Monthly Archives: February 2017

To Frack or Not to Frack?

By Barry Rascovar

Feb. 27, 2016–With apologies to W. Shakespeare, the continuing battle over gas exploration in Maryland’s far-western Garrett County reads like this:

“To frack or not to frack, that is the question.

“Whether ‘tis nobler in the mind to suffer environmentalists’ slings and arrows of an outrageous drilling ban or take arms against a sea of troubles and, by opposing them, let the state moratorium lapse, crack open Marcellus shale and unleash the fortunes flowing from natural gas.”

It’s a furious dispute which has dragged on for years.

Environmentalists view hydraulic fracturing of black Marcellus shale in mountainous Garrett County as pure evil sure to pollute drinking water, pristine streams, the health of citizens and lay waste to 100,000 acres in the state’s most remote county.

Proponents say that’s buncombe. Done safely and with plenty of state oversight, “fracking” as it is called can be accomplished – and is accomplished all over the country – without damning side effects.

(Fracking has been used in well production since 1950, but didn’t become the superstar of oil drilling until this century, thanks to recent advances in petro-geology, fluid dynamics, engineering, computing, horizontal drilling and 3D seismic imaging.)

Cracking Open Shale

Today, one-half of all U.S. crude oil production and two-thirds of all natural gas production comes from wells that employ fracking – sending a mix of high-pressure water, sand and chemicals through underground pipes drilled horizontally that cracks open ancient layers of shale, thus releasing previously unreachable pools of petroleum liquids.

Yet in Maryland, the “shale revolution” hasn’t happened.

Under intense pressure from a core Democratic voting group – environmentalists – Gov. Martin O’Malley declared a moratorium in 2011 while a scientific study was undertaken.

Much to the activists’ dismay, the panel concluded fracking could be done safely if the state imposed strong regulations. This led O’Malley to promulgate tough, restrictive rules for fracking in 2014.

Unsatisfied, anti-frackers got the legislature to approve another two-year moratorium in 2015. Gov. Larry Hogan refused to sign the bill but didn’t stop it from becoming law.

That led to new state regulations now awaiting approval by a joint legislative panel. Meanwhile, the moratorium runs out in October.

Push for Complete Ban

Environmentalists are determined to push through a permanent fracking ban in Maryland this legislative session. Whether there would be enough votes to overturn a likely Hogan veto remains in question.

Forgotten in this bitter back-and-forth are the land owners of isolated Garrett County who sorely need the financial boost that could come through drilling on their lands.

Farming communities in Pennsylvania and West Virginia have reaped huge lease and royalty payments from oil companies who hit pay dirt in those two states.

In fact, Pennsylvania now ranks No. 1 in shale gas production (ahead of Texas) and West Virginia ranks No. 3. They are the prime beneficiaries of the massive amounts of Marcellus shale under land in that part of the country.

But petroleum firms no longer show interest in Maryland.

Deterrents to Fracking

First there’s the regulatory and legislative uncertainty. No company wants to risk tens of millions of dollars in a state where the door could be slammed shut at any time.

Second, there’s the extremely low price of natural gas, a trend that shows no signs of abating, possibly for decades.

Third, there’s the small amount of reachable petroleum liquids in the Marcellus shale beneath Garrett County and a portion of neighboring Alleghany County. The numbers just don’t add up for oil companies.

Tapping into shale formations with new technologies revolutionized this nation’s energy situation. Fracked wells tripled in just five years. Drilling has been most intense in North Dakota, Montana, Texas, Pennsylvania and West Virginia.

But this fracking phenomenon also has driven down the price of natural gas to such low levels that exploration in questionable regions like Maryland is uneconomic.

A law permanently banning fracking in Maryland would foreclose any chance of Garrett landowners ever benefiting from higher natural gas prices and breakthroughs in drilling technologies that might make hydraulic fracturing safe and secure.

Events beyond the state’s control already have determined that fracking won’t happen in Maryland any time soon. That plus Hogan’s new regulations – said to be the toughest in the country – appear to provide assurance that environmentalists’ worst nightmares won’t come true.

That should have ended this rancorous discussion but it hasn’t. Environmentalists want a grand-slam home run that purges even the thought of fracking ever occurring in Maryland.

But forever is an awfully long time, a fact that may dissuade enough lawmakers from turning their backs totally on Garrett County land owners.

