Commentary: Impact board squanders millions in opportunity costs

Brian Maffly | The Salt Lake Tribune Since 2014, the Price River Terminal in Wellington has been trans-loading oil from trucks to rail cars, opening a new path for Uinta Basin crude to reach out-of-state markets. It shipped about 7,500 barrels a day to Houston-area refiners in 2018.

The Utah Community Impact Board, which disburses mineral lease monies, met recently in Vernal. I felt it my civic duty to learn and contribute.

The main item on the agenda was a proposed railway into the Uinta Basin. As the meeting started, a handful of protesters rose and stood, in polite but obvious opposition to the railway project. I was scribbling furiously on a scrap of paper, taking notes in anticipation of speaking. I don’t relish confrontation, but I feel strongly about the railway, so I was preparing myself. What follows are the things I learned.

The proposed funding is $21 million of our public monies, which are generated by the fees that companies pay the government to allow them to drill. This money is supposed to be spent on mitigating the effects of industry. Instead, these funds would be dedicated to doing the environmental and engineering studies that would lay the groundwork for a railway.

Though there was mention of “diversification of the economy,” most of the discussion was of doubling or quadrupling the amount of oil flowing from the Uinta Basin.

As far as I can see, the $21 million is a direct subsidy to the fossil fuels industry, which has the deepest pockets on the planet. The counties and the industry clamor that the railway is necessary but, in spite of their enthusiasm, they will not put up a single dollar. This was expressly noted by the railway’s own promoters, when directly questioned by the board.

In high school economics class, I learned the concept of “opportunity cost.” If you spend resources on one thing, then those resources are not available for some other use. In this case, that $21 million could instead have been spent on sewage treatment plants, ball fields, street paving, sidewalks or fire trucks. Indeed, the first part of the meeting was approval of a whole list of such worthy projects throughout the state.

But the decision has been made that the $21 million will be poured into the money pit of the struggling, never-profitable tar sands and oil shale projects (which are the only realistic source for the quadrupled petroleum output the proponents envision). And there’s no guarantee the project will ever fly, in which case that 21 million dollars has been squandered with nothing to show for it. Classic opportunity cost.

I added up where the Community Impact Board’s millions have been going. It includes $80 million for the Seep Ridge Highway, the spiffiest drive in the state, which dead-ends at an idled tar sands mine on top of the Book Cliffs. Now, with another $21 million for these railway studies, that’s a total of $100 million gifted to the fossil fuels industry. Assistant Utah Attorney General Alison Garner was present at the meeting and informed the board that it would be a violation of federal law if the project was primarily to benefit industry. I smelled a lawsuit, possibly a successful one, against the Community Impact Board.

Also, if the railway quadruples the oil output from the basin, but the amount of recoverable oil is finite, then doesn’t that mean that we will burn through that oil in one quarter of the time? For example, rather than 40 years delivery at the current rate, the resource would only last 10 years at the expedited railway rate. Isn’t this really just “boom and bust” thinking, all over again?

As the meeting neared its end, I leaned forward in my chair in anticipation of my right to make a public comment, but the board quickly voted in favor of funding the $21 million. I was shocked, surprised and irritated. I went up to a central personage on the board and asked, “Do you mean you are going to listen only to the proponents of this obviously controversial plan, and not take public comment from a roomful of concerned people?!”

He replied that the board lets all such comment be taken by the entities they are considering funding, in this case, the Seven County Infrastructure Coalition that is pushing the project. The injustice of it all outraged me. The protesters had been standing at their seats for three and a half hours by now. The meeting broke up around them.

And oh, yes. There was one thing I never heard mentioned once: “Climate change."

Tom Elder

Tom Elder, Vernal, is a retired science teacher whose main hobby is walking in the desert.