Energy development in the Uintah Basin is clearly Utah’s greatest economic opportunity. Smart, but aggressive, development of the region’s massive energy resources can create tens of thousands of jobs, bolster all segments of Utah’s economy, dramatically increase school funding, and improve quality of life for all Utah citizens.
This is not a minor matter. Opportunities like this come around only once in a generation. All areas of Utah’s economy would benefit. The impact in education funding, alone, could boost Utah from the bottom of the states in per-pupil education spending.
If a reasonable portion of Utah’s school trust lands could be traded and consolidated in energy-rich areas of the Uintah Basin, hundreds of millions of additional dollars could flow into Utah’s public schools -- making a big difference for Utah’s school children.
This is an opportunity that should have the highest priority in the Governor’s Office, the congressional delegation, the Legislature, the Attorney General’s Office, the education community, county governments and city governments. Every resource possible should be aggressively deployed to overcome the barriers to smart energy development.
“This can be a game-changer for Utah,” said Uintah County Commissioner Mike McKee. “We have 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.”
However, two significant barriers are making it difficult to develop these resources and realize the full economic potential of the region. The first is lack of transportation facilities to export energy products. All product from the Uintah Basin simply cannot be moved in supertanker trucks using U.S. Highway 40. It is dangerous, expensive, and Heber City and other cities can’t handle hundreds of large trucks rolling through their main corridors every few minutes. Already, some 250 supertanker trucks rumble through Heber City every day.
Various products from the Uintah Basin need direct and convenient access to national and even international markets. Hauling everything to Salt Lake City via Highway 40 is quickly becoming a major bottleneck.
The second barrier to development in the Uintah Basin is highly complex -- the environmental, land use, regulatory, and land ownership challenges. Because so much of the land in the Basin in owned by the federal government, obstacles to development are numerous. Even though Utah is as resource-rich as North Dakota and Texas, it’s hard to compete with those states where almost all land is private or state-owned. Even though the United States is experiencing an energy boom, with record levels of production, extraction on federal lands has actually declined because of slow federal permitting processes and environmental regulations.
Each of these barriers is extremely difficult, but each can be overcome. Collaborative processes are already underway to help the Uintah Basin achieve its full potential, but more focus on problem-solving is needed statewide. Overcoming the two barriers will require the attention and support of citizens and leaders on the Wasatch Front, not just in the Uintah Basin. More Utahns need to understand the vast economic potential of the Uintah Basin and how all parts of the state can benefit.
Barrier 1: Transportation Bottlenecks
To overcome the transportation barrier, some combination of road/highway improvements, rail, and pipeline will be required. Uintah Basin product must be moved to local, national and global markets. U.S. Highway 40 is already overly-congested, and trucks are an inefficient and costly way to move energy products. Major transportation improvements and new transportation modes will be expensive and will face environmental and permitting challenges, and likely lawsuits. But the process must go forward as rapidly as possible. Already, studies have been commissioned by state and local leaders to determine how much product will need to be moved over the next 20 years, and what modes of transportation will be required to move it.
A conservative study by the Utah Department of Transportation (UDOT) showed that the Uintah Basin could lose nearly $30 billion in energy production over the next three decades due to transportation constraints.
Besides the energy production loss, the UDOT study says, “Opportunity costs associated with the production loss . . . include tax revenues, private rents and royalties, jobs, transportation user cost savings, and environmental and safety effects. These result in a present value of more than $10 billion of net effects and almost 27,000 full-time-equivalent jobs.”
U.S. 40 needs significant improvements. In addition, to prevent permanent dust clouds, a paved road is needed between the eastern Uintah Basin and I-70 in Grand County. The Seep Ridge road is currently being paved to the Uintah County line. Grand County officials have requested assistance from Uintah and Duchesne officials to conduct a study to determine the feasibility of a transportation corridor through the Book Cliffs to I-70. Leaders agree that a paved road would eliminate massive amounts of dust and greatly improve air quality, providing a southerly route to move product out of the Uinta Basin.
Preliminary studies are also underway regarding rail corridor alternatives out of the Uintah Basin. Environmental impact studies will be required before proceeding with a rail line.
Finally, various proposals for pipelines are being considered, including some that would reduce truck traffic within the Uintah Basin, and some that would bring product to refineries on the Wasatch Front. Tesoro, a Salt Lake oil refinery, has proposed one such pipeline.