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Giving Frosh His Independence

 

By Barry Rascovar

Feb. 20, 2017—You can’t blame Gov. Larry Hogan, Jr., for getting irritated over the Maryland attorney general’s new authority – granted by the General Assembly – to sue the federal government without the governor’s permission.

This strips Hogan of a smidgen of his enormous powers. Yet if the Republican chief executive truly wished to stop this slight weakening of his powers all he had to do was pick up the phone and negotiate a compromise.

Instead, Hogan gave Attorney General Brian Frosh, one of the mildest mannered men in politics, the cold shoulder when Frosh requested the go-ahead to object in court to President Trump’s temporary ban on refugees and immigrants from seven Muslim nations.

Giving Frosh His Independence

Maryland Attorney General Brian Frosh

Hogan called the delegation of power to Frosh “crazy” and “horrible” – but the real nuttiness lies in Hogan’s refusal to talk through his objections with Frosh and come to a reasonable arrangement each could live with.

Political Divide

Sure, Hogan is a conservative Republican to the core and Frosh is a down-the-line Montgomery County liberal Democrat.

Still, Frosh almost never picks a fight. His 20 years in the legislature were marked by quiet persuasion based on facts, open dialogue and finding middle ground.

Only when Frosh asked for permission to sue, provided back-up documentation to the governor and was met by silence did he opt to make an un-Frosh-like aggressive move.

Democrats in the House and Senate were happy to help him, since they were alarmed by Trump’s executive order against Muslim refugees and immigrants.

Numerous state attorneys general sued to stop the president’s executive order and temporarily succeeded in blocking it. Frosh wanted authorization from Hogan to do the same thing.

He said he was concerned by clear indications the new administration will wipe out the Affordable Care Act that gives health insurance to 430,000 Marylanders and anti-environmental steps that could damage the health of the Chesapeake Bay. He wanted the tools to speak out on Maryland’s behalf in court.

Weak A.G.

Maryland is one of a handful of states that didn’t –until last week – give its attorney general the independence to sue the federal government without getting an okay from the governor.

Indeed, this state has one of the weakest attorney general offices in the country. Only on rare occasions can Frosh’s office conduct a criminal investigation and try the case—the state’s constitution handed over those broad powers to the local state’s attorneys in 1851.

Maryland’s attorney general primarily staffs the law offices of state agencies, gives legal advice to the governor, General Assembly and judiciary, handles consumer protection issues, defends the state in court litigation and files lawsuits on behalf of state agencies.

Yet this is a statewide office just like the governor and state comptroller. All three are elected by Maryland voters every four years. Their authority is spelled out in the Maryland constitution. Yet Frosh’s office is unusually dependent on the governor for permission to act.

That’s never been a healthy situation.

Why create a constitutional law office without giving that office the freedom to carry out the full range of legal responsibilities normally handled by an attorney general in other states?

Why make the Maryland attorney general such a weak reed, unable to speak for the state on legal matters without first coming on bended knee to the governor for consent?

The current conflict over separation of powers never surfaced when Democrats occupied both offices. Usually the two elected officers were on the same political wave length and agreed on occasional litigation to protest federal actions.

Cover for Hogan

Under Hogan and at times under Republican Gov. Bob Ehrlich disagreements have surfaced. Yet this need not have reached a point of separation if Hogan had ordered his skilled legal counsel, Robert Scholz, to work out an accommodation.

Frosh may have been close to the truth when he suggested this new arrangement actually gives Hogan the best of both worlds – despite the governor’s public protests.

Hogan doesn’t want to go on record opposing the new Republican president. He’s trying hard to ignore anything and everything Trump says that provokes controversy.

Yet it’s no secret radicals in the new administration want to deep-six Obamacare and purge all sorts of environmental regulations that could set back efforts to clean up the Chesapeake Bay.

Someone has to speak out and protest in court at the appropriate time. Hogan doesn’t want to alienate his Republican core base, yet extreme actions in Washington may require pushback from Maryland to avert harm to citizens and the “Land of Pleasant Living.”

The new delegation of authority by the legislature to Frosh solves that dilemma quite neatly for Hogan. He can continue to ignore Trumpian broadsides and dangerous executive orders while Frosh, on his own volition, tries to block Trump’s moves in court.

The governor’s hands are clean. He hasn’t forsaken the Republican president.

(He also can try to dissuade Frosh through well-reasoned arguments. The power granted Frosh requires that he notify Hogan of the attorney general’s intention to sue, wait 10 days so the governor can put any concerns he has in writing, and then Frosh must “consider the Governor’s  objection before commencing the suit or action.”)

