School trust managers say they will go forward with oil lease plan

Published: Sunday, Sept. 1 2013 10:35 p.m. MDT

A drilling rig stands in the Greater Natural Buttes natural gas field operated by Anadarko Petroleum Corp. in Uintah County.

Geoff Liesik, Deseret News

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SALT LAKE CITY — School trust land managers said a controversial oil and gas lease in the Book Cliffs will not be reconsidered, despite Gov. Gary Herbert's objections, the state wildlife agency's disappointment and sportsmen's harsh criticism.

"The agency intends to pursue this lease agreement as originally instructed by our board," said Kim Christy, deputy director of the Utah School and Institutional Trust Lands Administration. "That doesn't suggest we are turning a blind eye to the governor's concerns."

Herbert last week added his voice to a growing chorus of criticism aimed at the agency's board of trustees for its decision to lease 96,000 acres in the Book Cliffs to Anadarko, one of the world's largest independent oil and gas exploration and development companies.

While Anadarko has been praised by environmental advocates and others for its stewardship reputation and willingness to work with groups' concerns, fear remains that the prized roadless area on the southern portion of the cliffs will be compromised.

"The announcement by SITLA last week was a surprise to DWR and was very disappointing," said Greg Sheehan, director of the Utah Division of Wildlife Resources. "While we understand and appreciate the fiduciary role SITLA has to provide funding to the school system using trust properties, we're concerned about the impacts of oil and gas development will have on wildlife that reside in the Book Cliffs."

Sheehan said the state agency owns 10,000 acres in the roadless southern portion that have been steadily acquired over the years to foster a thriving population of elk, deer and bear. The agency has also worked to restore habitat for the Colorado River cutthroat trout and doesn't want to see that work jeopardized, Sheehan added. Its ribbon of property is surrounded by the SITLA land, which the wildlife agency pays for so the public can have access.

"Because it is generally considered roadless, there are many opportunities to backpack or horseback into this area, and it is very beautiful back in there," Sheehan said. "That, coupled with the fact that we have well-managed and very solid wildlife populations, have made this both in the state and nationally an important wildlife area."

Christy said he doesn't believe the roadless area will be greatly impacted by any exploratory oil and gas development that may occur over the five-year life of the lease.

"I question whether or not the limited entry hunt process will be diminished," he said. "I really believe the integrity of the area will be maintained."

Christy said the administration will work with the wildlife division, sportsmen's groups and others to come up with ways to minimize the impacts of any development, and there has been suggestions that an advisory committee be organized to oversee the process.

"We intend to have some direct dialogue with the interested parties, including the governor’s office, to talk about ways we can address this responsibly in a way that addresses concerns," he said. "We firmly believe we can do this in a win-win posture if given the opportunity."

On Wednesday, Herbert called on the school trust lands' board to revisit its decision to lease the land to Anadarko, particularly 18,000 acres in the southern portion.

Herbert said the wildlife and conservation value of the land is such that it should be considered as part of a lands-trade proposal being negotiated in Washington by Rep. Rob Bishop, R-Utah.

Christy said the administration stands to gain millions of dollars from its lease with Anadarko and could not in good conscience reject the deal, or be in breach of its fiduciary duty.

The administration estimates that if the lease proves successful for development, one well could produce as much $35 million in gross revenues, translating into more than $6 million in royalties going to the state’s Permanent School Fund.

Jennifer Johnson, a member of the Utah State Board of Education and the board's representative on the Trust Lands Advisory Committee, said the Anadarko lease will benefit schools.

"Energy production is an essential piece of the education funding puzzle, providing tens of millions annually for Utah’s public schools. This is the largest block owned by the school trust, and was specifically targeted for its mineral potential," Johnson said.

SITLA manages lands granted to Utah at its statehood for the financial support of Utah's public schools and land-grant universities, such as the University of Utah and Utah State University. Its Permanent School Trust Fund topped $1 billion in 2009.

Created by the Legislature in 1995, its net revenue has increased from an annual $15 million to about $80 million a year.

Email: amyjoi@deseretnews.com, Twitter: amyjoi16

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