Where will the pipe run?
A Texas energy company wants to run an oil pipeline from North Dakota to Illinois with Storm Lake right along the route. So we emailed and called Energy Transfer Partners to determine what the precise route is. Will it go near the lake or the city? Or will it be several miles from town? The company claims it has notified all land owners along the proposed route. But representatives have yet to tell us, at least, where the pipe will go. We do not understand why.
Or maybe we do understand. Maybe the company doesn’t really want anyone to get a firm handle on where the pipeline will run.
This is not just any pipe. It will be filled with fracked oil from North Dakota called Bakken Crude, which is especially volatile until it is refined. The oil is shipped by rail across Iowa, which is probably more dangerous than shipping it by pipeline.
Eventually the company must satisfy the Iowa Department of Natural Resources that all environmental rules are met. That should be a breeze, since our regulations are so loose. The project also must be approved by the Iowa Utilities Board, which is supposed to be nonpartisan.
We assume that the state will be able to protect Iowa communities from preventable harm. Our skepticism will remain, however, until the company comes out of the closet and reveals where this pipeline will be sited. It should not be anywhere near the city or the lake. It should be fortified to guarantee that oil could not affect groundwater. If the project is safe, the company should have no hesitation in discussing these important points. We await their response.
A Kansas lesson for Iowa
An experiment in supply-side economics at the rural state level has failed. Kansas Gov. Sam Brownback and his Republican friends controlling the legislature cut income taxes by n25% and dropped the tax on non-wage income entirely. The result: A 12% drop in state revenue this year, causing tremendous problems for local school districts and a downgrade in its bond ratings from Moody’s.
This week 100 prominent Republicans, most of them ousted from public service by Tea Partiers in legislative primaries, signed on with their support for Brownback’s Democratic opponent, Paul Davis. The Cook Political Report now rates the gubernatorial race as a “toss-up.” The Kansas City Star reports Davis with a 6-point lead in the latest polling.
Kansas is similar to Iowa: Largely rural with no dominant city, relying on agriculture, meatpacking and manufacturing.
The main difference is that Democrats control the Senate, keeping Republicans from shooting themselves in the head by accident.
And, Gov. Terry Branstad is no radical like Brownback. He is conservative when he needs to be. He likes to eviscerate environmental funding, makes sounds about killing public employee unions, and has a penchant for handing money to foreign corporations in the name of economic development. Branstad keeps the base under control with these sleights of hand but has left the tax code alone for several years.
Branstad knows that revenue problems did in former Gov. Chet Culver, once schools started to lay off teachers.
Over the past year, Iowa’s revenue has been stable. All tax streams but for sin taxes (gambling, liquor and tobacco) and real estate transfers increased over the past year, according to the Iowa Department of Revenue.
Iowa’s treasury is solid, its schools are doing well and its economy continues to grow.
Kansas, by contrast, is shrinking in terms of its economy and its public services.
Brownback wanted to compete with the likes of Texas, with no personal income tax. The governor failed to appreciate that Texas has oil and Kansas does not. It also has Dallas, Houston and San Antonio. Missouri got Kansas City. Kansas got Wichita.
No doubt Branstad has been watching. He has had his own intramural battles with the libertarian wing of the party and recently purged them from party leadership. Hence his travels down a much different path than Brownback.
Branstad maintains. Let Iowa chug along. He knows which fights to pick with Senate Majority Leader Mike Gronstal, who probably is smarter than any Democrat in Kansas or Iowa. Kansas tried radical means to achieve income growth and got the opposite. Iowa takes the middle road and is doing quite well. We should aim to keep it that way. The evidence is in.