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Comment by onlyrealcuzzo | Hacker News Reader

Do the tax payers get any money for these negative externalities?

Or is this just going to be a handout to whichever private company has the right connections with the right politicians?

Is this mainly going to benefit those politicians and private companies?

This isn't going to materially reduce gas prices for the average Ohio person to matter at all.

State parks are a huge amenity...

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> Do the tax payers get any money for these negative externalities?

At least they should get vouchers for drinking water once their groundwater is polluted

Just my two cents, but this stuff is like having an medical procedure, WHO is doing the procedure is probably the most important element (e.g. do they do things the right way).

Also, I think regulators have been far too lax in the amount of environmental and P&A liability insurance/bonding that these companies are required to carry to support potential claims/cleanup etc. and those need to scale (along with regulations) exponentially the closer you are to population, drinking water, and food production.

The government receives severance tax for oil and gas extracted (0), income tax from employees working in oil industry, and the government is paid for the leases and royalty interest for production on the leases they grant.

(0) https://tax.ohio.gov/help-center/faqs/severance#:~:text=The%....

$0.1 tax per barrel of oil for anyone interested.

It's about a ~0.15% revenue tax at current oil prices.

I would put this in the category of almost entirely benefiting whoever has the right connections to the right politicians - with a meaningless tax to make it appear otherwise.

The royalty interest is probably the largest take for the government in this case. Typically that would be between 15% and 20% of the gross revenue generated by the leases.

25% is pretty common, I’ve seen 28%

> It's about a ~0.15% revenue tax at current oil prices

Out of curiosity, what is it on gross profit per barrel?

I think lifting cost are like ~$15/bbl so at $60/bbl (ex royalties on $80)it’s about double, but still not much, but you have to factor in the capital costs / IRR math, and that’s where it has the bigger impact - but no one is really making a marginal decision based on this

> income tax from employees working in oil industry,

Everyone pays income taxes.

If the mob starts paying income taxes, is that a good reason to bring racketeering back?

Why are they paying the same mineral rights fees for extracting from a protected state park, as they would from non-protected land? Is a park designation utterly meaningless in Ohio?

But oil is not uniformly distributed, if it is a marginal decision (probably unlikely in this case) then those are jobs not needed, and taxes forgone, the logic is sound on truly marginal cases, but it’s probably some fraction of that that is truly marginal

Strictly speaking, criminal gains are taxable and you are technically required to declare any illegal income on your taxes.

As for racketeering, it never left. It's just a government institution now.

Which is fucking insane, right?

Imagine if I could walk into your house, take all your stuff, and pay you a "severance" tax of 0.125%.

The royalty is like ~20%, the severance tax isn’t super meaningful here.

The fact that your link returns a ”403: forbidden” error is a delicious irony.

Are you connecting from outside the US?

Our politicians do not serve their citizens, they only serve their patrons

see below - not an advocate for this, but in most states these are fairly mature competitive bid processes. $115m upfront payment and 20% royalty get you in the ballpark what a deal might look like.

https://www.cleveland.com/open/2023/04/texas-driller-offers-...

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