Sunday, May 8, 2011

Natural Gas Socialization

Mackinac Center:
The private gas companies in Toledo, meanwhile, had invested hundreds of thousands of dollars in pipelines and they actively opposed public ownership. The natural gas won’t last forever, they insisted, and charging a reasonable fee for it would force Ohioans to conserve this precious fuel. But they could not overcome the campaign slogan of "free gas," and the popular claim that the local natural gas wells would last thousands of years. In 1889, Toledo began the process of taxing its citizens to bring "free" gas to town.

For about five years the people and businesses of Toledo had some of the lowest fuel bills in the nation. Then, with the huge consumption and wasting of gas throughout northwest Ohio, the wells began to go dry. The city of Findlay, desperate to recoup part of its investment, had sold or leased all of its pipelines to private companies by 1899.

Shortly thereafter, Toledo did the same thing. No one connected with the public company had either the training or the desire to drill and search out new gas wells or other fuel options. They wasted money like they wasted the gas. The estimated loss to the city of Toledo was about $2 million. Meanwhile, the privately owned Northwestern Ohio Natural Gas Company took over and supplied Toledo and northwest Ohio with gas at market prices. In 1902, the company built pipelines into West Virginia to bring new discoveries of natural gas into the now depleted state of Ohio. Privatization finally prevailed.

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