with the radical environmentalists who claimed (falsely) that hydraulic fracturing for energy extraction would ruin their state’s environment. Yet while O’Malley relented ever-so-slightly in recent weeks, allowing the practice but with regulations one energy expert called “onerous and time-consuming,” Cuomo stopped the practice cold in his state by decreeing in an announcement last week that fracking would be banned, timed nicely after his re-election. Observers of both states are scratching their heads about these decisions, both in the media and in the energy industry. In New York, local media bemoaned the lost opportunity while landowners in the affected area called Cuomo’s ban a “worst-case scenario.”

Yet in the middle of all this sits the commonwealth of Pennsylvania, a state which has embraced the economic benefits of the practice to such a degree that Tom Wolf, the incoming Democratic governor of the state won’t ban it. (However, he may stiffen regulations and increase taxes on energy producers, which will be something to watch in the coming months.)

Granted, their good fortune of geography means Pennsylvania has the largest share of the Marcellus Shale which yielded all that natural gas, while Maryland only has a small slice and New York has a small but significant portion. For their part, Ohio and West Virginia also have sizable portions of the formation, while Virginia’s share is similar to Maryland’s. Ohio has been nearly as aggressive as Pennsylvania in taking advantage of the shale – although recently re-elected Republican Governor John Kasich is also trying to increase taxes on producers – while West Virginia is lagging behind their neighbors and just beginning the process of allowing extraction.

It’s a given that fracking isn’t without risk, but neither are installing large solar farms or erecting 400-foot high wind turbines. Yet the natural gas and oil provided from fracking make for a much more reliable energy source than the intermittent electricity provided by the latter pair, sources which ironically need a natural gas backup to be consistent.

As time goes on we will see just what economic effects a fracking ban will have on the affected areas of New York. But as we have seen in states which have already began the extraction, the Empire State is missing out on the potential for investment and return that having the Marcellus Shale provides for those lucky enough to live over it. Hopefully our neighbors in western Maryland will see some benefits in the next couple years as Governor-elect Hogan puts “sensible” regulations in place to benefit all concerned parties.

A sea change in Maryland too?

In the midst of what’s good news about energy production in America – despite the headwinds created by an administration that believes global warming is a large problem while spending millions to prop up failing green energy companies – the question can be asked whether Maryland has achieved its share. I want to quote writer Mark Green from the Energy Tomorrow blog, who writes that based on Energy Information Administration data that:

This is a snapshot of America’s energy revolution – the fundamental shift from energy scarcity to abundance that would have been unthinkable less than a decade ago. The shift is the result of surging oil and natural gas production using advanced hydraulic fracturing and horizontal drilling, harnessing oil and gas reserves in shale and other tight-rock formations. Safe, responsible energy development has made the United States the world’s No. 1 natural gas producer, and the U.S. could become the world’s top producer of crude oil related liquids before the year is out.

Larry Hogan has acknowledged that western Maryland has an “enormous” amount of natural gas and that he favors an “all of the above” energy policy. On the other hand, Anthony Brown is studying the issue to death. At the other end of the state and scale, Brown backs his boss’s offshore wind boondoggle while Hogan mentions that “proponents (of wind power) rarely mention the actual costs which include billions in state and federal subsidies.” In a separate statement, he also decries the potential for offshore wind’s “crony capitalism” under a Brown administration.

You know, there’s no question that the key issue in this gubernatorial race is the economy. Maryland is a state lagging behind its peers, and more and more people speak about pulling up stakes and relocating somewhere else: Delaware, Florida, Virginia, the Carolinas, Tennessee – name a state south of the Mason-Dixon Line and it’s likely someone you knew in Maryland moved there.

But one piece of the puzzle is energy, and those who toil in the oil and gas industry understand what the potential is. In his piece, Green closes by quoting American Petroleum Institute president and CEO Jack Gerard:

We need leaders who reject the outdated political ideology of the professional environmental fringe and the political dilettantes who advance the irresponsible and unrealistic “off fossil fuel” agenda. Because if we get our energy policy right today, we can be the generation that erases what for decades has been our country’s most potent and intractable economic vulnerability: dependence on energy resources from less stable regions and countries hostile to our goals, ideals and way of life.

Writer Rob Port at the Say Anything Blog also asks the pertinent question, and the answer on a state level can be found in Maryland.

I look at it this way. There was a governor and a majority in the General Assembly who were willing to risk over a billion dollars in ratepayer money on something which studies suggested might work but hadn’t been tried in Maryland before, offshore wind. Conversely, given the success of the Marcellus Shale formation in several surrounding states (most notably Pennsylvania), why not encourage the exploration of several other regions in the state which share many of the same characteristics? The worst that can happen is that we find these areas aren’t worthwhile for natural gas with current technology, but the rapidly evolving science of energy extraction means studies done even as recently as a few years ago may be rendered worthless.

Given the correct conditions for marketable extraction of coal and natural gas and an aggressive expansion of power plant capacity which uses those resources, it should be a goal to make Maryland self-sufficient in electricity by 2030. I don’t think offshore wind will get us there, but extracting those resources we have gives us a shot, and provides good-paying jobs for Maryland families who need them.

