In 1948, a single well drilled southeast of Vernal in the Uinta Basin became Utah’s first significant commercial petroleum operation.
Since then, the oil and gas industry in the Beehive State has grown to account for one of every nine barrels of oil produced in the Intermountain West and one out of every 100 barrels nationally. The industry is a significant contributor to Utah’s economy, adding about $7.2 billion to the state’s overall gross domestic product and more than 32,000 Utah jobs.
But recent federal actions threaten this core industry. On Day 1 of his administration, President Biden ordered an indefinite “pause” on all oil and gas leasing on public lands along with a 60-day suspension to conduct the environmental analyses necessary to approve oil and gas operations on previously leased lands. He also mandated all federal agencies to consider suspending, rescinding and revising all federal actions that contribute to greenhouse gas emissions.
Some argue that a freeze won’t have a lasting impact in Utah, but the facts say otherwise. In addition to raw economic stimulus and job creation, oil and gas royalties earned from public lands support state and local governments and fund the Community Impact Board (CIB), which supports transportation, water, sewer and health and public safety projects all across the state. In 2019 alone, CIB received $36.6 million from energy and mineral royalties.
In addition, local refineries process oil which is pumped and shipped by local labor, thereby meeting Utah’s growing demand for gas and diesel fuel in an economically and environmentally efficient manner. Because Utah oil is refined where demand is highest, no need exists for long distance shipping, reducing unnecessary costs and carbon emissions. Utah refineries provide an additional 19,000 Wasatch Front jobs; they also provide locally produced jet fuel to Hill Air Force Base and the Salt Lake International Airport, both critical to Utah’s urban economy, transportation network and our national defense.
Utah has a compelling interest to meet its most basic needs, such as heating and transportation. Petroleum-based plastics and synthetics are major components of Utah’s consumer goods, recreation industry and textiles, and 80 percent of Utah homes are heated with clean natural gas. On the automotive side, transitioning away from leaded gas, adding ethanol, and transitioning to Tier Three gasolines demonstrates that innovation helps meet today’s energy consumption challenges.
Some organizations aim to eliminate oil and gas exploration on public lands. But forcing oil and gas development to foreign lands will not reduce Utah’s dependence on petroleum-based products. Rather, it merely incentivizes exploration and development on foreign lands with less oversight and fewer environmental regulations.
If prolonged, Biden’s “pause” could cripple the funding source for land and water conservation efforts and national park maintenance, both of which are directly tied to oil and gas revenues thanks to the passage of the Great American Outdoors Act. As of 2019, national parks in Utah need $225.2 million to address deferred maintenance. Additionally, BLM offices across the state have 11 projects planned this year that are also tied to national oil and gas royalties.
The debate surrounding oil and gas exploration on public lands elicits strong opinions. Some groups sharply oppose the environmental effects of extracting and consuming fossil fuels. Other groups desire the affordable energy, family-sustaining jobs, and bigger tax revenues from energy dense hydrocarbons. Proper well placement and modern technology, such as directional drilling, have allowed Utah to strike a proper balance between development and conservation.
The balanced approach, once the hallmark of diplomacy and good governance, is often viewed negatively. But, one thing is clear: To effectively promote the common good, Utah must meet its energy needs in the most environmentally responsible and practicable manner possible.
Utah, like the rest of the nation, currently depends on oil and gas, and it makes no sense to disrupt the industry until viable energy alternatives are in place to meet Utah’s needs.