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More lessons for Ohio’s energy boom from West Vriginia: Coal’s regulatory capture in West Virginia

About a year ago, I wrote about the time I spent in the heart of West Virginia coal country, reflecting on the consequences of the state’s energy boom-and-bust cycle and the failure to invest and prepare for a future without coal.  The post, “Lessons for Ohio’s Energy Boom from West Virginia Coal Country,” can be accessed here.  In that post, I concluded:

There are lessons for Ohio.  We are in the beginnings of a multi-decade energy boom with our shale gas resources.  The wealth derived from the resource will be worth tens of billions of dollars.  Notably, this resource is located in the parts of the state most underdeveloped.  And while the consequences of an eventual energy bust in the region would differ significantly from the experience in places like Mullens, Ohio has an incredible opportunity to avoid an energy bust and instead use part of the shale gas wealth to invest in the long-term prosperity in the region.  In many ways, I believe that achieving this balance—and acknowledging the interconnectedness of Energy, Environment, Equity, and Enterprise—will be the one of the great leadership challenges in Ohio over the next decade.

Recent events in West Virginia continue to continue to offer lessons for Ohio as we become a leading energy0producing state.   The January 2014 chemical spills  in Charleston, West Virginia, and the lack of preventative oversight and the uncoordinated government response specific to that event, offers sobering lessons.  But perhaps more important than that specific incident – and more startling – is the larger story of the regulatory capture of West Virginia’s state government by the coal industry, which created a landscape of corruption that ultimately enables events like the chemical spills to occur.

A recent article in the New Yorker, “Chemical Valley,” by Evan Osnos, available here, is perhaps the best piece investigative journalism I’ve come across this year.  The article examines West Virgina’s transformation as the a standard-bearer for pro-business, limited-government conservatism, and the nearly complete breakdown of the state’s oversight capabilities.  Although I’m not not new to stories of regulatory capture, the level of structural corruption highlighted  in the article was shocking, and throughout reading it, I had to remind myself that I was reading about our neighboring state, and not some banana republic.  But then again, a banana republic is perhaps the most honest way to describe the state of West Virginia.

The regulatory capture in West Virginia took decades, while in Ohio, we’re only at the beginning of the shale play.  However, Ohio’s rapidly growing oil and gas industry is also quickly becoming an active and influential force in state government (SeeFracking Money is Playing Big in Ohio Politics,” and “Oil, gas lobby shell out big money to defeat Ohio tax“).  We should heed the lessons from West Virginia and be diligent against similar regulatory capture in Ohio.


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