Plans and schemes for jobs

One recurring theme of this site is my interest in the manufacturing sector, both nationally and regionally. I suppose the realization that much of what we buy is supplied by a nation which points missiles at us and holds trillions of our debt made me consider the need to think a little bit more about self-sufficiency.

In the generations of my 78-year-old father and my last living grandparent, who died at the ripe old age of 90, America built things. Many cite Detroit as an example of where we as a nation once were “makin’ Thunderbirds,” but we made a million other consumer products as well, all over the country. And while the Thunderbird hung on through 2005 – as did my late grandfather – many of those other manufacturers long since had abandoned us for greener pastures overseas where things could be made more cheaply and regulations weren’t nearly as strict. The latter had to be the reason that companies could spend huge amounts to ship products across the ocean in order to bring them back to our market – the market where, in many cases, these same products were once made in factories which sat shuttered and dormant.

That’s why I’m glad to see some of our gubernatorial candidates pay attention to this long-neglected sector. In doing some research for this piece, I found that just one on the Democrat side, Doug Gansler, is making an issue out of manufacturing and doing more than simply giving platitudes in addressing it. I must say some of these ideas are worth discussion and adaptation; unfortunately Doug takes the time to pander to a certain crowd in advocating for the self-defeating ideas of a higher minimum wage and additional mandated sick leave – these would only discourage manufacturers and businesses from locating in this state. Gansler doesn’t quite understand the concept of market forces with some of his proposals, but with some tweaking a few – particularly the apprentice program – could be workable as an expansion of vocational education.

On the other hand, the leader in this arena on the GOP side is Ron George. While he already had a good beginning as far as job creation goes, yesterday he expanded on his existing ideas of rebuilding manufacturing in Maryland – as he pointed out at our Lincoln Day Dinner, “I cannot cut welfare payments unless I have those entry-level, mid-level jobs.” This is what George proposes to do:

The technology and life sciences industries in Maryland have taken off in part because of significant tax credits and a Tech Services tax repeal. By trusting you to use your revenue to enhance your businesses and create jobs, Maryland has become one of the most successful regions in the country for IT, healthcare technology and biotechnology companies.

I’m proposing we make the same investment in attracting and rewarding new manufacturing firms for creating jobs in Maryland. As Governor:

I will lower the Total Effective Tax Rate of new capital-intensive manufacturing firms from today’s current rate of 31.9% to 20% by 2016.

In the short term, I will work with local and county governments to lower property tax rates and with the legislature to exempt equipment from the property tax of manufacturing firms.

By 2018, I will eliminate the business personal property tax, returning stability and certainty to the manufacturing industry.

This proposal is an investment in the perseverance and innovation of Maryland workers. We must bring manufacturing back to Maryland.

While there is an appeal to eliminating the income tax we have to bear in mind that, as currently constituted, revenues from the income tax make up 22 percent of the overall pie, while business taxes make up far less – eliminating them, one could argue, would create enough of a multiplier effect that the other taxes could eventually also be reduced (with prudent spending, of course.) Having to account for the loss of a 22 percent chunk of state revenue is the reason why all of the income tax proposals out there phase themselves in rather than eliminate the income tax in one bite. (Ever notice, though, that tax increases are rarely phased in?)

But there’s also a lot being left on the table through the short-sightedness of the current administration, and while Gansler and his cohorts on the Democratic side are (literally) tilting at windmills for job creation, we can conclusively show that one $3.8 billion project will help a portion of the state succeed long-term. Maryland was one of the first states studied in a new series of blog posts detailing the impact of the energy industry.

And while the API concedes the state isn’t a leader in the production of oil and natural gas, there’s nothing saying we can’t hold our own through a combination of Marcellus Shale exploration in the state’s panhandle, the prospect of more natural gas in the heretofore barely- or unexplored Taylorsville, Culpeper, Gettysburg, and Delmarva (!) Basins, and perhaps oil drilling offshore. Even the idea of testing the waters can have a positive economic impact on a particular area, and one major key in attracting industry is having inexpensive sources of energy. We hear a lot of complaints from industry about the cost of electricity in Maryland, but having more natural gas (and the power plants to use it) would be of assistance in drawing manufacturers.

Now if the candidates can put together a proposal of transportation structure improvements, one which includes an interstate-grade highway north from Salisbury to I-95 (with the cooperation of Delaware) and the completion of the originally envisioned I-97 across the Potomac to meet with I-95 near Richmond to save trucks from having to deal with congestion around Washington so goods could find their way to market much more easily, I’d really be a happy camper. But for now these will have to suffice.

Just as an aside, you just might be hearing a lot more from me on the subject. Stay tuned.

2014 Maryland dossier: part 4 (energy policy)

Today I work into the fourth part of my series, on energy policy.

It’s clear to me that if the state wants to become more successful at improving the standard of living of its citizens, we have to find ways to make energy more accessible and less expensive for the average consumer. That’s the starting point for my critique on energy policy.

There are many points the Republican candidates seem to agree on, which is to be expected.

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David Craig: Craig said it is also time to stop studying fracking and enable natural gas extraction to take place in Western Maryland in an environmentally-responsible manner. (press release, October 4, 2013)

Harford County Executive David R. Craig, who also is seeking the Republican nomination, said estimates show fracking in Garrett and Allegany counties will bring as many as 14,000 jobs.

