Energy – Fracking
Fracking rules approved; jobs and opportunity coming to Southern Illinois. The rules, from the Illinois Department of Natural Resources (DNR), are a legally essential element for engineering teams to enter Illinois properties and drill for fossil fuels. Up until now, Illinois has not had rules or a permit structure in place to cover horizontal drilling in sedimentary beds of shale rock. A newly-invented segment of oil drilling technology, “fracking,” has sprung up to puncture these tightly-bound particles of rock and force them to yield their crude oil and natural gas. A significant deposit of New Albany shale, believed to be oil-rich, lies underneath many counties of southeastern Illinois.

Southern Illinois will soon witness the economic boom tied to hydraulic fracturing, or fracking, of natural oil and gas in Illinois.  On Thursday, the 12-member Joint Committee on Administrative Rules issued a “certificate of no objection” to fracking regulations for the State of Illinois.  This historic milestone authorizes the fracking permit process to get underway, and in doing so, brings Southern Illinois communities one-step closer to a windfall of new jobs and revenue.

New natural gas production in Illinois could create more than 45,000 jobs and $9 billion in economic impact, according to an Illinois Chamber Foundation study.

State Representative David Reis (R-Ste. Marie), chief Republican negotiator and sponsor of the fracking legislation, praised the jobs measure: “Fracking has the potential to create thousands of jobs for downstate residents.  Local businesses, classrooms and government services, such as fire and police, could benefit greatly once fracking gets underway in our state.”

The economic opportunities associated with fracking are limitless.  Local businesses will witness new revenue with an uptick of clientele purchasing materials.  Thousands of jobs are anticipated in the workforce spanning from the fracking/drilling industry, transportation, as well as new retail employees to meet heightened demand for services.  Landowners can also move forward with leasing land for the fracking industry to drill on.

Reis continued, “With economic recovery being paramount to rebuilding our state’s fiscal health, we must forge ahead with innovative policies to fuel job growth and bring much needed resources to our local communities.”

The director of the Illinois Department of Natural Resources testified Tuesday that if state legislators do not act to set rules governing horizontal hydraulic fracturing the agency will not issue fracking permits “absent a court order to the contrary.”

The rules were on the agenda Tuesday of the 12-member Joint Committee on Administrative Rules, but the committee defered action until Nov. 6. The committee has until Nov. 15 to adopt the rules or the process of formulating fracking regulations would start over again.

Oil and gas drillers for the most part have held off on fracking in anticipation that regulations would pass. Meanwhile, the Illinois Department of Natural Resources has not issued permits. Read the rest of the story by Julie Wernau in the Chicago Tribune.

A legislative panel said Tuesday that it wants more time to decide whether rules written by the Department of Natural Resources to govern hydraulic fracturing in Illinois can take effect.

The legislature's Joint Committee on Administrative Rules received proposed rules for high-volume oil and gas extraction from the DNR on Aug. 29, after the agency reworded some rules based on more than 30,000 comments on it original draft. But industry and environmental groups said they would ask JCAR to seek dozens of changes.

The panel originally had 45 days --until mid-October -- to act on the rules, but exercised a 45-day extension, asking the DNR to ensure the rules comply with the intent of a law passed last year after intense negotiations that included industry and environmental groups. Read the AP story in the Daily Herald.

Today marks the 407th day since the Hydraulic Fracturing Regulatory Act was signed into law by Governor Pat Quinn. However, hydraulic fracturing still has not begun in Illinois because the necessary rules have not been implemented by the Quinn administration.

Despite the urgency felt by most, the Illinois Department of Natural Resources (IDNR) has failed to issue final rules and has reportedly hired only a few of the dozens of employees they need to complete their rulemaking assignment, thus causing this enormous resource to sit untapped. "The Quinn administration has failed to implement the law that passed overwhelmingly by a bipartisan group of lawmakers,” said Mark Denzler, vice president and COO of the Illinois Manufacturers’ Association. “Illinois’ hydraulic fracturing law has the strongest set of regulations in the nation, backed by environmental organizations, business community and agricultural interests. Additionally, Illinois has one of the highest unemployment rates in the country, yet Governor Quinn is allowing politics to derail the creation of thousands of jobs and millions in tax revenue."

It's been five years since the Great Recession ended, but you'd never guess it by looking at Illinois' bleak economic statistics.

The state's unemployment rate sits at 7.1 percent. More telling is the fact that Illinois suffered its largest monthly workforce loss in recorded history in June. And a recent report shows that while the nation as a whole has recovered the nine million jobs lost in the worst economic downturn since the 1930s, Illinois has yet to come close to recouping its job losses.

Illinois has 184,000 fewer jobs than it did before the 2007 financial crisis, and the state's collective non-farm payroll is 3.1 percent below what it was in December 2007.

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Taxes – Graduated Income Tax
So-called “fair tax” will not appear on November ballot.  Although state senators who support a graduated income tax attempted to move a constitutional amendment to carry out this goal (SJRCA 40), Republicans blocked this amendment and helped prevent it from meeting its deadline for General Assembly action. The General Assembly cannot place this amendment on the November 2014 ballot and it will not, therefore, become law.

Governor Pat Quinn has signed a bill which will allow Hyrdraulic Fracturing, or 'fracking,' in Illinois. Fracking is the process by which natural gas is extracted through the fracturing of shale rock. The process is controversial, with opponents saying it pollutes groundwater, while proponents say the process is safe.

It's also very profitable. In a news release, the Governor said, " The new law enacts the nation's strongest environmental protections for hydraulic fracturing and has the potential to create thousands of jobs in Southern Illinois," where large amounts of natural gas reserves can be accessed through fracking.  It also holds the potential to add millions of dollars in tax revenue.

Scott Picken at MyStateline.com has the rest of the story.

Budget
Fitch, Moody’s cut State’s bond rating again; reduction is described as response to General Assembly’s May 2013 inaction on pension reform.  The Fitch reduction, announced on Monday, June 3, was from “A” to “A-”, and the Moody’s reduction, announced on Thursday, June 6, was from “A2” to “A3.”  Although these letter grades do not look to outsiders like bad letters, bankers and other professionals treat these letters as bad signs when they are displayed by a public-sector entity.

The Fitch and Moody’s ratings reductions further intensified the reputation of Illinois as the state with the lowest credit rating in the nation.  States traditionally pay among the lowest interest rates when choosing to borrow money, because they (unlike private borrowers) enjoy an unlimited right to replenish their coffers by raising taxes.

“Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source.” 

 – President Richard Nixon (November 7, 1973) 

Guest Contributor
Mark Denzler, Vice President & COO
Illinois Manufacturers' Association


Four decades ago, President Richard Nixon introduced “Project Independence” to the American people only weeks after the Arab oil embargo threatened the United States with the long-term possibility of high oil prices, a disrupted energy supply, and a potential recession. The price of gasoline jumped from 38.5 cents per gallon to more than 55.1 cents within a span of five months and politicians called for a gas-rationing program. Ninety percent of gas station owners complied with the President’s request not to sell fuel at certain times on weekends and the state of Oregon implemented a ban on Christmas and commercial lights. The nearly five-month embargo had a profound impact on the nation and lit the fuse to develop home grown energy.