Lots for Tots | Cover Story | Salt Lake City | Salt Lake City Weekly

January 29, 2014 News » Cover Story

Lots for Tots 

How one agency is selling off Utah in the name of the children

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“I would make that argument for the rest of the state,” Garbett says. “Protecting public land that can lead to these land exchanges is the best thing that can happen to SITLA.”


It’s this horse trading that’s given SITLA vast stretches of land in the Uintah Basin, the home of Utah’s latest boom. Bird’s speech quickens when she notes, “It is believed by those petroleum engineers that there is more oil and gas out in the basin, in this area, than in Texas, in terms of known reserves.”

Christy, too, has great expectations for SITLA’s holdings in and around Uintah County. “This may well be the Bakken clay,” he says, a reference to the formation in North Dakota that’s responsible for much of that state’s oil and gas boom.

One avenue SITLA is taking to make money in the Uintah Basin is through tar-sands development. Wildly unpopular with environmental groups, tar-sands developments often use steam, which relies on water or a solvent process, to separate the oil from the rock. The website of U.S. Oil Sands, the Canadian corporation that leased the SITLA land, says the company will separate the oil using a citrus-based solvent technique that is less water-intensive.

Even so, fears remain that tar-sands developments in Utah will sap valuable water resources from the second-driest state. According to the Canadian Association of Petroleum Producers, a group that lobbies on behalf of the tar-sands industry in Canada, where most of the world’s tar sands exist, it takes 3.1 barrels of water to produce a barrel of oil.

“It takes more energy to produce petroleum products from tar sands,” says Jerry Mansfield, SITLA’s tar-sands resource specialist. “When you expend energy, you have a bigger carbon footprint, and that’s a big deal right now.”

U.S. Oil Sands has leased 32,000 acres from SITLA in Uintah County with the intent to develop tar sands. SITLA officials say the projects could produce billions of barrels of oil.

One project, at an area known as PR Springs, has already received permits from the state’s Division of Oil, Gas & Mining and the Division of Water Quality. Mansfield says 8 percent of the royalties from direct sales of these tar sands would go to Utah’s schoolchildren.

About the only thing standing between U.S. Oil Sands and a green light for development at PR Springs is John Weisheit, conservation director at Living Rivers, which advocates for the protection and restoration of rivers and wetlands. In a lawsuit pending before the state supreme court, he’s challenged the rationale of the state permits.

Weisheit doesn’t pull punches when speaking about SITLA.

“What the schoolchildren don’t know is that [SITLA and oil companies] are turning the Tavaputs Plateau into a wasteland,” he says. “It’s destroying our children’s future, it’s destroying our air, our water. It’s not mutually beneficial. It’s not a win-win situation.”

SITLA deputy director Christy doesn’t agree. Caving to this kind of criticism, he says, would cripple his agency’s ability to build up the school trust fund. SITLA not only wants to develop these resources, he says, but also will vigorously look for more opportunities like those at PR Springs.

“We’re not shy of those kinds of opportunities; in fact, we’re very proactive to explore what kinds of opportunities might be presented in that area,” he says, adding: “If we cater to all the criticism that’s out there, I think the ultimate outcome of our ability to deliver any dollars to the education fund would be damaged drastically. Collapsing to [criticism] would ultimately paralyze our ability to do anything.”

Shut the Door
SITLA is supposed to abide by the state’s open-meetings laws, and at least most of the time, provide an avenue for competitive bidding.

But when it doesn’t feel open bidding can yield the best profit, it can shut the door and negotiate exclusively with a chosen party under a provision it calls “other business arrangements.” This is what happened with Bogart Canyon, which was leased to Anadarko Petroleum Corporation. The terms of the deal were negotiated in secret, and Anadarko was the only company courted.

Christy defends this process. “There are times you simply have to close the door and talk confidentially,” he says.

Even though Bird was instrumental in reforming the old machinery of trust lands—which, she says, involved board members “getting together the night before and deciding how they would all vote”—she defends SITLA’s recent closed-door policies.

“It should happen behind closed doors because no business can negotiate in public,” she said.

But if a negotiation took place in secret, how would the kids, or anyone else, know if a deal is in the children’s best interest?

“First of all, the schoolchildren don’t track any of this, because they’re too little to even understand about a lease and royalty or anything like that,” Bird says, finishing with a key point: “And the lands don’t belong to the public.”

While SITLA land is not technically public, much of it remains open to the public through a $700,000 annual payment from the state’s Department of Natural Resources. This payment, says Mike Styler, executive director of the DNR, keeps swathes of SITLA land open for hunting, fishing, camping and other outdoor activities. If for some reason these payments stop, Styler has no doubt what SITLA will do.

“They’re saying, absent that agreement, they can close it off and charge access,” he says.

Bird stirs when the DNR is mentioned. She says its payment is nothing short of a ripoff. She believes that private landowners generate millions of dollars through a partnership with the DNR that allows limited hunting on large patches of private land across the state.

DNR officials say the amount of money landowners make through the program is impossible to calculate, since they do not disclose how much they charge for permits on their private land, of which 2.1 million acres is enrolled. The DNR brings in $400,000 from the public permits it sells on this land.

“Does that seem fair to the schoolchildren to you?” Bird asks, noting that SITLA manages and allows public access on more acreage than the private landowners. “Does that seem like market value to you? That is not justice, it’s not right, it needs to go to court, it needs to get solved.”

Momma Bird
Whenever the SITLA acronym flies from a politician’s lips, it is quite likely that Bird’s face is what they see.

Her interest in Utah’s trust lands dates back to 1985, when she ended up as the first woman on the state’s land board. From there, she helped form a legislative task force, which in 1995, after three years of study, formed SITLA.

In order to avoid the type of political corruption that had dominated trust lands up to that point, SITLA was fashioned as a quasi-governmental agency, meaning that it could operate with a level of independence other government bodies lacked. This was important, Bird explains, because in order for SITLA to manage land across the state, it needed to be exempt from outside influence.

Bird says a key part of this structure was instituting incentive-based pay for SITLA employees and managers, a practice that continues to this day for regular employees. SITLA officials say management bonuses ceased in 2006, after a legislative audit criticized the agency for its lucrative pay schemes. The audit found that SITLA doled out $2 million in bonuses between 1997 and 2005, $1 million of which went to senior management. In 2005 alone, it paid out $395,000 in bonuses.


The audit also found that while SITLA was turning profits during this time, and using these figures to justify the bonuses, its benchmarks for issuing extra pay were set woefully low, making it all but impossible not to reach full-bonus status.

Bird says she had no problem whatsoever with the bonuses, citing SITLA’s ever-growing contributions to the school trust fund. “What’s the big deal about $300,000 in bonuses if that keeps people motivated and coming up with new ideas and new ways to make money?” Bird asks.

During the last fiscal year, SITLA racked up $9.5 million in expenditures, while generating $106.4 million in income, according to its balance sheets.

Offering bonuses was one way in which the guts and gears of SITLA were built to make it a money-making machine.

“SITLA’s success far exceeded what we had ever envisioned,” Bird says. “I knew those lands could make more money. I think we’ve only just begun to see how much it can make.”

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