If the state continues to study the issue, the people of Western Maryland will suffer as business go to frack in neighboring Pennsylvania, Ohio and West Virginia, he said. (Gazette, September 19, 2013)

Ron George: Make Energy More Affordable, Available, and Less Dependent on unstable governments half way around the world. This includes developing natural gas resources and using clean coal for our own needs. (campaign site)

“I have to let you know that I’ve really struggled with the issue and studied the issue, I’ve listened to the fears and looked at the science,” he said. “And I’ve come down on the side of natural gas drilling for ourselves, for Maryland’s use.”

Fracking now will help the state with its energy costs and diversify its alternative energy production, said George, a GOP candidate for governor.

“We have to have other alternatives that are clean,” he said. (Gazette, September 19, 2013)

“Before we go building 40 of these [wind turbines] offshore, let’s do this step by step,” said Del. Ron George, R-Anne Arundel. He offered an amendment to build one wind turbine to study the viability of offshore wind in Maryland. He said the Virginia legislature approved a similar plan on Wednesday.

“It will test the economics of large scale offshore wind projects, it will test the mechanics of construction and issues related to offshore wind projects, and it will study the ability of offshore wind projects to withstand weather conditions” 11 miles off the coast of Ocean City.

“It is really doing the next step, so we don’t go wasting money, and we make sure we do it right,” George said. (Maryland Reporter, March 29, 2012)

Charles Lollar: I support development of Maryland’s Marchellus shale natural gas reserves. (campaign website, “Natural Resources”)

Demand that public utilities be held accountable to their customers. (campaign website, “Accountability”)

In order to reduce (energy prices) Lollar wants to remove subsidies and allow all forms of energy to compete on their merits. This includes allowing fracking in Maryland’s Marcellus shale so that natural gas can lower the state’s energy costs. He sees O’Malley’s subsidies for wind energy as a way of picking winners and losers in the market, and opposes to the handouts. (Real Clear Markets, September 3, 2013)

Lollar said the state could quickly come out of its perennial deficit if it allowed fracking in Maryland. Lollar emphasized the practice would have to be well regulated, but not so much so as to stop businesses from existing. (SoMDNews, November 1, 2013)

“We absolutely need to take advantage of that resource, not just as another energy source but to put people to work,” Charles Lollar, Republican candidate for governor, said of natural gas. (Gazette, September 19, 2013)

I think they [Pepco] have an unfair relationship advantage. I’m not prepared to blame the Democratic party but I am prepared to blame the individual people that have made the system what it is. I do believe that when you have an unbalanced system that heavily favors one party over another, this is the kind of response that you get. There’s a lot of strong-arming. There are strong and forceful relationships that are literally causing people to do things that in their right mind, they would not do.

The power held at the highest levels of our state is incredible and it’s crushing good elected officials and appointed commissioners that want to do the right thing. Let’s put the blame where it needs to be. This idea of charging someone a fee before they get appropriate services is wrong no matter what party you’re from. (Bethesda Now, November 7, 2013)

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Insofar as energy policy goes, our friends across the aisle greet the issue with reactions ranging from radio silence (Anthony Brown) to a belief that poultry waste can be a “responsible investment” (Doug Gansler) to a pedal-to-the-metal emphasis on so-called “clean energy” and outright hostility to fracking (Heather Mizeur). None of these proposals meet the twin tests of reliability and market worthiness that coal, oil, and natural gas do. In particular, one has to ponder the viability of poultry waste as a fuel after the Waterkeeper Alliance picked on one family for months in an losing effort to make an example of them, a move one local environmental advocate said “definitely sets us back.”

**********

So what I believe had “definitely set us back” is the de facto moratorium on fracking Maryland has had in effect for the last few years, as the state continues to twiddle its thumbs and study the issue at length in “setting an extremely high bar for industry.” Meanwhile, Pennsylvania has seemed to find a reasonable balance between environment and energy; thus natural gas exploration and extraction is creating jobs and revenue for those counties fortunate enough to sit atop the Marcellus Shale formation.

I think David Craig gets this part of the picture, but there’s a lot more to energy policy than just fracking. It would be good to know where he stands on other market-based reforms like repealing the wind energy bill and renewable energy portfolio – as you’ll see in a future segment David has his eye on restoring a balance between economy and environment. So I give him 4.5 of 8 points.

Ron George took a while to come down on the side of fracking, but also seems to foresee more of an “all-of-the-above” approach. Included in that was advocating a single-unit pilot project for offshore wind, despite the fact the bill he attempted unsuccessfully to amend, if passed, had a fiscal note which warned “State expenditures…increase minimally beginning in FY 2013 and significantly beginning in FY 2017 due to higher electricity prices.” Perhaps his view on this has evolved, however, as he did not offer the same amendment in 2013 and voted against O’Malley’s bill. As you’ll see below, he should get credit for weighing evidence.

But it’s difficult to reconcile George’s stance with his previous votes on the subject. Maybe he’s reached a level of satisfaction with the state’s regulations and if so he’s a little more for red tape than my taste would dictate; for that answer I need more guidance. At this point I’ll score him as a solid 4 of 8 points.

