PUBLIC LANDS: Utah could profit from taking over 31M federal acres -- report
Phil Taylor, E&E reporter
Greenwire: Tuesday, December 2, 2014
Utah could afford to own and manage more than 30 million acres of federal lands within its borders and could even make a profit if oil and gas prices remain robust, according to a sweeping new report by Utah universities.
The report by economists at the University of Utah, Utah State University and Weber State University found it is "likely the state of Utah could take ownership of the lands and cover the costs to manage them."
The 784-page report is one of the most comprehensive of its kind to examine the fiscal pros and cons of states' claiming federal lands, a proposal that, while a legal long shot, resonates strongly among Western conservatives who say the United States has done a poor job managing them.
Utah's Legislature in March 2012 passed a law demanding that the federal government by Dec. 31 relinquish 31.2 million acres owned mostly by the Bureau of Land Management and Forest Service to the Beehive State. Proponents of the bill believe Utah is owed the lands under its 1894 Enabling Act, but legal scholars say the demand is unconstitutional.
Utah has no near-term strategy for wresting the lands from the federal government, but is seeking to build a coalition of support among other Western states.
Yesterday's report, which was 18 months in the making, aims to inform policymakers in the West of the ramifications of owning federal lands. Similar efforts have been underway in Idaho and Montana, though neither state has made as bold a claim to federal lands as Utah.
Utah is up to the task, according to Gov. Gary Herbert (R), whose Public Lands Policy Coordinating Office (PLPCO) oversaw the report's development.
"It is important to make decisions based upon a thorough review of accurate, relevant information," he said in a statement. "By conducting a thorough economic analysis, [PLPCO] has provided policymakers with the data to assess the opportunities, challenges and risks associated with the potential transfer of public lands from federal to state ownership."
PLPCO is run by Kathleen Clarke, who was BLM director under former President George W. Bush's administration. It offered its own summary and interpretation of the report.
"Most significantly, it demonstrates that a transfer of the public lands can be an economically sound pathway to a more balanced public lands policy," the PLPCO summary said.
But the report drew immediate criticism from conservation and sportsmen's groups, which said Utah's takeover plan is legally far-fetched at best and could lead to destructive drilling or land sell-offs if revenue projections don't bear fruit.
"Today's report is yet more evidence that plans to seize control of national public lands in Utah are nothing more than a thinly veiled attempt to increase the pace and scale of oil and gas development at great expense to taxpayers and the state's renowned natural wonders," said Greg Zimmerman, policy director for the Denver-based Center for Western Priorities.
Critics pointed to the report's conclusion that Utah's takeover bid would only be profitable if oil and gas prices remain stable and high and the state is able to increase its cut of the royalties from federal minerals from 50 to 100 percent.
In 2013, a total of $331.7 million was generated on lands managed by BLM and the Forest Service in Utah, 93 percent of which came from oil, gas and coal.
It is unclear how Utah would convince the federal government to forgo its portion of mineral revenues, particularly in a time of deficit cutting in Washington, D.C.
Moreover, critics of Utah's takeover plans note that about 35 percent of the $248 million annual cost to manage the BLM and Forest Service lands comes from fighting wildfires. While the report said Utah could cover this cost with mineral revenues, Utah would likely lose other federal wildfire resources such as air tankers, trained personnel, equipment and dispatch services, it said.
"The report's authors bend over backward to be polite in their summary, but the substance of their analysis describes in plain terms just how costly and fiscally reckless this land grab scheme really is," said Matt Lee-Ashley, a senior fellow at the left-leaning Center for American Progress in Washington, D.C., a critic of transferring federal lands.
CWP in an August report found that in a handful of western states in 2011 and 2012, the Forest Service spent more to quell wildfires than what the states spent on their entire law enforcement budgets.
But the Utah report notes that wildfire size and frequency are not unusually high in Utah due in part to its arid climate, insect epidemics, spread of nonnative flammable vegetation and development in the wildland-urban interface.
The report does acknowledge that predicting the "full economic effects" of a land transfer "is simply not possible."
For example, it is unclear whether the U.S. government or Utah would oversee grazing, wild horse and burro control, and invasive species management if the lands fell into state hands.
But it does find potentially huge benefits from owning the federal mineral resources and having the ability to more efficiently develop state trust lands currently locked within federal conservation areas.
According to the report, the Utah Geological Survey estimates proved reserves of 613 million barrels of oil, 7.8 trillion cubic feet of natural gas and 268 million barrels of natural gas liquids in Utah.
"Clearly, tapping into this resource could provide a substantial revenue stream for the state," the report found.
It found that transferring the lands -- which account for about 60 percent of Utah's landmass -- "would be a major shift in the current economic structure of Utah."
The total cost of managing those lands would be about $280 million annually after considering that Utah would also take over the federal government's roughly $32 million in annual payments in lieu of taxes (PILT), which compensate Utah counties for tax-exempt federal lands.
Federal agencies and their employees are major economic players in Utah, the report found. Operational purchases of BLM, Forest Service, and Fish and Wildlife Service support nearly 5,000 jobs in Utah and generate $236.2 million in earnings for Utah residents. Transferring the lands would result in the immediate loss of roughly $150 million in federal payroll, it said.
A key concern of takeover critics is that sportsmen, hikers and other recreationists would lose access to public lands, either because they would be more heavily drilled or mined or because they would be sold off to the highest bidder.
But PLPCO said the report doesn't contemplate selling any transferred lands, a move that would harm the state economically.
The report calculated the total value of recreation and travel in Utah at approximately $16.9 billion and warned that outdoor amenities must be maintained.
"If recreational resources were degraded, impaired or polluted, the demand for travel to recreational destinations would fall, and so would the benefits to society," it said.
PLPCO urged the Utah Legislature to continue its pursuit of taking over federal lands.
