DOE OSTI2012
Utah is rich in oil shale and oil sands resources. Chief among the challenges facing prospective unconventional fuel developers is the ability to access these resources. Access is heavily dependent upon land ownership and applicable management requirements. Understanding constraints on resource access and the prospect of consolidating resource holdings across a fragmented management landscape is critical to understanding the role Utah’s unconventional fuel resources may play in our nation’s energy policy. This Topical Report explains the historic roots of the “crazy quilt” of western land ownership, how current controversies over management of federal public land with wilderness character could impact access to unconventional fuels resources, and how land exchanges could improve management efficiency. Upon admission to the Union, the State of Utah received the right to title to more than one-ninth of all land within the newly formed state. This land is held in trust to support public schools and institutions, and is managed to generate revenue for trust beneficiaries. State trust lands are scattered across the state in mostly discontinuous 640-acre parcels, many of which are surrounded by federal land and too small to develop on their own. Where state trust lands are developable but surrounded by federal land, federal land management objectives can complicate state trust land development. The difficulty generating revenue from state trust lands can frustrate state and local government officials as well as citizens advocating for economic development. Likewise, the prospect of industrial development of inholdings within prized conservation landscapes creates management challenges for federal agencies. One major tension involves whether certain federal public lands possess wilderness character, and if so, whether management of those lands should emphasize wilderness values over other uses. On December 22, 2010, Secretary of the Interior Ken Salazar issued Secretarial Order 3310, Protecting Wilderness Characteristics on Lands Managed by the Bureau of Land Management. Supporters argue that the Order merely provides guidance regarding implementation of existing legal obligations without creating new rights or duties. Opponents describe Order 3310 as subverting congressional authority to designate Wilderness Areas and as closing millions of acres of public lands to energy development and commodity production. While opponents succeeded in temporarily defunding the Order’s implementation and forcing the Bureau of Land Management (BLM) to adopt a more collaborative approach, the fundamental questions remain: Which federal public lands possess wilderness characteristics and how should those lands be managed? The closely related question is: How might management of such resources impact unconventional fuel development within Utah? These questions remain pressing independent of the Order because the BLM, which manages the majority of federal land in Utah, is statutorily obligated to maintain an up-to-date inventory of federal public lands and the resources they contain, including lands with wilderness characteristics. The BLM is also legally obligated to develop and periodically update land use plans, relying on information obtained in its public lands inventory. The BLM cannot sidestep these hard choices, and failure to consider wilderness characteristics during the planning process will derail the planning effort. Based on an analysis of the most recent inventory data, lands with wilderness characteristics — whether already subject to mandatory protection under the Wilderness Act, subject to discretionary protections as part of BLM Resource Management Plan revisions, or potentially subject to new protections under Order 3310 — are unlikely to profoundly impact oil shale development within Utah’s Uinta Basin. Lands with wilderness characteristics are likely to v have a greater impact on oil sands resources, particularly those resources found in the southern part of the state. Management requirements independent of lands with wilderness characteristics far overshadow the challenges posed by wilderness issues. Wilderness character issues aside, a need to improve management integration remains. In researching past efforts to manage across the fragmented landscape we found that unilateral actions have been deeply divisive and engendered distrust among those impacted by the action. This distrust can linger for decades. Collaborative efforts, whether intended to protect lands, foster development, or do both, can represent an attractive alternative to unilateral action. Such collaborative efforts are more likely to succeed when they respond to strong incentives to act, evidence widespread involvement and support, and benefit from a committed champion. Projects are all but certain to fail where participants overreach or one of these elements is missing. For more than three decades, the state and federal government have cooperatively pursued land exchanges in order to “block up” isolated state trust lands and eliminate inholdings. These efforts can advance both conservation and development objectives, and are generally conducted in conjunction with efforts to protect extraordinary federal lands. Congress recognized the value of such exchanges and, as part of the Energy Policy Act of 2005, directed the Department of the Interior to pursue land exchanges as a means of facilitating environmentally responsible oil shale and oil sands recovery. But land exchanges are not without their challenges. Federal law requires equalizing the value of the lands and resources to be exchanged, and various means of equalizing value have been attempted. More flexible approaches have a higher likelihood of success, but are often criticized as resulting in an economic windfall for one party. Today challenges associated with appraisal and valuation stand as the most significant obstacles in the way of large-scale exchanges. Greater reliance on revenue sharing provisions that prevent an economic windfall to one party and avoid challenges inherent in valuing oil shale and oil sands resources may mark a promising path forward. The success or failure of these efforts could profoundly impact both the prospect of unconventional fuel development and wilderness character protection.
04 OIL SHALES AND TAR SANDS↗