Charles Lollar stands with the rest of the Republicans on fracking, which is good. He also makes it sound like O’Malley’s wind folly would be terminated, which is great. But there’s one piece of the puzzle which troubles me greatly.

It’s noted in the Bethesda Now story, where Lollar was quoted as saying “charging someone a fee before they get appropriate services is wrong,” that the forum was intentionally held without a PEPCO representative present. Had Lollar studied the issue more carefully he would have known this rate increase was based on an executive order from Governor O’Malley, who touted the increase as “hardening” the electric grid. The idea is to accelerate the process of preparing the grid for major weather events, which may have been the point brought out by a PEPCO spokesperson had one been invited to the event.

One thing about being an elected official is that you generally hear all sides of the story as part of your duties in office. On the other hand, coming in without that experience means you have to work at the issue. On his front page, Charles claims his goal is to “bring together people of different political beliefs, talents and backgrounds to develop solutions to difficult problems.” Yet he attended a forum where a party to a dispute is sandbagged, and that’s disappointing.

It’s populism to pick on a utility without hearing their side of the story. So my question is whether “well regulated” for fracking will be determined by the hype or the facts. Based on this concern I can only give Charles 2.5 out of 8 points at this time.

**********

The next portion is something I would anticipate the candidates do quite well in: Second Amendment rights. I’m hoping to follow that up with a discussion of what the candidates would do about Obamacare, and for that answer I had to ask directly.

It’s also worth pointing out that this process would evolve. In his answer to my Obamacare question, Ron George elaborated a little on education so I believe I should add that portion in. It wouldn’t surprise me as the campaign rolls along that these pieces might be revised once or twice along the way; you should expect no less.

Divergent directions

As you all know I have an interest in the energy field and a disdain for the unproven – so I’m no big fan of technology that’s not reliable 24/7/365. While renewable energy has its uses in limited applications, such as the solar panels on one’s roof or the windmill which augments the rural homestead, all of these sources need a backup for when we endure a week’s worth of cloudy days or still weather. So I have a bias toward the tried-and-true energy sources of coal, oil, and natural gas.

Having said that, it amuses me when I see the potential for infighting among the environmentalist crowd as we could have a battle royale between the animal rights crowd and the renewable energy set – the reason: a study published in the journal BioScience and gleefully critiqued by Steven Hayward at Powerline estimates that 600,000 or more bats are killed each year by wind turbines – a much higher toll than previously thought. And as Michael Todd, writing at Pacific Standard, explains, it’s not for the reason you might think:

Given that wind turbines are basically a collection of whirring blades, you might assume that the bats found dead have been sliced and diced. You might also wonder how an animal that uses radar to find a single mosquito in the dark could fail to sense a monstrous wind turbine. The University of Calgary’s Erin Baerwald explained this to Discovery News in 2008: “When people were first starting to talk about the issue, it was ‘bats running into the turbine blades.’ We always said, ‘No, bats don’t run into things.’ Bats can detect and avoid all kinds of structures,” and are even better at detecting stuff that’s moving. No, they’re exploding. As I learned last year, “Baerwald and her colleagues discovered that bats’ ‘large, pliable lungs’ blow up from change in air pressure created by moving blades. Up the 90 percent of the dead bats they examined showed the internal bleeding consistent with their argument. Birds, by the way, have different kinds of lungs so their deaths are from the more predictable blunt-force trauma.”

Of course, bats are very creepy creatures and tend to be a nuisance if they get into your house. But they have one tremendously useful purpose: keeping the mosquito population at bay. A commentator on Hayward’s post writes about watching bats fly around at dusk and I can vouch for the fact that it is interesting to watch them maneuver around in the fading light of a summer evening, gorging themselves on those pesky bugs.

And the problem seems to be worst in the Appalachian part of the country, which includes the western part of Maryland. While it’s not prime territory for efficient windmills, that area is probably the most desirable in the state for the purpose.

Yet there is another energy source where the two westernmost Maryland counties are prime territory, and that’s the Marcellus Shale formation where natural gas is plentiful deep underground – and by deep I mean hundreds and hundreds of feet below the aquifers. I point this out because portions of New York state endure some of the same effects as their Marcellus cousins in Maryland; both are primarily rural areas which can use an economic shot in the arm. As is pointed out in a Wall Street Journal editorial from last week by Fred Siegel, those areas of southern New York along the Pennsylvania border suffer from the same faraway NIMBYism that the western panhandle of Maryland has to deal with – those who live nowhere near the area think they know best.

But unlike Maryland’s Martin O’Malley, whose sole response has been to study the subject to death, his potential Democratic presidential rival from New York, Governor Andrew Cuomo, at least was willing to allow some limited fracking in that specific region – that is, until he was told by the environmental extremists, “we’ll cream you if you open New York state to fracking.” While neither the western edge of Maryland nor that five-county area of southern New York along the Pennsylvania border (from Steuben County on the west to Broome County on the east and including adjacent Chenango County) has the worst unemployment numbers in their respective states of Maryland or New York, the fact is they can do better.