Re-election Battle?

The real danger for Hogan could lie in the next six to 12 months if Trump takes such extreme steps affecting Marylanders, the state’s social programs and its natural resources that Frosh becomes the hero of the day – filing lawsuits repeatedly to stop or reverse Trump’s moves.

Should Hogan continue to remain mum during that time, ignoring the human toll of Trump’s actions, it might hurt the governor’s re-election chances.

Thus, Brian Frosh might place himself at the head of the pack of candidates running for the Democratic nomination for governor.

Could Hogan then face off against the attorney general in November 2018 just as Frosh’s popularity in vote-heavy Central Maryland soars due to his role as Maryland’s defender against heavy-handed actions from Washington?

It’s not far-fetched.

That possibility gains credence with Frosh’s request for a future annual budget of $1 million to create a five-person legal staff to sue the Trump administration when the public interest or welfare of Maryland citizens is threatened – be it their health, public safety, civil liberties, economic security, environment, natural resources or travel restrictions.

If Hogan, for political reasons, won’t oppose Trump and radicals in the administration, Frosh is the logical person to fill that void.

Giving him the power to act isn’t wild and crazy. It’s in line with the way things work in most other states. It ensures that Maryland’s interests will be defended by at least one statewide, constitutional officer elected by the people.

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Avoiding MD’s Pension Reality

By Barry Rascovar

Feb. 14, 2017 – Let’s be honest: No one wants to face up to Maryland’s giant $19 billion long-term shortfall in its retirement program for state workers and teachers. Not the Republican governor nor the Democratic legislature.

True to his Lone Ranger approach, Gov. Larry Hogan is calling for a dramatic change – an optional 401(k)-style retirement program for new state employees.

It sounds good but falls apart when examined close up.Avoiding MD's Pension Reality

The best that can be said about this plan is that it saves both the state and new workers upfront money. Unfortunately, it could leave tens of thousands of state workers far worse off in their retirement years.

Hogan didn’t bother consulting with legislative leaders, pension agency officials or the employee unions to get their input and cooperation. Thus, the governor’s plan has zero chance of passing.

But it goes over well on TV and radio. It allows Hogan to brag that he tried to fix Maryland’s pension problem – though he really didn’t.

Flawed Retirement Approach

Hogan’s plan would weaken the current retirement program by encouraging new workers to leave the system and instead sign up for his 401(k) savings plan. This could mean the loss of a huge sum of regular contributions to the existing pension system. The retirement system’s shortfall would grow, not shrink.

As for workers opting for this “defined contribution” program, 5 percent of their paychecks would go into their IRA account, matched equally by the state. (State workers today contribute 7 percent of their salaries into the pension fund.)

Workers then could invest all that retirement money into the stock market or other financial instruments.

That’s where the risk soars.

In bad economic times, state workers could lose much of their retirement nest egg if they’re not careful. Worse, they’d no longer be eligible to receive a regular state pension. They could find themselves leading a hard-scrabble life in retirement.

The notion of providing state workers with optional ways of saving for their “golden years” makes sense. But not if it means entirely eliminating that pension check.

Existing 401(k) Option

There’s no reason to embrace Hogan’s plan because the state already offers supplemental retirement programs that do much the same thing: a 401(k) investment option and tax-deferred annuity and investment plans. Workers can defer up to $18,000 in salary annually.

The only catch is that the state does not offer a matching payment, as nearly all private-sector businesses with 401(k) plans do. A healthy state match could go a long way toward encouraging workers to save a lot more for retirement.

Perhaps the best way to go is a hybrid system combining a smaller, defined pension benefit with a 401(k) savings component that includes a generous state match. That would put most state retirees in a much stronger position after they leave work. It also could ease the state’s retirement-fund shortfall over the long run.

The catch: It would cost Hogan & Co. a lot more money each year to get such a program started, money the governor doesn’t have in these uncertain economic times.

Besides, Hogan isn’t about to pour more money into worker pensions if he can avoid it.  In fact in his new budget he eliminated a mandated $50 million supplemental contribution to the retirement program created to help bring down the shortfall.

That move deepens Maryland’s pension predicament.

There’s no incentive for Democratic lawmakers to support Hogan’s poorly thought-through bill, either. They’d just as soon let the pension problems slide, hoping against hope for a return of strong economic growth, which could mean high investment returns for the retirement agency.

Thus, the governor’s bill will get a polite hearing – followed by a dignified burial.

