We need to store fat from the gas-feeding frenzy
by Paul Larmer
Every fall, black bears enter a ravenous state in which they will do almost anything for food. Biologists call it hyperphagia — the time of super-eating. Bears in hyperphagia can get into trouble if their search for calories leads them to our backyards or to garbage cans behind the local diner.
We Westerners have also been known to let our appetites get ahead of our brains. Witness the rush for beaver, buffalo, gold and land. In each case, the success of a fortunate few spawned a popular rampage that soon outstripped the resource. Boomtowns that were built overnight collapsed the next day when the bust overtook them, and everybody bolted off in search of the next great thing.
Today, the super-hunger is for oil and gas. There is a mind-boggling amount of exploration and drilling in the West, and this boom looks to go on forever. But it won’t, and Westerners should be asking themselves whether they are ready for the inevitable bust.
By all indications, most Western states could do a better job of using the considerable tax revenues coming in from the gas fields. A flush New Mexico, for instance, spent $216 million of its oil and gas revenues this year on tax rebates and other tax breaks to residents. Sounds great, but this solves none of the state’s problems. While the state has established a trust fund for future needs, there’s no shortage of places to put money right now: New Mexico ranks first, or nearly first, in the nation in child poverty and the number of minimum wage workers, and it is last in school test scores and a host of other categories.
Colorado has done the worst job reaping the boom, due in part to weak taxing policy and little foresight.
"The last energy boom in Colorado (25 years ago) came and went, and we didn’t really put any money aside for leaner times," says Colorado state Rep. Kathleen Curry. "We used it, and now the same thing is happening again."
Wyoming is doing the best job, having reaped about $1.5 billion this year in taxes, royalties and lease payments from the oil and gas industry. Thanks to the planning of past and present leaders, the state, with a population of just over half a million, has placed more than $3.3 billion in trust to help fund schools and other government services.
In the Cowboy State, oil and gas tax revenues make it to the ground. At the rural Pinedale Elementary School, near the heart of the current gas drilling activity, teachers are paid the highest salaries in the state, and students have access to a new fleet of laptop computers and other state-of-the-art technology.
Wyoming has recently used oil and gas revenues to purchase wildlife habitat, endow professorships at its universities and colleges, and provide new assistance funds for entrepreneurs and local economic development projects. All of these investments will pay off when the gas fields have played out.
Beyond how the money is used is the question of whether the states hosting the boom are getting enough. Many countries tax oil and gas revenues at a much higher rate than the United States; even some industry leaders say they expect to be asked for more than they are currently giving.
With many Western states facing budget shortfalls and crumbling schools and roads, now is not the time to be meek about insisting that industry pay its way. Economist Juan Carlos Boue of London points out that California could solve its budget crisis "with the stroke of a pen" if it had the will to implement a severance tax on the oil and gas industry.
Prosperous states are much more likely — and much better able — to protect the environment than are poor ones. Our land, our air and our water are taking a huge hit from the oil and gas hyperphagia. We need to act to ensure that the West will have the resources to restore the landscape when the boom is over. And we need to plan for a future economy beyond the petroleum age.
Bears don’t instantly burn all the calories they gorge on in the fall. Instead, they store them for future use, to get through winter’s hibernation. Contrary to what all the experts say, fat isn’t always a bad thing.