Wednesday, July 23, 2014

Political tension a constant companion to Utah's oil and gas fields

By Amy Joi O'Donoghue, Deseret News

Published: Sun, Jan. 12 9:41 p.m. MST

 Sierra Club's Tim Wagner works in his office in Salt Lake City Friday, Jan. 10, 2014.

Sierra Club's Tim Wagner works in his office in Salt Lake City Friday, Jan. 10, 2014.

(Jeffrey D. Allred, Deseret News)

Second in a two-part series

SALT LAKE CITY — The political landscape of oil and gas development in Utah is rife with rhetoric and teeming with tension, with the foes on either side destined to seldom, if ever, agree.

Tapping Utah's rich oil and gas resources either occurs at a woefully slow and ineffectual pace that is driving away industry, or it happens in a recklessly pell-mell fashion that sacrifices the environment.

Utah Gov. Gary Herbert, his energy adviser Cody Stewart and a bevy of political conservatives believe control of those resources that sit on federal lands could help fund the state's struggling education system and an entire slate of other pressing needs.

They need only look to North Dakota — thriving with the nation's No. 1 economy because of the Bakken oil boom — to argue that federal land management policies are stifling Utah's "resource" potential.

Two years ago, Herbert and the Utah Legislature passed a law to try to get control of those lands. The Transfer of Public Lands Act, which demands the federal government cede title to certain lands by Dec. 31, 2014, is a political movement that is also taking hold in other Western states that agree the federal process is painfully inefficient.

"We have 11 projects proposed in Utah that are in the environmental analysis stage with the Bureau of Land Management," said Kathleen Sgamma, vice president of governmental affairs and public relations, which represents independent oil and gas producers in the West.

"If we give government the benefit of the doubt, it should take about three years to get through the environmental analysis stage. We have projects over that three-year mark."

Sgamma said that as a result, industry is directing its attention to state-owned or private lands or moving out of Utah altogether.

"If you can't move forward in Utah on federal lands, you are going to put your resources in North Dakota where there are no federal lands."

For Tim Wagner, who runs the Our Wild America Campaign for the Sierra Club environmental group in Utah, that's just fine.

"The bottom line is whether it is public or private dollars, any dollar spent on any kind of fossil fuel development is a dollar that is not invested in a clean energy future," he said. "Utah is making a huge mistake in driving the state toward a policy that continues its addiction to fossil fuels."

Wagner said the public lands campaign of the Sierra Club is aimed at keeping "dirty energy" in the ground.

"It is a huge mistake for Utah and the country in terms of where it should be going," he said. "At some point it is going to run out."

The Sierra Club is among multiple groups lined up to oppose development of Utah's oil sands and its oil shale resources. The world's largest deposits of oil sands are found in eastern Utah, and the Utah Geological Survey estimates the state sits on 77 billion barrels of recoverable oil from its portion of the Green River Formation.

Those unconventional resources could deliver Utah its own North Dakota-style boom — but most of those resources sit on federal or state-owned lands, which give rise to legal challenges that tie up extraction for years if not extinguish it altogether.

"The delays are harmful but effective," Stewart said. "It dries up capital and it dries up interest."

The Sutherland Institute, a conservative public policy think tank, released a report last year noting that federal land management policies cost the West billions of dollars in lost revenue and destroyed the prospect for more than 83,000 jobs.

As an example, Stewart and others point to a company's decision to sell its West Tavaputs natural gas field last year in Carbon County as a move made in part because the federal permitting process took too long, and market conditions changed.

"The market flipped, but it didn't help them that it took so long," Stewart said. "The system is slow and bloated and cumbersome."

Still, in 2012, President Barack Obama was boasting of domestic oil production that surpassed an all-time high set in 1998 — reiterating that his "all of the above" energy policy was not unfriendly to fossil fuel extraction.

John Baza, director of the Utah Division of Oil, Gas and Mining, said it is easy to use numbers to one's advantage.

"That claim is absolute, but that production is coming from places like Texas and North Dakota that are principally private lands."

Sgamma points out that from 2008 to 2012, federal permits were down overall in the West. In Utah, they dipped 10 percent but state permits jumped from 416 to 1,256.

Kent Hoffman, the deputy state director of the BLM, said the federal review process takes longer than the state because it is more stringent and protective of the environment.

"The state has some pretty good fundamental regulations that they bring to bear in a fairly timely fashion," he said. "We take a lot longer. … The sheer complexity of the process takes that long."

That complexity opens the door to challengers of energy development, he added.

"With that complexity comes hundreds if not thousands of opportunities for our detractors, our watchdogs to find opportunities to take us to appeal or to court. We may do 20,999 things correctly in a complicated review, but one 'aw, heck' removes all the 'atta boys.'"

