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Utah Considering Lawsuit in Attempt to Reclaim Federal Lands

Utah is gearing up for a potential legal battle with the federal government over its demand that more than 30 million U.S.-owned acres be transferred to its control, as legislators consider a lawsuit that would argue the state is better suited to manage public lands.

It wouldn't be the first time a state has fought to reclaim land controlled by the federal government. But critics of the effort say it's a gamble that risks costly litigation with little likelihood of success, considering that past arguments by other states were deemed unconstitutional. 

Similar legal arguments from western states were unsuccessful in the 1970s and 1980s during a period referred to as the Sagebrush rebellion. In recent years, however, Arizona, Wyoming, New Mexico, Colorado, Nevada and Idaho have all either enacted, tried to pass or explored legislation asking the federal government to turn over land it controls.

Thus far, Utah is the only state currently considering litigation. The Utah attorney general’s office has begun drafting a lawsuit, but is waiting to see what other action may be taken at the state or federal level before it proceeds.

Supporters of the Utah push, which is being spearheaded by Republican state lawmakers, have grown weary of what they deem federal overreach. They claim billions in revenue from tourism, recreation and natural resources -- particularly oil and natural gas -- is being lost to Washington, DC.

The threat of a lawsuit came after the federal government failed in December to meet a deadline the state set with HB 148, the Transfer of Public Lands Act passed in 2012, for the United States to turn over 31.2 million acres of land now mostly controlled by the Department of Interior’s Bureau of Land Management (BLM) and the U.S. Forest Service.

"We appropriated several million dollars to continue to pursue this action through litigation if need be,” said Utah state Rep. Ken Ivory, a Republican who sponsored HB 148. “We continue to hope the federal government will offer the statehood terms it has with practically all states east of Colorado.

“This so-called deadline was on the order of a timeline that said 'we need you to honor our statehood terms and treat us equally as a state in our republic.' They've chosen to ignore that."

The land the state seeks represents about 60% of its entire land area, according to a study by Utah State University. Ivory said additional revenue the state could generate from recreation, tourism, and especially through royalties on oil and gas leases, could go a long way in helping to fill voids in the state budget.

If commodity prices were to stabilize, the Utah State study released early last month, and commissioned with the passage of HB 148, noted that royalties from oil and gas leases on public lands alone could fund the nearly $300 million annual costs to manage the land.

According to the Utah Division of Oil, Gas and Mining, oil production, particularly in the Uinta Basin, continued an upward trend in 2013, when operators produced more than 34.9 million bbl of oil, an increase of 15.7% from the previous year. Ivory acknowledged that natural resources and increasing oil production have factored into the state's recent push to reclaim federal lands.

The BLM manages 700 million acres of mineral rights across the country. According to its records, at the end of 2014, nearly four million acres were under lease for oil and gas development in Utah.

Interior Secretary Sally Jewell "has made it clear that it's a waste of time and resources for Utah to debate about the state's takeover of public lands," spokeswoman Jessica Kershaw told NGI's Shale Daily. "Rather, she's stated that a more constructive discussion should focus around how state and federal partners can work together on the thoughtful management of public lands."

Indeed, Utah and other western states receive billions of dollars in economic benefits from public lands. A 2014 BLM report indicates that oil and gas operations, coal mining, recreation and timber sales generated $8.6 billion in economic output for Utah.

Critics of the state's push agree with Jewell. An analysis by the University of Utah released last year concluded that the state "has no legal right to the land it demands, and the federal government has the constitutional authority to retain lands in federal ownership. The federal government gave western states 70 million acres of public land, and newly admitted states explicitly disclaimed all rights to additional land." Others, such as the Southern Utah Wilderness Alliance, say the effort is a "land grab" and a waste of taxpayer dollars.

Public land laws came with the settlement of the West. When the United States acquired those lands, Congress sought to dispose of them with sales or grants so the territories could be converted into states. Enabling acts were established to set the conditions of statehood, which Utah earned in 1896.

Ivory, an attorney, said the state has a legal claim to public lands through the Utah Enabling Act. Republican Gov. Gary Herbert signed HB 148, and he told an industry regulatory conference in October that he would also be pushing for the state's regulatory primacy over oil and gas operations because federal oversight creates a competitive disadvantage (see Shale DailyOct. 30, 2014).

"We're pretty smart people in the states; we understand our backyard better than anybody," he said then. "We have regulators in the state being overseen by regulators. Time is money, and it causes operators to go somewhere else” instead of developing assets in Utah.

 The Western Energy Alliance, which represents producers in six states, agrees with Herbert and said the BLM “should follow the example” of the U.S. Environmental Protection Agency, “which already delegates regulation of air and water to the states,” said Vice President of Government and Public Affairs Kathleen Sgamma.

“Utah and other western states predominated by public lands are at a disadvantage compared to eastern states,” she said. “The  additional red tape on federal lands means that projects that take a year and a half on private lands often take over five years. We have many examples of projects in Utah that have been stalled for years waiting for the federal government to act.”

For now, Ivory said a lawsuit is only one option. First, lawmakers will try to increase support through public awareness and work on the public lands issue through negotiations with the state's congressional delegation. It also plans to explore additional legislation through committee meetings and public hearings. 

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