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Weber edp News

September 2014

Energy: Utah's Greatest Economic Opportunity

Could there be a greater economic opportunity for Utah than energy development in the Uintah Basin? Balanced, smart development of the Basin's massive energy resources could create thousands of Utah jobs, bolster every segment of the economy and improve the quality of life for everyone in the state. According to general estimates, there are 550 million barrels of oil equivalent in existing reserves and undiscovered endowments that are economically viable for production in the Basin, and 18,000 billion cubic feet equivalent of natural gas in existing reserves and undiscovered endowments that are economically viable for production. Meanwhile, the development of unconventional oil, or non-drillable oil, could quadruple the Uintah Basin's oil production output in the next thirty years.

That excites energy developers and government leaders focused on the economy, but not many conservationists.

“This can be a game-changer for Utah,” said Uintah County Commissioner Mike McKee during the Uintah Basin Energy Summit, where more than 750-800 industry, business, education and government leaders gathered in Vernal to talk about the opportunities, challenges and concerns regarding the massive energy resources in the Uintah Basin. “At the end of the day, we have billions of dollars at stake for Utah. The sky's the limit on what we can do.”

To be sure, the impact of the Basin's energy development on education funding alone could be enormous, if a reasonable portion of Utah's school trust lands could be traded and consolidated in energy-rich areas of the Uintah Basin.

However, energy development in the Basin is a combustible subject. Utah government and business leaders want to develop energy resources in the Uintah Basin. On the other hand, environmental groups want more wilderness and other conservation designations in pristine areas of the state. Meanwhile, thousands of acres of state school trust land sections are scattered between BLM lands, including many in wilderness study areas and other untouched landscapes worthy of strong environmental protection.

And neither side of the aisle wants to give an inch. But as Lt. Governor Spencer Cox told the energy summit's audience, “This is not a zero sum game. It is not all or nothing. Too often, because of the shrill voices on both sides, we tend to view it as such and we make a colossal mistake when we do.”

Cox went on to say Utahns would be fools to not take advantage of the Uintah Basin's energy resources, but fools also “if we don't protect those incredible natural vistas; those incredible natural beauties that we have in this state.”

The key to both development and protection, he said, is innovation and collaboration.

“If you believe that the future of our country and the future of our globe depends on the innovation of new energy sources, and this idea of renewable energy, you are damned right it does,” Cox added. On the other hand, he said, “If you believe that we will get there by destroying traditional energy sources; if you believe we will get there by government over-reach and regulation, by government picking winners and losers, you are damned wrong.”

Further, Cox said development of existing resources would serve as a bridge to the development of the state's clean, renewable energy resources. “Whatever you do, please do not mistake our enthusiasm for energy development and what we are trying to accomplish here as an excuse to cut corners and not follow the rules. We will protect the environment. That is important to the State of Utah and important to the citizens. We are in this together. We have to be smart together.”

Two significant barriers make it difficult to develop the Basin's resources and realize its full economic potential. One is the lack of transportation facilities to export energy products. According to a study by the Utah Department of Transportation, the Uintah Basin could lose nearly $30 billion in energy production over the next three decades due to transportation constraints.

Another barrier is the highly complex environmental, land use, regulatory and land ownership challenges. Much of the land in the Basin in owned by the federal government. Despite the fact that Utah is as resource-rich as states like North Dakota and Texas, Utah can't compete because in most other states almost all of the land is private or state-owned.

While both barriers are complex and difficult, they can be overcome. Uintah County Economic Development Director Tammie Lucero said collaborative processes are underway to help the Basin achieve its full potential while also focusing on the transportation issues, air quality and environmental concerns.

For example, the Seep Ridge road is currently being paved to the Uintah County line, which will help eliminate dust clouds. Meanwhile, Grand County officials have requested assistance from Uintah and Duchesne officials to study the feasibility of a transportation corridor through the Book Cliffs to I-70. A paved road there would eliminate massive amounts of dust, greatly improve air quality and provide a southerly route to move product out of the Uinta Basin.

Lucero says preliminary studies are also underway regarding pipeline and rail alternatives out of the Uintah Basin. Both alternatives would reduce truck traffic while bringing product to refineries on the Wasatch Front.

Regarding the land use issues, battles have raged for decades. However, a Public Lands Initiative led by Congressman Rob Bishop holds great promise. The initiative is in the midst of a collaborative process that includes participants from local government leaders in rural counties, conservation groups, recreation and sportsmen groups, energy developers, the governor's office, Native American tribes, all of Utah's congressional offices and the Utah School and Institutional Trust Lands Administration.

“We have a singular opportunity with Congressman Bishop's plan,” said Cox. “It is a little bit of a long shot, but I believe if we continue to negotiate in good faith we can find a balance.”

The initiative seeks to keep all sides happy by trading lands, agreeing to energy development in areas of the Uintah Basin and designating more wilderness and establishing other conservation protections in pristine areas. Each side gets what it wants. Best of all, if school trust lands can be traded and consolidated in energy-rich areas, then significant revenue could be pumped into Utah's school system.

The ideal outcome for environmental groups would be designation of significantly more wilderness and conservation areas, including some land currently designated as wilderness study areas, along with some resolution of RS2477 road controversies.

The ideal outcome for state and local governments and business groups would be Congressional designation of an “energy zone” in the Uintah Basin where school trust lands could be consolidated and some of the onerous federal environmental regulations and lengthy permitting processes for energy development relaxed.

It will be difficult to achieve these outcomes, but the possible benefits make the effort worthwhile. Congressman Bishop would like to introduce a bill in Congress sometime in January 2015. He'll need support and encouragement from all levels of Utah government and business when he does.

“We have some special places in Utah, including in Uintah County, that everyone agrees should not be developed,” said McKee. “On the other hand, we have world-class energy resources in some rather desolate, barren areas that should be developed to produce jobs, school revenue and an improved economy. Let's create wins for everyone.”

Some information in this story was provided by UtahPolicy.com, with permission