Comment Re:Idle threats (Score 1) 182
So, while what you say is correct, you're missing the point entirely.
Another point that seems to be missing from the discussion is fracking. This isn't traditional oil drilling they're talking about. Fracking wells, unlike traditional wells, come with a very sharp drop in production after only a couple of years.
Chesapeake Energyâ(TM)s (CHK) Serenity 1-3H well near Oklahoma City came in as a gusher in 2009, pumping more than 1,200 barrels of oil a day and kicking off a rush to drill that extended into Kansas. Now the well produces less than 100 barrels a day, state records show. Serenityâ(TM)s swift decline sheds light on a dirty secret of the oil boom: It may not last. Shale wells start strong and fade fast, and producers are drilling at a breakneck pace to hold output steady. In the fields, this incessant need to drill is known as the Red Queen, after the character in Through the Looking-Glass who tells Alice, âoeIt takes all the running you can do, to keep in the same place.â
Low taxes on output for 4 years means the State has given up its opportunity to tax most of a fracking well's production.
This is a naked resource grab that will leave the land scarred and the frackers no where to be found once the oil disappears.
I assume you thought to reply to me because of the similarity between your scenario and the mistake GP made?
It really sounds like another instance of regulatory capture, in which the industry encourages or allows an idea to become enshrined into law that just so happens to benefit its bottom line. The fossil fuel industry is one that can bring to bear a nearly unlimited budget for things like lawyers, lobbyists, advertisers, etc. If they ignore or applaud a law, it's because it serves their interests. Otherwise you'd get a demonstration of the clout they wield. I mean, to anyone unfamiliar with this industry, "you keep the first few years' revenue, then you pay" sounds gracefully fair.