**This article was coauthored by Chris Prandoni, Forbes contributor and Director of Energy & Environmental Policy at Americans for Tax Reform**
North Carolina is already a hub for key industries such as finance, tech, health care, and medicine. Now, as the state is poised to begin taking part in the energy boom that has been an economic boon to a number of gas-rich states across the country, drilling opponents are using a series of government field hearings to voice their opposition to natural gas extraction facilitated by hydraulic fracturing.
The hearings, which convened in Raleigh on August 20 and run through September 12 are intended to address specific concerns over proposed hydraulic fracturing regulations pending before the state’s Mining and Energy Commission. However, these forums are instead being used as a venue for anti-fracking protestors to disrupt proceedings and express their opposition to the use of the North Carolina’s natural gas reserves.
The first hearing in Raleigh on August 20, which attracted over 500 people, turned into a spectacle. “Fracking foes booed, jeered, hissed, chanted, snickered, sang – and one even wept,” reported the Raleigh News & Observer. “They cited Winston Churchill, Buddha, Murphy’s Law and ‘The Lorax.’” Meanwhile, members of the public who voiced their support for in-state energy exploration were “greeted with hisses, laughter and booing from the audience.”
North Carolina state lawmakers would be wise to ignore the vocal minority disrupting these hearings as they move to end the state's fracking moratorium. While exploratory drilling will be required to determine how much natural gas the state is sitting on, to see the potential economic impact one need only look to the experience of a state several hundred miles to the north – Pennsylvania.
Most of the natural gas-laden Marcellus Shale formation is located below Pennsylvania and the state has realized significant economic benefits in recent years thanks to the use of these resources, which have become economically viable thanks to hydraulic fracturing. According to Bureau of Labor Statistics data, from 2007 to 2012, while overall employment in Pennsylvania dropped by 1.3 percent, the oil and natural gas industry added over 15,000 jobs in the Keystone State, representing a more than 250 percent increase in industry employment. During that same five year period from 2007 to 2012, average annual wages in Pennsylvania increased by 11.9 percent ($5,158). Meanwhile, in the oil and gas industry, wages rose by a whopping 36.3 percent ($22,104).
Energy development can also grease the skids for tax relief. Last year North Carolina legislators and Gov. Pat McCrory (R) enacted one of the boldest and most pro-growth state tax code overhauls the country has seen in decades, significantly reducing personal and corporate income tax rates. Following the passage of that historic plan, legislative leadership has expressed plans to come back in subsequent years and continue bringing the income tax rate down toward zero.
North Carolina Senate President Phil Berger, named an Outside the Beltway emerging star by the Washington Post, has made clear that the goal is to ultimately get the income tax rate down to zero. "What we would do is move North Carolina more in the direction of Texas as a low tax state, a high job creation state and away from what we are now," said Berger.
If the goal for North Carolina lawmakers is to eventually do away with the state income tax all together, full use of the state’s natural gas resources will lead to further relief for taxpayers. In Pennsylvania, companies engaged in and related to natural gas drilling have added $1.6 billion in taxes to state coffers since 2006. In North Carolina, the additional tax revenue generated by increased energy production could relieve state legislators of pressure to pay for all further income tax reductions with spending cuts and tax base broadening alone.
The debate about how and where to frack is not one that is unique to North Carolina. For the better part of this year, a number of organizations and sitting member of Congress Jared Polis (D-Colo.) worked to put anti-fracking measures on Colorado’s November ballot. Arbitrarily prohibiting fracking from occurring in certain parts of the state and upending the state-local government relationship, these ballot initiatives would have severely inhibited oil and natural gas development in the state.
Rep. Polis, one of the wealthiest members of congress, even went so far as to spend millions of his own money promoting the anti-fracking ballot measures. Industry fought back similarly, spending large amounts of money defending itself. Just as both sides were gearing up for November’s showdown, Colorado’s Democrat Governor John Hickenlooper convinced anti-fracking interests to pull the plug on their ballot initiatives. Why? Gov. Hickenlooper was concerned that the anti-fracking measure was such a powerful one for Colorado voters that it would increase turnout and harm Democrats running in this non-presidential election cycle. Even voters in blue to purplish Colorado recognize the safety and economic benefits of hydraulic fracturing.
Colorado’s fracking fight that never happened should be instructive to North Carolina’s fracking opponents – push too hard and risk being marginalized. It’s important that North Carolina set proper standards for drilling, and state officials should be commended for taking an approach that ensures such and has involved the public. But state officials would be wise to disregard outbursts from an opposition that simply wants to prevent the safe and sustainable utilization of state resources. If those that seek to silence debate had their way, it would cause North Carolina to forgo jobs, economic growth, and greater prosperity. May cooler heads prevail in the Tar Heel State.
Patrick Gleason is Director of State Affairs at Americans for Tax Reform (ATR) and a Senior Fellow at the Nashville-based Beacon Center of Tennessee. Chris Prandoni is ATR’s Director of Energy & Environmental Policy.
