Crude reality: North Dakota oil boom has Utah envying its surplus green

State officials see federal control as blocking source of revenue, education funding

Published: Saturday, Jan. 11 2014 5:20 p.m. MST

The same technology — horizontal drilling and refinements in fracking, or the technique to extract oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals — are fueling banner production numbers in Utah as well.

Utah is 10th in the country for natural gas production and No. 11 for crude oil production.

In 2012, the state enjoyed its highest crude oil production since 1986, and natural gas production also set a record.

"We're sitting on an energy gold mine in so many ways," Stewart said. "People who work in the field know that the Uintah Basin is a world-class energy resource, but it tends to be overlooked here."

Stewart and others know Utah's oil shale is a different geological animal than the shale oil of the Bakken, but they also believe the technology exists to recover Utah's share of 77 billion barrels of oil in the Green River Formation.

"I would love for Utah to become the oil shale capital of the United States," he said.

But two-thirds of the oil shale resource is on federal lands. In North Dakota, the latest state report puts the number of rigs actively drilling on federally owned prairie grasslands at zero, although oil and gas development is happening at a breakneck pace on tribal lands.

While Utah is enjoying an oil and gas boom, regulators say its record number of permits reflect a shift that is taking place.

"You are seeing an overall drift to state and private lands because of the difficulty in dealing with the long federal process of getting a permit," said John Rogers, assistant director of the Utah Division of Oil, Gas and Mining.

"The thing that is not reflected is the potential," said Kathleen Sgamma, vice president of government and public affairs for the Western Energy Alliance, which represents independent oil and gas producers in the West.

"We could be doing more in Utah if not for the federal roadblocks," she said. "There are several projects proposed in Utah that cannot get out of the environmental analysis stage, some going on year seven or year eight."

But those delays, environmental groups counter, ensure precious land resources aren't torn up, ruined for generations to come. The federal government, they argue, is often the only check — albeit an often weak one — on unrestrained energy development.

While stressing he is no admirer of the BLM, Garbett said the agency rightfully should be the arbiter between resource extraction and protection — attempting a balance he said would not be and is not found if a state agency, or state lawmakers, have their say.

"It is not like I am fan of everything the BLM does, but the public has a great more ability to influence these federal agencies than it ever would the Utah Legislature," he said. "When it comes to choosing between protecting natural values, to protecting plant and wildlife that do not generate revenue from hunting, the decision is always to go for money instead of long-term interests."

But the critics of federal land management policies say the bureaucratic pace is motivated by more than just some altruistic notion to protect the landscapes; it also boils down to money.

In Utah, there are 11,200 producing wells, with the majority of those on federal lands, generating $445 million in revenue of which the state gets half. The other half goes to the federal government, which critics would argue gives them no incentive to relinquish control here or elsewhere in the West.

"It is truly a cash cow for them," Stewart said.

Rep. Ken Ivory, R-West Jordan, believes Utah ought to be the one benefiting the most from its oil, gas and other natural resources — and sees control of those federal lands as a way to replenish the state's anemic education funding.

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