by David Krikorian
Ohio’s “official” unemployment rate is 9%, with one out of every seven citizens of the state currently receiving food stamp assistance. The overall health of Ohio’s economy, like that of the Nation, is sliding from bad to worse. Despite massive federal monetary and fiscal stimulus programs we find ourselves mired in the toughest economic environment since the Great Depression. As the country awaits the next “jobs plan” from Washington, which will get bottled up in party politics, Ohioans must take action now to build a better future with a strong foundation of low unemployment and a cleaner environment.
Sitting on a Mountain of Jobs
Much of eastern Ohio sits on top of a huge natural energy resource known as the Marcellus shale formation. This geological bonanza contains enough natural gas reserves to power our state for several decades. New supply from emerging shale gas locations around the country will keep prices low for years into the future.
Ohio currently generates nearly two-thirds of its electric power from a network of coal-fired power plants around the state. These plants produce tremendous amounts of toxic emissions greatly affecting the quality of life of many Ohioans. New Environmental Protection Agency regulations, designed to reduce power plant emissions, are scheduled to take effect in the near future. Politicians in Washington have criticized the new EPA health regulations as “job killers” while power utility companies have warned they will result in higher electric rates. Some plant operators like Duke Energy, have decided to shut older coal plants when the new regulations come into effect rather than spend the money to upgrade existing plants with costly pollution control equipment. Electric rates will increase over time if more plants are closed.
Nobody wins in this scenario. Instead of fighting EPA regulations, which are designed for the benefit of our children along with the rest of the breathing public, we should use this opportunity to invest in our energy infrastructure by switching to natural gas for majority of Ohio’s electric power generation needs.
Instead of burning coal, which creates all sorts of toxic waste including mercury, arsenic and a host of other emissions with major public health ramifications, we should instead be burning natural gas, which contains comparatively little in the way of harmful emissions when compared to coal.
Ohio should develop a plan to convert or replace all statewide coal-fired plants with combined cycle gas turbine power plants over the next 7 years. Tens of thousands of Ohioans would be put to work on this strategic initiative almost overnight. The list of jobs that would be created to support this plan is too long to detail however, a statewide infrastructure project of this size and scope would employ engineers, planners, developers, contractors of all shapes and sizes, construction workers, metal fabricators, iron workers, pipe fitters, truck drivers, drillers, pipeline workers, you name it. Manufacturing firms including General Electric would see major orders for new turbine equipment and machinery.
Historically coal has been a cheaper form of energy than natural gas however with the massive new supply of shale gas coming to market over the past few years natural gas, currently around $4 per British Thermal Unit, is competitive with coal without the environmental costs. A natural gas power plant on average will produce nearly half the carbon dioxide, one quarter the nitrogen oxide and almost no sulfur dioxide or mercury compared to a coal plant. Which means converting to natural gas will result in substantially lower incidence childhood asthma and bronchitis along with other upper-respiratory illnesses. Ohio’s three largest cities would experience significantly less smog making them more livable.
Any comparison of coal versus natural gas must consider the long-term health benefits of switching to natural gas. Environmental groups contend the pollution from the Duke plant scheduled for closure in New Richmond, Ohio has caused hundreds of heart attacks and deaths and thousands of asthma attacks. Who pays for the health care costs associated with these illnesses? Society does!
There are serious environmental issues with extracting and transporting natural gas. The Public Utility Commission of Ohio and Ohio EPA should make and enforce regulations on shale drilling with an emphasis on public safety and water quality. This natural gas energy plan will help Ohio bridge the gap between today and a future powered 100% from renewable energy. Solar, wind, algae and bio-genetics offer promising long-term, large-scale opportunities, which the American spirit will harness over the coming decades. Today however, we must address our environment and energy infrastructure.
Ohio Infrastructure Bank
The state of Ohio has access to vast quantities of natural gas through state owned forests in eastern Ohio. The gas buried deep under some of that forest would be used to help pay the cost of converting or building natural gas power stations in a public-private partnership.
Instead of financing the project with public debt, the State of Ohio through the state legislature should establish a state owned Infrastructure Bank, which would create the money to fund this and other infrastructure projects. I will explain in detail how an Infrastructure Bank would operate in a future paper however I am simplifying the idea a bit for this discussion – A portion of state financial assets would be moved to the Infrastructure Bank which would then use fractional reserve lending to fund Ohio’s natural gas energy infrastructure plan. As a state owned entity, the Infrastructure Bank would create the money for the project without debt or interest charged to Ohio taxpayers.
North Dakota through its state owned Bank of North Dakota has been doing something like this for the past 90 years at great benefit to its citizens. For comparison sake, North Dakota’s unemployment rate is 3.3%. The Minnesota state legislature is also considering a state infrastructure bank to work in a similar fashion as I have described. The Ohio legislature should create a state Infrastructure Bank to fund the natural gas power program and other strategic projects including bridges and roads.
Otto von Bismarck, namesake of the capital city of North Dakota, famously said, “politics is the art of the possible”. This natural gas energy plan is not only possible; it is entirely doable if we have the civic and business leadership to put Ohio back to work modernizing and upgrading our energy infrastructure and ensuring a cleaner environment for future generations of Ohioans in the process.