And it’s not just the energy companies booming – this story by Barbara Miller in southwest Pennsylvania’s Observer-Reporter newspaper (h/t Energy Tomorrow) points out the financial gains in just two of the state’s counties. Quoted in the story was Washington County Commission Chairman Larry Maggi:

I don’t want to use the word envious, but (other counties are) struggling and they do not have this resource to help them balance their budgets.

While amounts from $6 million to $18 million are drops in the bucket for a state budget, they can potentially be huge for some of the rural counties affected. Energy companies are accustomed to paying a fair royalty fee to local governments, knowing the market will support that toll while allowing a reasonable profit.

So, as you’ll see in the next week or so when my candidate dossier on energy is complete, there’s a big difference in stance between Maryland Democrats and Republicans on the fracking issue. Apparently most Democrats are happy with blowing up bats and chopping up birds, but Republicans want to create jobs.

Someone else’s ‘new normal’

Every so often I point out how other states are taking advantage of avenues our fair state of Maryland cannot – or will not – compete in. One such area is energy exploration, which has benefited states like Texas and Alaska for decades, and more recently turned North Dakota from a state which was stagnant in population and lacking opportunity to America’s fastest-growing state, with a “new normal” of energy-led growth. Indeed, taxable sales increased 28.7% from 2011 to 2012, according to North Dakota Tax Commissioner Cory Fong.

Obviously in the several states results may vary, and Maryland doesn’t have that same petroleum-rich land mass that North Dakota does. But in the western end of our state we do have the potential for some nice job creation if we allow the tapping of the natural gas-rich Marcellus Shale formation like Pennsylvania has done for several years. And who knows what we could find under Maryland’s offshore waters? It’s doubtful we’ll ever be confused with a state like Louisiana, where dozens of oil platforms lurk just offshore, but the potential is there for a healthy bump in economic activity should we choose to take advantage of this.

One thing which seems to be lost in the question about whether oil and natural gas exploration would be good for the state is the sort of jobs created. Say what you will about the energy industry, but they tend to pay better than flipping burgers at McDonald’s. Sure, it’s likely to be demanding physical work for those who are semi-skilled, but they would be making a living sufficient to support a family – reminiscent of a bygone era where dad went to work 40 hours a week at the auto plant “makin’ Thunderbirds” (as the old Bob Seger song went) and mom could afford to stay home with the kids. And it also brings up the point about not necessarily needing a college degree (and the tens of thousands of dollars of associated debt) to make a good living. Then again, those who have the intelligence and drive to be engineers or even technicians and complete the college training required would find a very welcoming field. Our neighbors to the west in West Virginia have heeded this call.

Back in the 1970s, at the height of the oil crisis, those of us in rural areas had a saying that we should trade the OPEC nations a bushel for a barrel – they had plenty of oil but they needed food to feed themselves – and we had plenty of it. But in America we could develop the potential to sell other nations both the bushel AND the barrel simply by getting out of the way of energy production and dropping this silly notion about producing ethanol from corn.

Why not get the best of both worlds? All we need is some truly forward-thinking leadership, the kind which realizes we have the potential under our very feet to be dependent on no one outside of North America for our energy needs and future growth therein.

A path not taken – why?

It’s interesting that last night I pointed out in passing North Dakota’s success in bringing their per-capita income to the cusp of the top five in the nation when even more encouraging news recently came out for them. This update is from the Energy Tomorrow blog in a post by Mark Green:

The U.S. Geological Survey has new estimates for oil and natural gas in the Williston Basin shale area that simply blows the doors off previous estimates:

3.65 billion barrels of undiscovered, technically recoverable oil for the Bakken Formation.

3.73 billion barrels for the Three Forks Formation.

The total, 7.38 billion barrels, is a two-fold increase over USGS’ 2008 estimate, which included only the Bakken Formation because Three Forks wasn’t thought to be productive.

If you’re wondering where the Williston Basin is, perhaps this USGS map will help. Note that this formation is different than the Marcellus Shale formation which encompasses the western end of Maryland. But consider that North Dakota has the lowest unemployment rate in the country, and while it’s not necessarily glamorous tasks requiring a master’s degree or specialized training, there is a lot of work available out on the plains.

But the principle outlined later in the piece by Green remains true regardless of the conditions:

The dramatic increases in these oil and natural gas estimates are a credit to industry initiative and the application of ideas and technology – in non-federal areas where oil and natural gas development is supported and encouraged. These reserves underscore the game-changing nature of unconventional oil and natural gas – again, thanks to hydraulic fracturing – that could support the creation of 3.5 million jobs and more than $5.1 trillion in industry cumulative capital spending by 2035, according to an IHS Global study.

Obviously the small portion of our state which happens to lie within the Marcellus Shale region would only see a fraction of that benefit. But what about offshore oil? We don’t know because no one is being allowed to do the necessary leg work to drill and find out. There could be an energy windfall off Ocean City which has nothing to do with thirty-story high wind turbines but we can’t say. Indeed, we could have no viable oil deposits there, either.

But factor in that just five years ago no one thought the Three Forks Formation was commercially viable for oil, and now there’s the potential for 3.7 billion barrels. (Granted, our daily consumption is about 20 million barrels of oil per day so by itself the field isn’t huge, about six months’ worth. Yet you can add that to all our other potential, not to mention the near-certainty that technology can eventually enhance our findings.)

