Land transfer

Editorial: Land transfer would tie Utah’s future to oil

Salt Lake Tribune

Utah’s political leaders have received the analysis they sought. A report from three state universities says Utah can afford to take over more than half the state from the federal government, and may even be able to make more money on it than the feds have.

It is a thorough look (784 pages) that weighs multiple economic factors, and it even offers a value for recreational activities on those lands. (Hiking is worth $1.4 billion.) The transfer would require either an act of Congress or a successful lawsuit, but that may not be the biggest challenge. The report also spells out two big "ifs" for the transfer to succeed for Utahns:

1) The federal government would have to turn over not only the land but also more than $100 million in annual mineral lease (mainly oil and gas) money it earns on leases it has already signed.

2) Oil prices must rise again and stay that way for the foreseeable future.

A land transfer would be more closely tying our future to … OPEC. The Organization of Petroleum Exporting Countries also would like high oil prices, but sputtering demand and the success of fracking has produced a glut. Oil prices are down 40 percent since June. Using its market leverage, OPEC is keeping prices low just long enough to squeeze out more marginal producers. Then, it hopes, prices will rise as supply drops.

The trouble is, we may be the marginal producers. Saudi Arabia can make money at $50 per barrel, a price that would be brutal for Utah oil producers, many of whom would stop producing, as has happened in previous price dips. (The report offers two oil-price scenarios. At $92 per barrel, everything looks rosy. At $62, the authors say the transfer wouldn’t pencil without the feds giving up their lease money. U.S. oil was trading around $68 a barrel Tuesday.)

Want more risk? The report estimates that 35 percent of the feds’ cost to maintain these lands goes to fighting fires. That is based on the last 10 years’ fire expenditures in Utah. But the wildfire potential is growing in the West as the climate changes, and the state also loses the efficiencies of sharing a firefighting effort with the rest of the West. (Maybe we could contract with the feds, but then we’re right back under federal control, right?) As it is now, we call the feds when we have a fire. They come, stay until the fire is contained and never send us a bill. (We do pay for it with our federal taxes, of course, but if the land is transferred, we’ll still be paying those taxes and not getting the service.)

If none of these bad things happen, the report says Utah would not have to sell or exploit any of the lands it acquires, as critics of the transfer say it will. The Public Lands Policy Coordination Office, which oversaw the report, wrote in its summary. "The study demonstrates that this can be accomplished without sacrificing the beauty of our state, the quality of our life, or the attraction of Utah to tourists and recreationists from around the country and the world."

But don’t we already have that?