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Energy income

Published September 18, 2012 1:01 am

Utah deserves a greater share
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah and the American Southwest have what the world wants: energy. There's no reason why the taxpayers and the students of the state shouldn't get more benefit from whatever types and amounts of energy prove economically viable and environmentally safe.

We have energy in conventional forms — oil and natural gas. We should have it in renewable forms — solar and wind. And some people are still clinging to the vain hope that we will have it in unconventional forms — tar sands and oil shale. Whatever resources are exploited on public land, the royalties charged to those doing the exploiting should be just as high as the market will bear. And more of those proceeds should stay in the state.

That's the message of The Wilderness Society and the poll it recently released showing that, across the West, people of all political persuasions favor using federal land to create wind and solar energy installations. And they also favor treating the royalties generated from those projects the same way royalties from oil and gas leases are treated, specifically by sharing that revenue with the affected states.

It's only fair.

The reason the feds share income from oil and gas development on their land with the states is that the states bear some burden for having those activities within their borders. There are roads, heavy construction equipment, air pollution. Often, the population of small towns will swell markedly in a short time, putting a huge strain on public services from schools to prisons.

The same thinking should apply to royalties from renewable energy. But current law rakes all of the royalties for such projects directly into federal coffers. Wind and solar don't produce air pollution. But they do require construction and maintenance and otherwise stand to change the character of the areas they come to. A local share of the take is only fair.

Meanwhile, there is a lot of room for increasing the royalties the state — specifically the Utah School and Institutional Trust Lands Administration — draws from the oil and gas leases on land it controls. As activists have noted, the tar sand and oil shale projects SITLA is dreaming of would only draw royalties on the order of 5 percent to 12.5 percent, compared to oil and gas royalties of 16 percent. There's no reason those percentages shouldn't be higher. Perhaps much higher.

If such a deal frightens off drillers, then one has to wonder whether their leases are really viable. If it doesn't, we'd have to conclude that Utah has been selling itself too cheap for a long time.