Because I favor the expansion of an energy type which has been proven to be efficient and relatively cheap in comparison to other modes, some have called me a shill for the oil industry. Sorry, I don’t work for them – although if they can use a writer, I certainly would entertain the offer. I just happen to know that an economy which is growing the right way needs to expand their usage of energy so mankind has to expend less and allows us more time and effort to devote to improving our lot in life.

As I said yesterday, the part of the state which tends to vote against its own best interests is the part which, in this case, is sending useful idiots who believe the garbage about the “dangers” of fracking to Annapolis. No, the process is not risk-free, but no endeavor worth doing is. We’ve placed ourselves with New York as two states falling far behind the curve on energy exploration, but 2014 provides us the chance to correct that mistake.

Odds and ends number 69

It’s not meant to be a weekly Saturday fixture, but thus far in 2013 it was worked out that I’ve done an O&E post each Saturday. (I have to look the prior one up to see what number I am on – can’t duplicate the series, you know.) So once again I have a boatload of items which deserve anything from a sentence to a few paragraphs, but not enough for a full post by themselves.

First of all, the news is full of angst over the Sandy Hook massacre, mainly because the knee-jerk reaction has been: we need more gun laws. But MDYR president Brian Griffiths called Governor Martin O’ Malley’s new gun provisions just simple posturing:

Instead of introducing supporting meaningful proposals that would actively reduce gun crime, O’Malley has decided to sign on to proposals that will have only one meaningful impact: to inhibit the ability of law-abiding Marylanders to purchase and possess firearms.

Yet I suspect one proposed Maryland gun law will go nowhere. Delegate Pat McDonough is slated to introduce “The Criminal Gun Control Act,” which, as he terms, will:

…prohibit any offender convicted of a criminal act involving a gun from receiving any form of early release. This proposal would include parole, probation, or good time early release credits. The bill would also disallow a plea bargain.

After claiming 40% of all Baltimore City gun murders were perpetrated by felons with previous gun law violations, Pat added:

The solution to gun violence is not to destroy the Constitution and law abiding citizens’ rights to bear arms. Politicians are hypocrits (sic) when they attack good citizens and pass laws that benefit criminals like early release.

I thought, though, there was already an extra five years tacked on to a sentence for committing a crime with a gun. Perhaps someone in the judicial system can clue me in on why that’s not effective.

Meanwhile, Maryland Shall Issue is more succinct and to the point:

Respectfully tell those you speak with that you are against Gun Control in all its forms. You do not need to pick the magazine limits, or discuss the definition of so-called “Assault Weapons.” You must make your representatives understand that all Gun Control must be off the table.

Compromise is not possible when it comes to fundamental rights. Our lawmakers must be told that we will not willingly give up any of our rights. They will need to take them from us.

Maryland faces elections in 2014. Make sure they know we will remember who stood for our rights, and who wanted to deny your fundamental right.

Of course, when the chips are down and government has overstepped their bounds, there is the option of non-compliance, a route that Patriot Post editor (and one of my few bosses) Mark Alexander is vowing to take.

I hereby make this public declaration: In keeping with the oath I have taken in the service of my country, I will “support and defend” Liberty as “endowed by our Creator” and enshrined in our Constitution, “against all enemies, foreign and domestic.” Accordingly, I will NOT comply with any defensive weapons ban instituted by executive order, legislative action or judicial diktat, which violates the innate human right to defend self and Liberty, as empowered by “the right of the People to keep and bear arms.”

After all, wasn’t it Hillary Clinton who said “we have the right to debate and disagree with any administration?” Last time I checked, inalienable rights endowed by our Creator trumped laws which violate same.

Now it’s time to turn to another issue where our state government is failing us: economic growth and opportunity. I talked about one aspect of this the other day, but Change Maryland and Chairman Larry Hogan also had some suggestions for Martin O’Malley on rebuilding Maryland manufacturing:

Since 2007, Maryland lost 20% of its manufacturing employment base, the 10th worst decline in the country. Over 26,000 manufacturing jobs vanished during that time.

“It is unacceptable that the state’s most powerful elected officials do nothing with numbers as clear and convincing as these,” said Hogan.”These are the results you get when economic development is nothing more than cherry-picked pie charts and bar graphs in the Governor’s power point demonstrations.”

Just over a year ago, (New York’s) Governor Cuomo forged a three-way agreement with the senate majority leader and assembly speaker on executive proposals to cut taxes and create jobs in advance of the 2012 legislative session. The corporate income tax rate for Empire State manufacturers was cut to 6.25%. Maryland’s rate is 8.25%. New York’s decline of year-over-year manufacturing jobs is 1.4%, less than half of Maryland’s decline during the same period.

Hogan urged that, like so many other areas where O’Malley has followed Cuomo’s lead, a tax cut for businesses should be considered. Yet the advocacy group stayed on O’Malley this week like white on rice, also condemning his bloated budget:

This budget increases spending 4% over last year, to a record $37.3 billion, and does nothing more than continue the spend-and-tax governing that Martin O’Malley feels will further his political objectives.

