Utah takes on feds over control of resource-rich lands

In yet another battle in a decades-long war over rights to develop various natural resources, including coal, Utah Gov. Gary Herbert on March 23 signed H.B. 148, which demands the federal government make good on the promises made in the 1894 Enabling Act to extinguish title to federal lands in Utah.

The governor was joined by various elected officials, including U.S. Senators Orrin Hatch and Mike Lee, in a show of unity for the effort to return public lands to state control. H.B. 148 creates a principle-driven framework for a structured public dialogue, a potential legal challenge, and path forward to re-balance Utah’s relationship with the federal government, said a statement from Herbert’s office. The governor conceded this bill is only the first step in a long process.

“We need a paradigm change when it comes to public lands management. This bill creates a mechanism to put the federal government on notice that Utah must be restored to its rightful place as a co-equal partner,” said Herbert. “The federal government retaining control of two-thirds of our landmass was never in the bargain when we became a state, and it is indefensible 116 years later.”

“Utahns can better manage the lands in our state far better than any bureaucrat in Washington ever could,” said Senator Hatch. “As a leader in the Sagebrush Rebellion, I’ve been fighting to turn federal lands in our state over to Utahns to own and control.  I believe we are in a climate where, if we do it right, the lands in Utah can finally be under the management of our state, and I applaud the Legislature, Governor Herbert, and other parties in our state for sending this message.”

The politicians behind this effort pointed out that educational funding for children is at stake, since Utah’s School and Institutional Trust Lands Administration (SITLA) derives income from the leasing of natural resources on state lands.

This bill adds to an effort by Herbert to wrest control of the coal-rich Grand Staircase-Escalante National Monument from the federal government. The Clinton Administration in the 1990s created the monument, forestalling efforts by Andalex Resources, PacifiCorp and possibly others to develop coal mining operations within the monument. The federal government later gave the state federally-owned coal reserves in other parts of Utah to help compensate for the loss of SITLA income from state coal lands within the monument, but that hasn’t stopped Utah leaders from wanting the monument gone and a return of the state’s rights to lease out coal reserves within the monument.

An environmental group, the Southern Utah Wilderness Alliance, in a March 23 statement said the bill is “almost certainly unconstitutional, is bad public policy and won’t help fund Utah’s schools.”

H.B. 148 requires, among other things, the federal government to transfer title of federal public lands in Utah to the state before Jan. 1, 2015. These public lands include lands managed by the U.S. Bureau of Land Management, U.S. Forest Service, U.S. Fish and Wildlife Service, and National Park Service. They include, among others, sensitive sites such as Grand Staircase-Escalante National Monument, Glen Canyon National Recreation Area and all national wildlife refuges in the state, the alliance noted.

The legislature has indicated that some of these lands would be sold outright to the highest bidder while others would be kept in state ownership but opened to oil and gas drilling, off-road vehicle use and “extractive” industries, the alliance added. The legislature’s own legal counsel declared that the required land disposal has a major chance of being declared unconstitutional, the alliance noted.

The legislature has consciously decided time and again not to fund Utah schools at a higher level, so complaints about the loss of school revenue from the currently protected federal lands aren’t particularly relevant, the alliance said. One choice the legislature has made which limits public education funding is to give natural resource extraction companies favorable tax treatment. Headwaters Economics recently released a report which found that in fiscal year 2011, Utah had the lowest effective tax rate on oil and natural gas activity of any western energy producing state. Likewise, Utah has no severance tax on coal, while Wyoming has a coal severance tax rate between 3.75% and 7%, the alliance pointed out.

Currently, all coal in Utah is recovered from the Wasatch Plateau, Book Cliffs and Emery coal fields in central Utah. Huge unexploited reserves remain in other areas of the state, including within the Grand Staircase monument. Without access to those new reserves, the state’s coal industry will eventually see falling production as its taps out the reserves in the current production areas.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.