But critics say the arduous process is more about just protecting the environment; it is about implementing an anti-fossil fuel agenda where possible.

"The overlords in Washington are not friendly to extraction in Utah," said Jeff Hartley, an industry lobbyist. "There are no political reasons for them to be, and a lot of political reasons why they would be less than friendly. The reality is that Obama won and he runs the executive branch."

Hartley said if the state were in charge of the resources like oil sands and oil shale, the future would look different for Utah.

"If the efforts of (the Transfer of Public Lands Act) were successful, you would still have these environmental laws that would be applied such as the Clean Air Act and the Clean Water Act," he said. "But what you would also have is a state permitting agency that is in the business of acting like a partner as opposed to federal agencies who act like your antagonist who resist giving you a permit."

Steve Bloch, an attorney with the environmental group Southern Utah Wilderness Alliance, said environmentalists and federal agencies are often the only speed bump on the path of energy development that cares little for environmental protections. He adds that he doesn't see anything wrong with a process that is designed to help the BLM be a methodical caretaker of that environment.

"Could it be faster? Probably. But what would we lose by trying to make it faster?"

He also rejects the notion that the federal oil and gas leasing system needs to be fixed for the betterment of industry.

"There are hundreds of millions of acres that are under lease but not in development and hundreds of drilling permits that the BLM and the state approve on an annual basis that are never acted on. It makes good copy to say that the federal system is broken and the sky is falling," Bloch said.

Email: amyjoi@deseretnews.com, Twitter: amyjoi16

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1. sherlock holmes
Eastern, UT,
Jan. 12, 2014

Count this article a win for the enviros. Front page picture of an office in SALT LAKE with a lawyer-like person sitting in it.

The political tension discussed is in the large cities. Rural legislators and officials know who to make decisions and manage affairs in their areas. If the big city folks would stay out of it, things would happen just fine. Basin officials spend too much of their time trying to get $$ that are needed back into their communities. The dollars they are chasing seem to get stuck in SLC. The irony is that the $$ they are trying to get are energy revenues actually generated from their own counties.

This is not to say that Gov Herbert has not been supportive. Local officials have appreciated the attention he has given to rural issues.

Still, we wish the SLC enviros would stick with trying to get the air cleaner along the Wasatch Front(a audible objective) and let rural communities alone.

2. Beowulf
Portland, OR,
Jan. 13, 2014

Isn't it interesting that the Sierra Club person interviewed did not say anything about the possibility of local environmental dislocation caused by oil extraction. Instead he bssically said that oil and gas IN ITSELF is bad. This is reckless nonsense that ignores the reality of a world economy fueled by fossil fuels.

Does the Sierra Club person drive a car? Does he heat his home? What are we supposed to do until alternative energy sources become viable, walk around and freeze to death?

Don't let such people steer Utah resource extraction. They have already succeeded in California, where vast oil reserves exist offshore, but cannot be accessed because of the Sierra Club and such people.

3. leavingRparty
boise, ID,
Jan. 13, 2014

Most Utahn's believe in God and Country, in that order. God gave us this country and the endowed state of Utah. He also gave us the rich resources such as oil, gas, coal. Not to use them is throwing his gifts in His face. Of course land reclamation and cleaning up after ourselves is imperitive and there are laws governing those. Eastern Utah, yes, but also Southeastern Utah, would give upward mobility to to smaller communities as well. And while I am at it: I laugh when I see documentaries with a lone man on a horse (with a camera crew behind him) exclaiming how imperative it is that he ride his horse into pristene lands where he doesn't see another living soul. Utmost selfishness! The ultra wealthy who have hundreds of acres to himself can also rail against coal production in Carbon County.

4. JWB
Kaysville, UT,
Jan. 13, 2014

What is interesting, is that the State of California environmentalists have the Delta power production site, utilizing coal, which they consider the worst of pollution. They want their cake and eat it too. They appear to be arbitrary and capricious on their own agenda. They want to be the last person to move in and don't let anyone else want the benefit of this land that was given for man to benefit from. The creation process brought various forms of energy and not the exclusion of one of those sources. There is a balance due to public interest but one of those sides wants all or nothing. It is sad that it appears to be political with Washington, D.C. in control and not the balance for the good of the people. There is a balance and the government is not serving the people. People complain about lobbyists but there is so much political in that hip pocket type of process that the society is on a binge from PACs, lobbyists, and special interests instead of for the people the Government is supposed to be supporting. Money = power along with politics of individuals, not the people as a whole.

5. tophat
utah, UT,
Jan. 13, 2014

I assume that Tim Wagner walked to work and for other trips? Does he think his car will run on magic?