Utah lawmakers are serious about wanting the state to take control of land currently owned by the federal government. Members of the Commission for the Stewardship of Public Lands voted 6-2 this week to draft a lawsuit they hope will spur the Supreme Court to transfer ownership. The state attorney general will decide whether to take it to Washington.
We urge lawmakers to move cautiously on this one. While it is uncertain whether the federal court system would consider transferring 31.2 million acres of energy and mineral rich land into state control, it is equally uncertain whether such a thing would be a good deal for Utah taxpayers.
A good barometer for that is the price of oil, which currently is hovering south of $40 per barrel. Oil prices have fluctuated consistently through the years, but with energy extraction surging in the United States, thanks to hydraulic fracking and other modern technologies, many experts are predicting low prices will remain for a while.
Utah lawmakers can’t afford to forget the results of a 784-page study they commissioned last year — one that was written by researchers at the University of Utah, Utah State University and Weber State University. It found the state is likely to generate hundreds of millions of dollars per year from oil extraction if the price settled somewhere around $92 per barrel. But if the price fell to an average of $62 per barrel or lower, Utah taxpayers could instead be losers.
The study showed it would cost Utah $248 million to manage the land now under federal control. Revenue sharing payments to counties would add about $32 million to that, bringing the total to about $280 million.
In 2013, the land generated revenue of about $332 million. Revenue from mineral leases made up $308 million of that. But the decline in oil prices since then has naturally led to a decline in production nationwide.
Clearly, a land transfer would be a gamble.
Were Utah to obtain title to land currently managed by the Bureau of Land Management, the state no longer would be obligated to share 50 percent of the royalties with Washington. That would indeed be a windfall to the state, but only under the right conditions.
We understand, and share, the frustrations lawmakers feel about federal ownership of roughly 65 percent of the state. At the time of statehood, Washington promised to dispose of the land in a timely manner, as it had previously with other new states. But attitudes about land conservation and the natural beauties of the West began to change in the early 20th century.
Utahns understand those issues and are more interested than outsiders in preserving the state’s natural beauties. State and national parks are huge economic engines. But a great deal of energy could be extracted from federally owned lands without destroying those beauties while providing revenue for schools and other needs.
This would happen only under the right conditions, however. At the moment, according to the state-commissioned study, those conditions do not exist. That suggests a more cautious approach, perhaps along the lines of land swaps that have proven successful, if tedious, in the past.