New Twists in Saga Over Fracking in Nevada

Well, this is interesting. Earlier this morning, CREDO Action dropped an email for a petition created by activist Christian Gerlach demanding a ban on fracking. Last December, plans were announced for fracking in Elko County. Since then, we've learned that Noble Energy wants fracking rights for 40,000 acres of publicly owned land in Elko County... As Nye County has also started to flirt with allowing fracking.

Keep in mind that this is what officials in Elko and Nye Counties are considering.



And because the fossil fuel industry secured fracking exemptions from federal environmental safeguards in 2005, companies have been allowed to get away with this wherever fracking has been allowed. Already, there have been horrifying reports of illness and toxic chemical contamination in Pennsylvania and North Dakota, two states that were early in jumping into the fracking rush. Since then, many communities throughout the country (and around the world) have been running in the other direction in adopting fracking bans.



Unfortunately for Christian Gerlach and CREDO, there's currently no fracking ban pending in the Nevada Legislature. However, Senator Tick Segerblom (D-Las Vegas) has proposed SB 390 to have the State of Nevada fill the regulatory gap left wide open by the federal government. It passed the Senate Natural Resources Committee with a friendly amendment, and now awaits action by the full Senate.

However, there's been another twist to this story. Early this month, NV Energy announced its NVision plan to swallow up a proposed update to Nevada's renewable energy standards invest in more home grown renewable energy while shutting down the last of its coal fired power plants. Yet hidden in depths of NVision was also a proposal for more natural gas power plants. NV Energy officials have not said yet whether they intend to rely on fracking to access the natural gas they seek for their proposed new power plants.

Last Friday, NV Energy seemed to get its way as SB 123 was stripped of its original soul and implanted with NVision. Yet since then, there's been a surprising backlash as several people and companies throughout Nevada have expressed concerns over NVision's cost to consumers. Even though R&R power player Pete Ernaut was able to secure his BFF Governor Brian Sandoval's (R-GML) support, he couldn't quell the growing protests from the state's biggest power players: the gaming industry. Earlier today, Las Vegas Sun reporter Anjeanette Damon went on KNPR's "State of Nevada" to explain the increasingly complicated politics surrounding NV Energy's big policy move.

At first glance, it seems like the fight over fracking is being lost in the shuffle of the new brawl over SB 123. That probably couldn't be further from the truth. NV Energy has the chance to come out and say it's not pursuing fracking. NV Energy can simply say it won't try to trade in one major health hazard (in the Reid-Gardner coal plant) for another (in natural gas fracking).

But because it's not (yet?) done that, this just adds to the many concerns over SB 123-turned-NVision. Will it truly be a chance for Nevada to declare independence from fossil fuels? Or is this just a backdoor attempt to pursue even more fossil fuels... And do so in a way that risks the health of many in this state?

Until these questions are answered, legislators should pause and review what's actually in SB 123-turned-NVision. And they should keep asking these questions. And they should at least pass SB 390 as more information is unearthed on fracking.

Perhaps this isn't what CREDO had in mind when sending out the email for Christian Gerlach's fracking ban petition, but it may very well add fuel to the fire of the latest controversy to turn the Nevada Legislature upside down.

Clear NVision?

Last Friday, it looked like NV Energy essentially got its way as SB 123 was gutted and amended into NV Energy's own NVision plan. SB 123 had been a bill improving Nevada's renewable energy standards. But now, it's possessed by NV Energy's NVision.

Last Friday, it looked like NV Energy essentially got its way as the Senate Commerce, Labor, and Energy Committee unanimously agreed to sacrifice SB 123, allow it to be possessed by NVision, and send this radically altered bill to the Senate Finance Committee. However, Anjeanette Damon and Andrew Doughman are now reporting that the newly possessed SB 123 is facing challenges. And those challenges are coming from other powerful sources.

