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Lands transfer advocates push to hire private attorney

Published December 3, 2014 7:25 pm

Bids requested • Economic report in hand, commission seeks legal proposals on how to proceed.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Advocates of transferring federal lands to the state of Utah figure a 780-page economic analysis bolsters their cause.

They're so buoyed by economists' conclusions — that the state could break even or possibly make a little money managing public lands — they plan to hire an outside attorney to advise them on how to proceed with the plan.

At a meeting Wednesday at Utah's Capitol, members of the Commission for the Stewardship of Public Lands reviewed the report from a team of researchers. Economists from the University of Utah, Utah State and Weber State University estimated the cost of taking over more than 31 million acres of public land would total $280 million. But revenues from oil and gas development, recreation and other uses would generate more than $331 million.



That accounting depends on a lot of assumptions — including that the price of oil and gas will remain stable or grow and that Utah's energy production will boom long-term.

University of Utah senior research economist Jan Stambro warned the commission that while oil and gas development would generate 77.5 percent of the revenue from federal lands, there is a major risk in relying solely on the energy industry.

Stambro showed the commission 10 scenarios breaking down average oil prices. The best case would have the state making more than $1.1 billion in oil and gas revenues by 2035. If the state gets 100 percent of the royalties charged for both existing and new wells, and with drilling increasing by just 15 percent, the report projects that state oil and gas revenues would start at $389.2 million in 2017.

But Stambro said oil prices are dropping and factors out of the state's control could severely impact future revenues.

"When oil prices are low, the state will have to look at other options for revenue," she said.

Tony Rampton, public lands section chief with the attorney general's office, said the researchers were asked to model low oil prices to provide an idea of "what happens if things go to pot."

"In the neighborhood of 10 years, we could have a net benefit of something near a billion dollars a year," Rampton said. "If the low price occurs, we are not looking at hundreds of millions of dollars, maybe $100 million, the state would have to adjust for. This report gives us an idea on how to do that."

Commission members suggested their own ideas Wednesday for making up the difference in lean oil and gas years — including revitalizing the timber industry and mining for rare earth minerals.

The cost of fighting wildfires also is unpredictable and expensive.

According to the researchers, federal agencies spent an average of $52.2 million per year from 2008 to 2012 on non-suppression fire-fighting costs, including mitigation and forest rehabilitation. The Utah Division of Forestry, Fire and State Lands contributed $1.4 million annually to fire-fighting on public lands.

Federal agencies covered 97.3 percent of those non-suppression costs.

The U.S. Forest Service averaged $2.48 an acre in fire-fighting costs; the Bureau of Land Management spent $1.38 an acre; and the state spent 6 cents per acre.

Assuming the state would continue wildfire management as it stands now, the economists said, Utah would need an estimated $25.9 million increase in funding to fight fires on the transferred lands.

Other non-suppression wildfire costs could add up to a $50.8 million bill to the state.

After the report, West Jordan Republican Rep. Ken Ivory, the driving force behind the land transfer idea, told commission members it's time to move forward with a legal campaign.

Some commissioners questioned whether a state attorney might be able to do the work. But the commission ultimately concluded due the high profile, delicacy and complexity of the issue that a specialized private attorney should be hired.

The commission has set aside $2 million to keep the land transfer campaign moving forward. The economists' study cost $500,000 to complete. A contract with a special attorney would eat up another chunk of funding.

Commissioners decided to issue a request for proposals to generate bids from interested law firms.

Ivory said he attended a meeting with many interested parties and noted that one, possibly even Gov. Gary Herbert, said "We need to load the gun. Circumstances may determine when and if we need to fire it."

Salt Lake City Democratic Rep. Joel Briscoe was the lone commission member to vote against hiring a private attorney.

brettp@sltrib.com

 

 

 

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