If you have ever wondered how the government works -- local, state or federal -- this perspective probably won’t help any. I was in Nashville, TN, for the Invensys OpsManage’11 Conference and was reading the front page of the Nov. 8 edition of The Tennessean. Tennessee Gov. Bill Haslam was warning the citizens of the state that repairing the state’s highways and bridges would be a major problem in the coming years because of declining revenue from gasoline taxes. That was the bad news. In the same story, it was pointed out that Nissan North America Inc. is erecting a plant to manufacture lithium-ion batteries for its electric cars. Starting in 2012, the company is ready to build its Leaf cars at the plant in Smyrna, TN, and will build electric motors for the vehicles in 2013 at another of its plants in Decherd, TN. That, of course, is the good news since that means more jobs for Tennessee. And, that brings us back to the bad news. You can’t build electric cars and make money on gasoline taxes. Fuel-efficient cars will not repair bridges and highways, but the vehicles will continue to tear them up. So now the state government needs to focus on ways to rebuild the transportation infrastructure in an era of fuel efficiency. There seems to be something about the law of unintended consequences playing out in state government. The governor doesn’t expect to propose any legislation to address the problem in the next legislative session, but he emphasized that it would need to be addressed sooner rather than later. I suppose that means the governor won’t try to shut down the electric-vehicle manufacturing plants in his state. It is time for more of those creative solutions that aren’t tax increases even if you do pay more in taxes. How about introducing a road-use fee (not a tax) on tires since those cause most of the damage? Or, maybe a one-tenth of one cent mileage fee would work. You would have to put down your odometer reading when you filed your state taxes each year and pay on the mileage you drive. This one wouldn’t hurt the poorer people that don’t own tires or cars. It will be interesting to see how creative they get. Speaking of the law of unintended consequences at the federal level, the Barack Obama administration is caught between a rock and a hard place over its decision on whether or not to construct the Keystone XL Pipeline to carry Canadian syncrude to refineries on the U.S. Gulf Coast. The U.S. needs a steady supply of oil from a stable ally and trade partner that can make a dent in imports from other less friendly parts of the world. The construction project would put a lot of people to work over its 1,700-mile length. Both of those are key issues for the U.S. government. But, there is a huge backlash against the project that would carry the syncrude through an area that overlies the Ogallala aquifer, a major source of water for farmers and municipalities in the high plains. A very large majority of people who are opposing the pipeline includes the same ones that voted for Obama in the 2008 elections. If he wants to get re-elected, he probably doesn’t want to alienate that portion of the electorate. The issue over polluting the aquifer with syncrude is somewhat amusing in that so many farmers are opposing the pipeline based on that alone. However, the aquifer has been polluted for many years by -- you guessed it -- the farmers. Researchers have shown that fertilizers used by farmers have filtered down into the aquifer, polluting it. Of course, no one is mentioning that in the rhetoric that is filling the airwaves today. Since it is a pipeline that crosses the international border between Canada and the U.S., the U.S. State Department must approve or reject the project, which is how the Obama administration got involved. That immediately made it a political hot potato. The decision has already been postponed once. Originally, the State Department was going to make a decision by the end of this year. But, that has been delayed into 2012. Don’t be surprised if the decision is delayed into 2013. That would make it a non-issue for the 2012 presidential election. And, this administration would not have to worry about how it would affect Obama’s chances in the 2016 election since he couldn’t run anyway. This is yet another opportunity for a creative solution for our government. It would be nice if a few more creative solutions actually did come out of our federal government this year on jobs, taxes, deficit spending, etc. Contact the author, Scott Weeden, at sweeden@hartenergy.com.
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