Nowhere in this budget document is any mention made to helping Maryland’s blue collar workers and other regular working people. However, we’re all told to wait for some undefined sales and gas tax increase later on that will hit poor people the hardest.

Missing is any understanding whatsoever on how to bring jobs and businesses back to Maryland.

Hogan had more criticism for the Governor:

Martin O’Malley also showed again today in the budget briefing slide show for reporters why he is the most partisan governor in America, lauding the President for wanting to raise the debt ceiling and blaming in advance the U.S. House of Representatives for any largess that may not come Maryland’s way.

Martin O’Malley only wishes he had a debt ceiling, but unfortunately for hard-working Maryland families he has to raise taxes and fees on an almost annual basis to maintain the wish list he calls a budget. The $37.3 billion docket proposed for FY2014 is the largest in Maryland’s history and is a far cry from Bob Ehrlich’s last budget in FY2007 that totaled $29.6 billion. (Ehrlich’s last budget, by the way, was 12% higher than the $26.4 billion tab the previous year, in FY2006.) Up 4 percent from last year, O’Malley speaks of “cuts” but those cuts are only in his fantasies because the budget is 26% higher than it was seven years ago and up 41% from FY2006 levels. For most of the rest of us, we’ve not seen a 41% increase in our salaries since 2006.

It’s worth pointing out on the whole job creation issue that small businesses across the country fret about the impact of government, with the results of a new survey by the advocacy group Job Creators Alliance pointing this out. Taxes were the number one issue, with fully one-quarter of the 600 small businesses survey placing it atop the list. Add in the effects of Obamacare and government regulations, and the response swells to nearly half of those surveyed.

The group was pessimistic in its assessment, stating:

As America’s small business owners look forward at 2013 they do so with a great deal of concern about the obstacles Washington is placing in their path. As the engine of job creation, pessimism among small business owners does not bode well for job growth this year.

Lest we forget, 7 to 8 percent unemployment seems to be the “new norm.” Of course, if they untied the hands of the energy industry we could do a lot better. (That includes Marcellus Shale, Governor O”Malley, but not your pipe dream of offshore wind.)

But to get jobs, we need a better educational system and that means giving parents a choice in where to send their child for their education. National School Choice Week begins next Sunday, but no local organization on Delmarva has yet stepped up to participate in an event. (There are 22 in Maryland, but all of them are on the Western Shore. No events are planned in Delaware or on the eastern shore of Virginia.)

As it turns out, my fiance made the choice to send her child to a private, faith-based school. It’s good for her, but it would be even better if money from the state was made available to cover her tuition and fees. Years ago I volunteered for a political candidate whose key platform plank was “money follows the child” and I think it makes just as much sense today.

So that’s yet another wrapup and cleaning out of the e-mail box. We’ll see if I go four Saturdays in a row next week.

Shocker: capital leaves a high-tax state

I would have argued for a release which wasn’t on a holiday week – a point I made to spokesman Jim Pettit – but on Tuesday Change Maryland released a fascinating study about the migration of capital from Maryland to other states; a study which also looked at the effect on each of Maryland’s 23 counties and Baltimore City.

In the release, Change Maryland Chair Larry Hogan is quoted as saying:

A growing tax base is the ultimate win/win situation in public policy. It eases the pressure to raise revenues, and conversely, a shrinking tax base often leads to a troublesome tax-and-spend downward spiral as actual revenues fail to meet estimates.

Welcome to Maryland, huh? How many gimmicks has the state tried over the last half-decade or so to address a yawning structural deficit? We were told the tax hikes in 2007 would do the trick, but if that wasn’t the case we would be rolling in dough from all the casinos we would build to keep those Free Staters wagering at home instead of traveling to Delaware or West Virginia to play those one-armed bandits. And so on, and so forth – meanwhile, the state continues to increase spending at a rapid clip, daring revenues to try and keep up in a losing race. The Change Maryland group also has a handy list of the 24 tax and fee increases we have endured since Martin O’Malley came into office inheriting a budget surplus in 2007.

So when I received a preview of this study on Monday, the first thing I naturally gravitated to was how it affected my home county of Wicomico, which has had its own budgetary struggles over the last couple years. Those of the liberal persuasion – a number which includes our County Executive, Rick Pollitt – blame a voter-imposed revenue cap for part of the problem, but a larger issue is the rapid decline of property values that, through property taxes, make up a significant portion of county revenues.

Whatever the reason, the Change Maryland numbers show a stark difference between Wicomico and neighboring counties on the lower Eastern Shore. Using the factors of those coming and leaving, our overall income tax base declined 0.77% while each of the three surrounding counties (Dorchester, Somerset, Worcester) increased at 0.47%, 0.16%, and 2.07% respectively. Worcester’s gain was the largest in the state, with Kent County on the Upper Eastern Shore second at 1.55%.

While the Change Maryland analysis focuses on larger counties, Hogan also had encouraging words for the rural parts of the state:

I’m very encouraged by how well we’re doing in the rural and outlying counties. These small economic engines are powering the state forward by attracting new residents. Clearly where we need to see improvement is in our largest jurisdictions. Baltimore City is losing its tax base at unacceptable levels and Montgomery County’s stagnant tax base will further tarnish its business reputation as elected officials seek more revenue to make up for budget shortfalls.