Then Hogan can denounce Democrats for failing to “save” the state retirement program. He’ll score political points while kicking the true pension-funding dilemma into the future.

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Hogan and the Elephant in the Room

By Barry Rascovar

Feb. 6, 2017 – If a Martian had landed in Annapolis last week and watched Gov. Larry Hogan’s State of the State address, he/she would have thought: “Wow, what a nice guy. What a perfect blend of bipartisanship and leadership. He’s my kind of governor.”

Indeed, that’s the image Hogan wants to project to the voting public – nice guy, good ideas, wants to cast politics aside and work with his foes to get things done.

Except the reality, rather than the distorted image, is quite different.

Hogan acts the role of bipartisan governor quite well for the cameras. Behind the scenes, though, he’s unwilling to open the door to Democrats and quick to play the blame game. He sharply mocks his political critics.

During his two years in office, Hogan rarely has worked cooperatively with Democrats. Instead, he lays down a take-it-or-leave plan of action – and he did last week – and refuses to negotiate a middle ground.

Back-Patting

You can chalk up his most recent State of the State speech to political hype and self-congratulatory back-patting. If there’s anything wrong happening in Maryland, it’s not his fault but those self-absorbed Democrats. Nary a negative word was sounded by Hogan – until he took some swipes at Democrats.

Hogan and the elephant in the Room

Gov. Larry Hogan delivers State of the State Address in House of Delegates Chamber

There’s no surprise here. Hogan wants to put a politicized, glossy filter on the Maryland scene.

What did come as a surprise was Hogan’s complete avoidance of the proverbial elephant in the room – widespread fear and trembling as a radical populist takes charge of the U.S. government just 32 miles away.

Hogan’s high popularity numbers stem in part from his careful “I’m not involved” approach to hot-button societal controversies. That now includes anything and everything happening in Trumpland.

Yet how can the governor ignore the dire situation Maryland could face later this year once President Trump and determined tea party Republicans in Congress demolish the Affordable Care Act providing health insurance for 430,000 Marylanders?

He said not a word about the ACA’s demise and what, if anything, he will do to avert a health-care crisis in the Free State. Hogan remains mum.

Cuts Coming from Washington

Similarly, Hogan ignored the clear and present danger to Maryland posed by vast federal budget cuts Trump and congressional Republicans have promised. Such massive reductions will reverberate throughout Central Maryland, costing possibly tens of thousands federal jobs.

The implications for Marylanders and Hogan’s budget are immense. That should have been a priority item in Hogan’s address to the legislature. Instead, he remained silent.

Once again, Hogan proved himself anything but a pro-active governor. He’s almost completely reactive, and only after factoring in popularity numbers and his reelection campaign effort.

Hogan gave no indication he is making plans to cope with what appears to be a whirlwind of destructive actions in Washington that could bring Maryland to its knees.

Maryland and Virginia are the states most at risk from Draconian budget moves by Trump and Congress. Federal employees constitute 8 percent of Maryland’s workforce.

Sweeping personnel and spending reductions will affect all of the Maryland economy. Yet we’ve heard not one word about this from Hogan.

No More Balanced Budget?

Trump’s anti-immigrant executive order is causing confusion, fear and uncertainty at Maryland colleges and universities and within immigrant communities.  It could create massive disruptions at research and education centers at College Park, the University of Maryland Medical Center and Johns Hopkins – both the university campus and the sprawling East Baltimore medical complex.

For state government, Hogan’s balanced budget could rapidly tumble into a deep deficit, requiring massive revisions this legislative session and special sessions later in the year to react to sharp federal funding cuts and job layoffs.

Hogan could have no choice but to make highly unpopular cutbacks, a move that won’t help his reelection chances.

It would have helped if the governor had reassured lawmakers and the public that he and his staff are hard at work developing alternative plans and creative approaches to help Marylanders who might lose health insurance or their federal jobs en masse.

Instead, Hogan pretends the threat from Washington doesn’t exist.

That’s not leadership; that’s pretending the problem doesn’t exist. His speech lacked transparency and honesty. Hogan gave listeners political Pablum.

Dark, threatening storm clouds are on the horizon, heading toward the Annapolis State House from the southwest.

Yet Hogan keeps telling us it’s a sunny day and everything is copasetic.

Maybe it’s time for the governor to adopt the Boy Scout motto, “Be Prepared,” and get the state and its people ready for what could be a tumultuous and unsettling time.

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