The gaming industry, the largest energy user in Southern Nevada and a powerful lobbying interest, has expressed serious concerns with the utility’s banner proposal, and Gov. Brian Sandoval’s chief policy adviser and legal counsel resigned in the wake of the governor’s decision to side with NV Energy on the issue.

Less than two weeks ago, the investor-owned utility unveiled a major new initiative to divest from coal-fired power generation and build new natural gas and renewable energy power plants. But NV Energy’s bill also asks the Legislature to lock in a 10-year plan that would require ratepayers to shoulder the costs of the plan and limit the Public Utilities Commission’s ability to oversee any associated rate hikes.

In a final, frenzied push Friday morning to move the bill through a critical committee deadline, NV Energy’s lobbyists met with Sandoval’s staff and major energy stakeholders, including gaming companies and renewable energy representatives.

Christening the proposal “NVision,” the utility had hoped to emerge from that meeting with a public statement of support from the gaming industry and others after reworking their bill to address both stakeholder and lawmaker concerns.

That joint support didn’t materialize. Instead, major industries are gathering intelligence and deciding whether they want to mobilize for what could be a protracted and expensive fight among some of the state’s most powerful industries and lobbyists.

“There are still serious concerns,” said one source familiar with the meeting, who described the gaming industry’s reaction.

Gaming companies are still trying to understand what the utility’s proposal does, how much it would raise rates and how much it would relax regulatory standards that could protect the gaming industry, and all ratepayers, from higher rates.

So there may yet be opportunities to take a closer look at SB 123-turned-NVision, and possibly to make changes where necessary. It looks like the big casinos are asking what they're paying for... And why. And their skepticism only helps everyone else who has concerns about this legislation.

Why is there such a rush to pass this altered bill when NV Energy needs no legislative approval to shut down the Reid-Gardner Coal Plant near Moapa? How does NV Energy plan to access the natural gas it wants for new gas fueled power plants? Is fracking part of the plan in any way? And why are consumers being asked to shoulder so much of the cost for NVision?

Some are also asking why Governor Brian Sandoval (R) rushed to signal his support for the NVision-possessed-SB 123. But really, that isn't a mystery. The lobbyist pushing this for NV Energy is none other than key Sandoval confidant and R&R power player Pete Ernaut. Need I say more?

We'll see if there will ultimately be enough pressure on NV Energy to provide honest answers to these questions. But if the gaming companies are this concerned about the altered SB 123, then NV Energy may be required to answer these tough questions. It's now just a matter of whether that classic R&R magic will be enough to end skepticism of NV Energy's new "vision".

We shall see.

Fears of Californication?

Yesterday, prominent Nevada GOP power player, R&R big wig, (and confirmed Sandoval inner circle member) Pete Ernaut complained about the new push to bring tax initiatives to the ballot so Nevada voters can finally do what our Legislature apparently can not do. You tell me if you notice something familiar here.

“It should be warning to everybody because this is something that could very rapidly turn into the next iteration of the California ballot, where we have 10, 12, 13 ballot measures on a number of issues and you wake up one day and really you’ve taken the power away from the Legislature or the governor to make any decisions,” he said.

“And that’s really what they’re struggling with in California more than anything else is you have this entire apparatus in the California state Legislature that essentially has the ability to make decisions on about 5 percent or 6 percent of the entire California budget,” Ernaut said in an interview on the Nevada NewsMakers television show. “If we’re not careful, that’s the way that it will go.”

Now before I explain why I suspect Ernaut said this, I actually want to give him some props for pointing out what I've been saying here for several months. California, here we are!



As we were discussing on Sunday, California currently has three tax initiatives competing for voters' attention and support this year: one by civil rights attorney Molly Munger that seeks to raise income taxes on nearly everyone, one by Governor Jerry Brown (D) that mostly raises income taxes on the wealthy but also keeps in place a sales tax hike affecting everyone, and one by Courage Campaign and the California Federation of Teachers that only raises taxes on the ultra-wealthy earning more than $1,000,000 a year. All three promise to restore investment in public education that's been slashed to death, but all three also face challenges in the duration of the new revenue stream, as well as how much each of them can really pull in.

