Shale Reduces Energy Costs for Illinois Schools

Despite diligent efforts by many, Illinois has yet to reap the full benefits other states have enjoyed as result of the shale energy revolution driven by the use of hydraulic fracturing. The unabashed stall tactics and misinformation campaigns of Illinois’ anti-fracking movement are largely to blame.

But that doesn’t mean that Illinois hasn’t enjoyed some benefits from the nationwide unconventional oil and natural gas production boom. Local businesses, cities and counties in Southern Illinois have seen dramatic economic benefits over the past few years from the presence of oil and gas companies in the region.

And now, the state is realizing benefits in an area that desperately needs any positive financial news it can get — education. A recent study conducted by IHS Global Insights on behalf of the American Petroleum Institute (API) highlights the boost shale development has given to Illinois’ beleaguered public education system. Illinois public schools saved $59 million in energy costs during the 2012-13 fiscal year, thanks to the increased domestic natural gas production that has driven down energy costs. That’s enough money to employ 670 teachers. In total, the state’s public school system saved 7.2 percent on electricity and 13.4 percent on natural gas.

These figures are all-the-more significant considering the sad state of public education in Illinois.

Between 2008 and 2012 alone, more than 6,400 teachers and teacher’s aides across the state were dismissed from their positions due in large part to state funding reductions caused by Illinois’ pension-funding crisis.

Teachers certainly haven’t been the only ones who have suffered from the state’s economic pinch. Since 2010, Illinois public schools have been funded at just 89 percent of what the state has promised them. So essentially, the average student has received only $5,734 in state funding per school year in recent years, which is $385 less than what is required by state law.

It’s been a double whammy for poorer areas of the state where high unemployment has helped drive down property values, and subsequently, property tax revenue – which is the primary source of education funding in the state.

But there is hope. These are the very areas of the state that would benefit most from the enactment of the Illinois Hydraulic Fracturing Regulatory Act, which Gov. Pat Quinn signed into law nearly a year ago.

That hope rests on the shoulders of the Illinois Department of Natural Resources. But the department remains bogged down with 35,000 public comments objecting to the law as a result of a deliberate offensive by anti-fracking organizations to flood and overwhelm the DNR with a cut-and-paste campaign. The DNR has until November to write regulations before starting the process over from scratch.

“America is now the world’s top producer of natural gas, and it’s helped to push down the costs of keeping our students warm and local governments running,” said James Watson, Executive Director of the Illinois Petroleum Council, a division of API. “For Illinois taxpayers, these energy savings can mean more funding for education and local services.”

Shale development has already helped alleviate some of the burden school districts across the state are dealing with. At the same time it has saved Illinois taxpayers $11.5M overall in government spending. The key now is for Illinois to realize that it can take a direct approach to continue solving one of its many financial problems by enacting the IHFA as soon as possible.

“To protect these benefits and grow the economy, our policymakers must turn aside efforts that would impose duplicative regulations on shale development, slow permitting, or limit access to domestic resources,” Watson said.

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