All of the transportation improvements face environmental and funding challenges. That’s why it’s crucial for Utah leaders to unite in supporting these projects and accelerating their construction.
Barrier 2: Land Ownership/Regulatory/
It is obviously very difficult to develop energy resources on federal land. Federal policy in recent years is biased against development. Myriad regulatory and environmental obstacles exist, and the threat of lawsuits by environmental groups always looms over any energy project on federal land. “We’ve been fighting land use battles in Utah for decades,” said Commissioner McKee.
However, hope exists for a possible truce that could streamline energy development while also providing big wins for protective land designations desired by environmental groups. Thanks to a Public Lands Initiative led by Congressman Rob Bishop, a collaborative process that holds great promise is moving forward involving all stakeholders in eastern Utah. Participants include 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.
“Once in a while a window opens,” said McKee. “That window is open now, and I think it can be done.”
The effort is bottom-up, not top-down, and all stakeholders have been invited to participate. It is a delicate collaborative effort and could easily fall apart if key participants pull out. Any agreement will have to win approval in the Republican U.S. House of Representatives, a closely-divided Senate, and be signed by a Democratic president. Therefore, a true compromise will be required, with no one getting everything they want, but everyone getting some of what they want.
The Big Idea keeping the various factions together and talking is simple: Utah government and business leaders want to develop energy resources in the Uintah Basin. 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 on BLM lands, including many in wilderness study areas and other untouched landscapes worthy of strong environmental protection.
So by trading lands, by agreeing to energy development in the sagebrush and juniper hills of the Uintah Basin, while designating more wilderness and other conservation protections in pristine areas, each side gets what it wants. And if school trust lands can be traded and consolidated in energy-rich areas, then significant revenue could be pumped into Utah’s school system.
“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.”
While all sides agree the concept has promise, it will become very difficult and complicated when lines are drawn on maps. “The devil is in the details,” said McKee. Land designation proposals are coming from the bottom up, from county commissions, environmental groups, and others. Many proposals will conflict with each other and compromises will have to be reached at the local level and in Congress.
Mechanisms must also be worked out so that counties that give up land for wilderness and other conservation designations, but don’t enjoy rich energy reserves, can share in the royalties and income from energy-rich counties.
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 could be somewhat 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 needs to have support and encouragement by all levels of government and business in Utah.
No “Energy Sacrifice” Area
Uintah Basin leaders and citizens have no interest in dealing with a boom/bust economy or sacrificing their quality of life. “We’re a lot more than an oil boomtown,” said McKee.
Along with developing energy, leaders are improving infrastructure, investing in top-notch educational opportunities, developing arts, cultural and medical facilities, a convention center, and expanding a booming travel, tourism, and recreational industry. The region has an excellent library, hospital, recreation center and senior citizens facilities. Commissioner McKee said the Uintah Basin is more diversified than people realize, with strong agricultural and tourism industries.
“We are the gateway to the high Uintas, Flaming Gorge, the Green River, and Dinosaurland, said Adam Massey, president of the Vernal Chamber of Commerce. “We have a well-funded travel and tourism group. Our motels are almost always full. It’s a great place to visit and enjoy the outdoors.”
Unemployment in the Uintah Basin is under 3 percent. Young people with technical training out of high school can make $28 an hour to start. The region has excellent technical training facilities for truck driving, welding, energy technology and other fields. “There are always growing pains,” said Massey. But we’ve worked hard to prepare for growth and we’re handling it well. Our children have opportunities to stay here and get a good job.”
The region’s biggest asset is its leadership. Mayors, county commissioners, transportation officials, economic development leaders and business leaders are experienced, wise and practical. “We can be smart about growth and development,” McKee said. “We can choose to become whatever we want to become. Our quality of life is our most precious asset and we will fight to protect it.”
Statewide Support Needed
Uintah Basin leaders are hoping to attract the attention of leaders statewide to create a unified front on energy development and environmental protection. “This is not just a Uintah Basin issue,” said McKee. “You’d be surprised at the number of Wasatch Front businesses that provide services and products to this industry. An awful lot of Wasatch Front jobs are dependent on energy development in the Uintah Basin.”
It is a once-in-a-generation opportunity for business leaders, political leaders, education leaders and leaders of environmental groups to come together to ensure a strong economy for Utah, and protection of Utah’s wild, pristine and beautiful areas.