And of course, we can't forget how California got into this mess in the first place. Starting with the Prop 13 tax restructuring of 1978, followed by the education spending mandates in Prop 98 in 1988, followed by a whole series of special tax policies and spending formulae approved by the voters all through the 1990s and 2000s, California's budget has become an unmanageable fiscal hot mess. And especially because we as people like to "have it all" without ever paying for any of it, California faces chronic budget woes. (It turns out that passing spending mandates without finding the appropriate revenue to fund them causes huge budgetary problems. Surprise?)

However, not all of California's or Nevada's problems can be blamed on "we the people". The reason why Jerry Brown, Courage Campaign, and Molly Munger want to take their respective tax initiatives to the voters is because an intransigent and obstructive G-O-TEA minority in their Legislature refuses to consider any kind of sensible tax reform. And now that sensible Republicans like the late Bill Raggio and Kenny Guinn are distant memories for Republican leadership in our Legislature today, we're now facing the same problems. While I understand, and even sympathize with, Pete Ernaut's concern about "direct democracy run amok", what else are we the people supposed to do when our Legislature can't do its job and pass a workable budget?

And this brings me to the reason I suspect Pete Ernaut is really worried about the proposed tax initiatives: They're aimed at his clients. Ernaut seems to worry about the Legislature losing its authority on the budget now, but he didn't seem to mind Republican legislators giving a big, fat "Gov Wreck" rubber stamp to Brian Sandoval's original slashing of public education before the Nevada Supreme Court forced him to agree to extend the 2009 tax deal. But now that Monte Miller, the Nevada AFL-CIO, and Kermitt Waters are all aiming at Ernaut's top R&R clients, he all of a sudden wants the Legislature to set tax policy. Is that just because he thinks we the people will do what the Legislature hasn't done?

Republican pollster Glen Bolger, who does polling for the Retail Association of Nevada, revealed in his newest survey that Nevadans want the mining industry to pay its fair share.

Mining tax:

As you may know, there is a proposal to increase the state mining tax. I would like to read you
two statements that people are saying about the proposal. After I read each statement, please tell me which one comes closest to your own opinion.

Some people say increasing the state mining tax is a good idea because with the increase in the price of gold and other minerals, the mining industry is undergoing a boom time and should pay a higher tax rate.

... while...

Other people say an increase in the mining tax is a bad idea because at some point the price of gold and other minerals will drop back down to normal levels and a higher tax rate will hurt the industry and cost jobs.

Which statement comes closest to your own opinion?

58% GOOD IDEA

38% BAD IDEA

Now this explains why the mining industry is suing to block Monte Miller's mining tax initiative. Ernaut has probably seen similar private polls showing similar results. The more Nevadans learn about how multinational mining corporations have abused our tax code to pay virtually nothing for profitting off our natural resources, the angrier we get. And if the decision on how much to tax them moves from the Legislature to "we the people", the mining industry will probably have to kiss its sweetheart deal goodbye.

This probably also explains why "big bid'ness" power brokers (like Monte Miller?) fear the AFL-CIO's margin tax on big business. In addition to the mining industry, other big multinational corporations like to set up "on shore tax shelters" here in Nevada to avoid paying taxes. But really, what do we get out of it? After seeing them profit while Nevada families suffer from decaying schools and inadequate transportation infrastructure, Nevada voters may also be ready to finally make the big guys pay their fair share.

So in the end, Pete Ernaut may have a valid point in stating the problems with "ballot box budgeting" and waging electoral campaigns on tax policy. However when the Legislature won't tackle this, someone has to. And when Nevada is in real need of real reform that finally moves our tax code into the 21st century, we can't blame citizen activists for wanting to take matters into their own hands. And since Ernaut's own BFF in the Governor's Mansion encouraged obstruction on tax reform in Carson City last year, he should have realized that he helped bring "Californication" of Nevada policy making here.