What if?

The descendants of the Vikings figured out a thing or two.

Not so long ago, I, along with lots of good folks and a very impressive coalition,  spent a good bit of time and effort trying to get the state of West Virginia to pass legislation creating a Future Fund. This would have involved setting aside a portion of state severance tax revenue, allowing it to build, and using the interest as a permanent source of wealth for the state.

The bill passed in 2014. Ish. Unfortunately, it was sabotaged in the House of Delegates (at a time when Democrats held the majority in both houses) and basically made unworkable for the foreseeable future. Since there, there's been a political earthquake or three and a big dip in coal production and gas prices.

I'm still hopeful that the Future Fund can be made workable at some point. And I can't help thinking about how different West Virginia would have been today if one had been set up years ago.

Case in point: Norway. When that country experienced an oil boom, those socialistic Vikings were smart enough to set aside a portion of their revenue for pensions and public expenses. Apparently they were smart enough to figure out that this stuff you take out of the ground doesn't grow back (at least for several million years).

Today, that fund is worth $1 trillion. Yes, that would be the number with 12 zeros. It's worth about $190,000 for each resident of Norway.

I know there's no way WV's version would  have been anywhere near that even if we started decades ago. But we would have been in better shape than we are now.

Turkeys on vacation

Turkeys like to hang out poolside, just like some humans.

MUST READ. Natural wealth can be a social and economic curse unless positive steps are taken.

Not much room in the inn

I am by no means the brightest crayon in the box--and if I ever come close to forgetting that, the Spousal Unit is usually right there to remind me. Another case in point occurred on an otherwise glorious road trip from one corner of WV to another to try to drum up support for creating a Future Fund for our state from taxes on natural resources.

The first stop on the journey was to the beautiful and blessed counties in the southeast, Greenbrier and Summers. Then back through Charleston, up through Parkersburg and along the mighty Ohio River to New Martinsville in Wetzel County.

I didn't bother to try to reserve a room, considering it to be a truth universally acknowledged that aside from graduation, homecoming, major football games and other high holy days of obligation, there is never a need to reserve a room in advance in any West Virginia town.

Fool that I was. I had forgotten that Wetzel County is ground zero for Marcellus Shale natural gas drilling. As in Fracks-R-Us. I hit town around 9 at night and every motel I could find was full--and the parking lots were full of trucks with out of state plates.

One of the sore points of the Marcellus boom is that most of the drilling and pipeline jobs go to people from out of state, who incidentally need a place to stay. I saw plates from Oklahoma, Kansas, Michigan, Texas and pretty much anywhere but here.

(I was driving a rental with NY plates, so I don't have a whole lot of room to talk on that point).

It started to look like I'd either have to go up to Wheeling or down to Parkersburg to crash when I decided to try one last place and got the last room available.

The most interesting part was a conversation with the hostess. She said they were full most every night, at least from Sunday to Thursday, with gas workers from all over. I asked whether they were a rowdy bunch and she said no. Most days they are up and out by 5 or 6 and sometimes don't get back till after dark. By 9, she said, it was pretty quiet. Duly noted.

I spent the next day seeing what gasland really looks like. Short answer: not terribly pretty. I'll hold off till I can upload some pictures but here's the punchline: we've seen lots of coal, oil and gas booms and busts in this state. More busts then booms, no anatomical reference intended. We need to do something different this time around to ensure that WV profits more from its natural wealth in the 21st century than it did in the 20th.

An idea for the future

The WV Center on Budget and Policy has been making noise for a while now about how our state can position itself to benefit for the long haul from extractive industries by creating a permanent mineral tax trust fund.

The basic idea is pretty simple, although it could be done in many different ways: set aside a portion of severance taxes for the fund, allow it to build over time and use the interest to fund vital projects. Several states, mostly out west, have already done this and are reaping the benefits.

As a new report from the Center on the subject argues,

Without a permanent fund, the economic benefit from the natural resource extraction will decline along with the natural resources themselves.

A bill to do something like that has been introduced in the state senate, where it was sponsored by senate president Jeff Kessler. Here's hoping the bill makes it. Forward thinking like this is long overdue in West Virginia.

As I've said before in an op-ed for the Gazette, if WV had done something like this decades ago with coal, the southern part of the state might look like Shangri-la by now.