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Do the tax payers get any money for these negative externalities? Or is this just going to be a handout to whichever private company has the right connections

Do the tax payers get any money for these negative externalities? Or is this just going to be a handout to whichever private company has the right connections with the right politicians? Is this mainly going to benefit those politicians and private companies? This isn't going to materially reduce gas prices for the average Ohio person to matter at all. State parks are a huge amenity...

barbazoo 3y ago
> Do the tax payers get any money for these negative externalities? At least they should get vouchers for drinking water once their groundwater is polluted
- balderdash 3y ago
  Just my two cents, but this stuff is like having an medical procedure, WHO is doing the procedure is probably the most important element (e.g. do they do things the right way). Also, I think regulators have been far too lax in the amount of environmental and P&A liability insurance/bonding that these companies are required to carry to support potential claims/cleanup etc. and those need to scale (along with regulations) exponentially the closer you are to population, drinking water, and food production.
alach11 3y ago
The government receives severance tax for oil and gas extracted (0), income tax from employees working in oil industry, and the government is paid for the leases and royalty interest for production on the leases they grant. (0) https://tax.ohio.gov/help-center/faqs/severance#:~:text=The%20severance%20tax%20is%20paid,the%20sale%20of%20natural%20resources https://tax.ohio.gov/help-center/faqs/severance#:~:text=The%....
- littlestymaar 3y ago
  The fact that your link returns a ”403: forbidden” error is a delicious irony.
  - orangepurple 3y ago
    Are you connecting from outside the US?
- vkou 3y ago
  > income tax from employees working in oil industry, Everyone pays income taxes. If the mob starts paying income taxes, is that a good reason to bring racketeering back? Why are they paying the same mineral rights fees for extracting from a protected state park, as they would from non-protected land? Is a park designation utterly meaningless in Ohio?
  - calamari4065 3y ago
    Strictly speaking, criminal gains are taxable and you are technically required to declare any illegal income on your taxes. As for racketeering, it never left. It's just a government institution now.
  - balderdash 3y ago
    But oil is not uniformly distributed, if it is a marginal decision (probably unlikely in this case) then those are jobs not needed, and taxes forgone, the logic is sound on truly marginal cases, but it’s probably some fraction of that that is truly marginal
- onlyrealcuzzo 3y ago
  $0.1 tax per barrel of oil for anyone interested. It's about a ~0.15% revenue tax at current oil prices. I would put this in the category of almost entirely benefiting whoever has the right connections to the right politicians - with a meaningless tax to make it appear otherwise.
  - alach11 3y ago
    The royalty interest is probably the largest take for the government in this case. Typically that would be between 15% and 20% of the gross revenue generated by the leases.
    - balderdash 3y ago
      25% is pretty common, I’ve seen 28%
  - JumpCrisscross 3y ago
    > It's about a ~0.15% revenue tax at current oil prices Out of curiosity, what is it on gross profit per barrel?
    - balderdash 3y ago
      I think lifting cost are like ~$15/bbl so at $60/bbl (ex royalties on $80)it’s about double, but still not much, but you have to factor in the capital costs / IRR math, and that’s where it has the bigger impact - but no one is really making a marginal decision based on this
- lowbloodsugar 3y ago
  Which is fucking insane, right? Imagine if I could walk into your house, take all your stuff, and pay you a "severance" tax of 0.125%.
  - balderdash 3y ago
    The royalty is like ~20%, the severance tax isn’t super meaningful here.
cwkoss 3y ago
Our politicians do not serve their citizens, they only serve their patrons
balderdash 3y ago
see below - not an advocate for this, but in most states these are fairly mature competitive bid processes. $115m upfront payment and 20% royalty get you in the ballpark what a deal might look like. https://www.cleveland.com/open/2023/04/texas-driller-offers-ohio-potential-of-nearly-2-billion-to-frack-salt-fork-state-park.html https://www.cleveland.com/open/2023/04/texas-driller-offers-...

barbazoo 3y ago

> Do the tax payers get any money for these negative externalities? At least they should get vouchers for drinking water once their groundwater is polluted

balderdash 3y ago
Just my two cents, but this stuff is like having an medical procedure, WHO is doing the procedure is probably the most important element (e.g. do they do things the right way). Also, I think regulators have been far too lax in the amount of environmental and P&A liability insurance/bonding that these companies are required to carry to support potential claims/cleanup etc. and those need to scale (along with regulations) exponentially the closer you are to population, drinking water, and food production.

alach11 3y ago

The government receives severance tax for oil and gas extracted (0), income tax from employees working in oil industry, and the government is paid for the leases and royalty interest for production on the leases they grant. (0) https://tax.ohio.gov/help-center/faqs/severance#:~:text=The%20severance%20tax%20is%20paid,the%20sale%20of%20natural%20resources https://tax.ohio.gov/help-center/faqs/severance#:~:text=The%....

littlestymaar 3y ago
The fact that your link returns a ”403: forbidden” error is a delicious irony.
- orangepurple 3y ago
  Are you connecting from outside the US?
vkou 3y ago
> income tax from employees working in oil industry, Everyone pays income taxes. If the mob starts paying income taxes, is that a good reason to bring racketeering back? Why are they paying the same mineral rights fees for extracting from a protected state park, as they would from non-protected land? Is a park designation utterly meaningless in Ohio?
- calamari4065 3y ago
  Strictly speaking, criminal gains are taxable and you are technically required to declare any illegal income on your taxes. As for racketeering, it never left. It's just a government institution now.
- balderdash 3y ago
  But oil is not uniformly distributed, if it is a marginal decision (probably unlikely in this case) then those are jobs not needed, and taxes forgone, the logic is sound on truly marginal cases, but it’s probably some fraction of that that is truly marginal
onlyrealcuzzo 3y ago
$0.1 tax per barrel of oil for anyone interested. It's about a ~0.15% revenue tax at current oil prices. I would put this in the category of almost entirely benefiting whoever has the right connections to the right politicians - with a meaningless tax to make it appear otherwise.
- alach11 3y ago
  The royalty interest is probably the largest take for the government in this case. Typically that would be between 15% and 20% of the gross revenue generated by the leases.
  - balderdash 3y ago
    25% is pretty common, I’ve seen 28%
- JumpCrisscross 3y ago
  > It's about a ~0.15% revenue tax at current oil prices Out of curiosity, what is it on gross profit per barrel?
  - balderdash 3y ago
    I think lifting cost are like ~$15/bbl so at $60/bbl (ex royalties on $80)it’s about double, but still not much, but you have to factor in the capital costs / IRR math, and that’s where it has the bigger impact - but no one is really making a marginal decision based on this
lowbloodsugar 3y ago
Which is fucking insane, right? Imagine if I could walk into your house, take all your stuff, and pay you a "severance" tax of 0.125%.
- balderdash 3y ago
  The royalty is like ~20%, the severance tax isn’t super meaningful here.

cwkoss 3y ago

Our politicians do not serve their citizens, they only serve their patrons

balderdash 3y ago

see below - not an advocate for this, but in most states these are fairly mature competitive bid processes. $115m upfront payment and 20% royalty get you in the ballpark what a deal might look like. https://www.cleveland.com/open/2023/04/texas-driller-offers-ohio-potential-of-nearly-2-billion-to-frack-salt-fork-state-park.html https://www.cleveland.com/open/2023/04/texas-driller-offers-...