States that Rely Heavily on Fossil Fuel Extraction & Related Income Taxes

 

In poor states, like West Viginia (red) and New Mexico (blue), poverty is a way of life. Both states are near the bottom of the average earnings list and among those at the top of below the federal poverty level. Since public education is mostly financed at a local level – federal monies have faded over the year – that traditional “educational path” out of poverty is not remotely operational here. Public education in these states hovers well below the metrics of a national average. Poverty is self-perpetuating. But what these states have come to rely on has been fossil fuel extraction. W Va – coal (gasoline taxes average). NM – oil and gas (gasoline taxes low). As fossil fuels fall into disfavor, a necessity given climate change, jobs in that sector fall (even as alternative energy generation creates more jobs)… and tax revenues plumet.

Isolated communities are part of the problem. The schools in Appalachia, communities where educated elites are held in particular disdain, are notoriously bad, and those in the pueblos (First Peoples’ “reservations” in NM-speak) – which are not even part of the state educational coverage – even worse. Though rare, that one-room schoolhouse of yore is still with us. Teacher pay is awful, and lots of children struggle to find quality middle and high schools as they “advance.” Students from both states lack two fundamentals: resources and hope. Escape makes drugs and alcohol part of the culture. Add much of the Deep South to that metric, and even those run down, overcrowded schools in slummy northern cities look “good” by comparison.

Unlike most nations on earth that have public education, where a single unified national school district exists, the United States has approximately 13,000. And too many of those school districts are battling over “woke” agendas and teaching creationism, punishing teachers who dare to teach facts… preferring a path to censorship under the rubric of “parental rights.” Those states are now struggling to recruit and retain teachers. Funding education has long since been replaced by prioritizing tax cuts for the rich. Yet today, that rising boat still only floats yachts. Add the student loans teachers incurred in getting their degrees, and their financial hardship only multiplies.

Texas, a rich state by any measure, prides itself on having no state income tax. Oil and gas royalties are the main tax powerhouse. But even the powerful Big Oil lobby and the shuddering vestiges of coal states pushing that fuel source cannot change the downward vector of fossil fuels. Yet have states that have built their tax base on fossil fuels actually begun to seek alternative state governmental revenues? Mostly not. And even here in the Western United States, the dirtiest, most carbon-emitting fossil fuel is nowhere near facing near term extinction. Sammy Roth, writing for the May 27th Los Angeles Times, takes a look at coal’s status in the West:

“Over the last two decades, 21 coal-fired power plants have shut down across the Western U.S…. Twenty-one down, 32 to go… Those numbers are based on a Sierra Club tracker and an L.A. Times analysis. They show how much more work is needed to help California and the rest of the West phase out the dirtiest fossil fuel… They also shine a light on the important progress being made as climate activists pressure government officials to hold fossil fuel companies accountable for the harm done by their products — and as solar panels, wind turbines and batteries increasingly outcompete planet-warming coal, oil and gas on the market.

“The energy transition was boosted [in April] when the Biden administration finalized several rules limiting pollution from coal- and gas-fired power plants. The regulations won’t end the climate crisis. But they’ll certainly limit the pain… In the race to slash heat-trapping pollution, progress and pain usually go hand in hand… In 2022, coal supplied just over 15% of electricity on the power grid spanning most of the West. And even though there’s just one coal plant left in a West Coast state, several coastal cities — including Los Angeles — still buy power from coal generators…

“PacifiCorp, one of several utility giants controlled by the billionaire investor’s Berkshire Hathaway empire, is the majority owner of six Western coal plants, two in Utah and four in Wyoming. Buffett’s fleet serves customers of PacifiCorp subsidiaries Pacific Power and Rocky Mountain Power in California, Idaho, Oregon, Utah, Washington and Wyoming… The Sierra Club and other groups have done battle with the so-called Oracle of Omaha in state regulatory commissions for years. But despite some victories for environmentalists, PacifiCorp is still moving far too slowly to close its coal plants.

“[In April], the utility backtracked on a plan to shut down its Utah plants, Huntington and Hunter, by 2032, reverting to retirement dates of 2036 and 2042. PacifiCorp also intends to keep burning coal at its Dave Johnston, Jim Bridger and Wyodak plants in Wyoming through the late 2030s, although it says it will outfit Jim Bridger with climate-friendly ‘carbon capture’ technology (which has yet to be commercially proved). The company plans to ditch coal at Wyoming’s Naughton plant by 2026.

“PacifiCorp’s reticence to embrace clean energy is ironic given that just a few months ago, Buffett was bemoaning that it’s getting harder for Berkshire Hathaway to make money because wildfires are getting worse, exposing utilities to increasingly exorbitant damage claims when their power lines spark those fires… And why are fires getting worse? In great part because of climate change. In great part because of the coal, oil and gas that companies such as PacifiCorp are burning…

“Beyond Buffett’s fleet, there are nine more coal plants in Utah and Wyoming. Four of them — Neil Simpson II and Wygen I, II and III — are majority-owned by Black Hills Corp. and clustered at Wyoming’s Gillette Energy Complex… Black Hills serves electricity customers in Colorado, Montana, South Dakota and Wyoming. Outside Colorado, the company has faced little regulatory pressure to move away from coal. As such, it’s announced no firm timeline to close any of its plants…

“[In Utah,] First, the bad news: Deseret Power Electric Cooperative, which serves 45,000 customers in Utah and neighboring states, recently asked Utah officials for permission to install equipment to limit nitrogen oxide pollution from its coal-fired Bonanza plant… Less pollution may sound good… But the fact that Deseret Power might invest tens of millions of dollars in ‘selective catalytic reduction’ equipment means the co-op wants to keep the coal plant running ‘through at least 2041 or 2042,’ Deseret wrote. Without pollution controls, the co-op had previously expected to close Bonanza by 2030.” The good news is that major buyers of Utah energy – like the Los Angeles Department of Water and Power – are shifting their efforts towards sources of clean energy. But so many coal states’ tax support is still coal reliant. Yet money talks; it even screams.

The headline here is that the transitions we face, from climate change, artificial intelligence and employment practices, are still mired in the practices of old. Social Security is still funded based on the premise that there will always be more younger workers than retirees, a statistic that is clearly unsustainable. Remote work and artificial intelligence are reconfiguring everything from office space to the nature of future job growth. And climate change necessitates the necessary recalibration of taxes still hopelessly based on fossil fuel extraction (and taxes at the pump!) to support basic government services. The reluctance to change is hurting all of us.

I’m Peter Dekom, and that massive MAGA vector of going back to the way it was is obviously completely impossible!