Yet there are three exceptions to that rural/urban rule, as Allegany County in the western panhandle lost quite a bit of its tax base as did Caroline County (also on the Eastern Shore.)

I think the problem can easily be addressed for Allegany County by allowing the extraction of natural gas from the Marcellus Shale which lies underneath; meanwhile, Caroline County is such a small number to almost be an anomaly. However, Caroline is a very rural (and landlocked) county lying somewhat off the beaten path and attracting jobs and residents can be difficult in those cases.

On the other hand, the obvious point Change Maryland is making about the lack of encouragement to business growth is most reinforced by the tax base declines in Baltimore City and County along with the close Washington D.C. suburbs of Montgomery and Prince George’s counties. Their tax base may be shrinking, but combined these entities make up about 60% of Maryland’s roughly 5.8 million residents.

So that leaves poor old Wicomico County, which is flailing just like the big boys. But why?

The liberal and Pollitt argument would go something like this: because our budgets were made artificially tight by the revenue cap, we couldn’t “invest” in quality-of-life aspects of government like education and recreation to attract people to live here. But the key attraction to an area to businesses is generally how receptive the location will be for the bottom line – even though Perdue is located in Wicomico County many of its workers choose to live in other areas for various reasons, whether lower property taxes, better housing or schools, or just liking a place to live enough to make the extra commute worth it.

If you look at the actual Wicomico County numbers, it’s interesting to see that the number of filers declined by just 45, out of a total of over 2,000 on each side – it’s not a statistically significant change. But add in the dependents and the number swells to an outflow of 215. It’s a suggestion that families with kids are leaving the area; naturally those on the Left would quickly indict the lack of spending on schools and quality of life as a culprit.

But the income difference is stark enough to suggest that it’s truly a lack of good job opportunities that is costing Wicomico County – there’s about a $5,000 income differential between those leaving and those coming in. In other words, good-paying jobs are being lost and replaced by ones which aren’t as lucrative. It’s one thing that I wish Change Maryland had included, but instead I did the simple math.

The first number in these upcoming series is the income (in thousands) per filer coming into each county and Baltimore City. The second number is the income (in thousands) shown from outgoing filers, with the third plus-or-minus number being the difference between the two:

Allegany: 31.48, 37.73, (-6.25)
Anne Arundel: 51.74, 53.22, (-1.48)
Baltimore City: 37.81, 43.83, (-6.02)
Baltimore County: 42.44, 46.28, (-3.84)
Calvert: 57.61, 53.71, +3.90
Caroline: 35.12, 31.22, +3.90
Carroll: 55.14, 47.76, +7.38
Cecil: 45.86, 45.53, +0.33
Charles: 48.52, 48.89, (-0.37)
Dorchester: 34.13, 35.40, (-1.27)
Frederick: 53.55, 50.64, +2.91
Garrett: 48.45, 32.48, +15.97
Harford: 52.17, 48.51, +3.66
Howard: 61.39, 59.05, +2.34
Kent: 48.79, 36.24, +12.55
Montgomery: 58.62, 59.00, (-0.38)
Prince George’s: 40.18, 40.85, (-0.67)
Queen Anne’s: 58.41, 49.64, +8.77
St. Mary’s: 50.51, 49.36, +1.15
Somerset: 26.74, 27.00, (-0.26)
Talbot: 53.00, 46.96, +6.04
Washington: 39.12, 38.59, +0.53
Wicomico: 31.44, 36.88, (-5.44)
Worcester: 49.67, 34.53, +15.14

Looking at the numbers through this lens, you can see that Wicomico is right there with Baltimore City and Allegany County in bleeding good-paying jobs and attracting what might be considered the working poor. Oddly enough, both Wicomico and Allegany border the two best performers on this particular comparison as both Garrett and Worcester counties are attracting new and much more affluent tax filers.

My theory on this stark differential is that these wealthier newcomers are retirees who wish to live out their years by the beach or up in the mountains, not necessarily those drawn because of good-paying jobs. A combination of retirees and people who wish to live in more rural areas, perceiving a better quality of life there, and don’t mind a long daily commute might explain the success of Eastern Shore counties like Kent, Queen Anne’s, Talbot, and perhaps even Caroline.

And then there’s the group that simply threw up their hands and moved out of the state entirely. The Change Maryland study points out Virginia was a major beneficiary of Maryland’s losses, which makes sense considering those who work in Washington D.C. can just as readily commute from Virginia as they can from Maryland. Dan Bongino – who’s familiar with working in Washington as a former Secret Service agent protecting the President – has mentioned the fact that many considered him “crazy” for selecting Maryland over Virginia when he moved here from New York (because of the tax burden) on the campaign trail. But “I saw Maryland first and I fell in love with it,” said Dan.

Unfortunately, there are too many other pragmatic thinkers who may love Maryland but are deciding to vote with their feet and depart for greener financial pastures. It will be the job of those like Hogan and Bongino to shake up the state and place it back in a positive direction for job growth by encouraging business investment instead of considering wealthy people cash cows to milk until these producers crumple over from exhaustion.