10 possible big-money deals for Utah schools
Saturday , July 12, 2014 - 3:54 PM
BLM map of oil shale and tar sands deposits in Utah....
SALT LAKE CITY -- Aaron Garrett gave folks at the last School and Institutional Trust Lands Administration meeting a few things to think about — 10 things, to be exact, that he feels should be top-of-mind for the agency that manages land for the benefit of Utah public schools and other institutions.
“This is SITLA’s twentieth anniversary. All year we’ve been celebrating the work that they’ve done over the past 20 years,” said Garrett, the School Children’s Trust specialist from the state Office of Education. “I want to bring to your attention some of the opportunities that exist for the next 20 years.”
SITLA manages about 3.5 million surface acres of land, and 1.1 million acres of mineral rights, across the state of Utah. The agency is tasked with leveraging those resources to generate funding for the benefit of state institutions, including hospitals and universities.
“The largest beneficiary is the public school system,” said Garrett. “About 95 percent, or so, of all trust lands are dedicated to benefit schools.”
Revenue may be generated using the land for everything from real estate development to oil, gas, and mineral leases. Since 1994, according to the SITLA website, the Trust Lands Administration has generated $1.3 billion in revenue, increasing the Permanent School Fund from $50 million to $1.7 billion. The annual interest and dividend income from the fund is distributed to schools throughout the state, to be spent by school community councils. Last year, Garrett said, it amounted to $62 per child.
“It could go from $62 to five to 10 times that amount, and what people need to realize is that this money that the school community councils get is basically the only discretionary money schools get,” he said.
The “Top 10” list Garrett presented at SITLA’s meeting in June puts the focus on potential revenue opportunities for the next 20 years.
“This is meant to be a thought exercise,” he said, adding that the list is based on an informal poll of various staff members. “It’s not offered in any particular order, except No. 1.”
10. The Book Cliffs
“Its potential is huge,” said Garrett, speaking of the opportunity for oil and gas leases. “If we’re looking at 20 wells, at a royalty of $6 million a year, that’s a potential royalty of $120 million.”
Risks related to the project include that the extent of the resource is unknown, and that there are terrain, political and environmental issues.
9. Graymont Mine
“This is a limestone mine in the west desert,” Garrett said. “It is currently producing about $300,000 a year in royalties.”
There is potential for expansion, bringing in as much as $12 million over the estimated 35 to 40-year lifetime of the mine.
8. Utah County real estate
With 2,000 acres of trust lands in Utah County, there are two development projects SITLA could undertake: Mid Valley, in Eagle Mountain; and Hidden Valley, in the Saratoga Springs area.
“Competition is probably the biggest risk,” Garrett said, noting that Property Reserve Inc. also has significant development landholdings in the area.
A SITLA development in Mid Valley would attempt to unite two sections of Eagle Mountain to make one big contiguous city, he said, asking if it would work.
The Hidden Valley project would be years down the road, but there is a risk that a proposed highway could bisect SITLA property.
Garrett didn’t offer a revenue figure for this project, other than saying it could be extremely valuable.
“The real potential here though, is that there is limited large-scale developable land remaining on the Wasatch Front. From Davis County to Utah County the land is filling up quickly, and this property on the west side of Utah Lake is one of the last large contiguous places where you can do major housing development,” he said.
SITLA has potential for projects at Blawn Mountain and Ashley Creek.
“Between the two projects, we’re talking in the long run of about $1 billion or more in royalties,” Garrett said.
The biggest concerns with these projects are the market and the environment. The Blawn Mountain area, he said, is home to several thousand wild horses.
6. Cane Creek/Paradox Basin
Garrett said the Utah Geological Survey is in the middle of a big study on the shale oil potential of this area, but a 2004 report described Cane Creek as an overpressured and fractured, self-sourced oil reservoir ideal for horizontal drilling. He also said the June 2014 issue of Explorer, the magazine of the American Association of Petroleum Geologists, described the study as a big deal.
“I think it means there’s a lot of oil there,” he said.
In addition to environmental risks, the area lacks infrastructure, has difficult topography, and is home to many artifacts.
5. Bonanza Block
This oil shale development may be 25 years down the road.
“We don’t really know the exact potential, but it’s one of the big opportunities for the trust,” said Garrett, noting that Utah’s oil shale is estimated to hold 77 billion barrels of recoverable oil.
“We have a technological issue turning a rock into an oil,” he said, adding that there are also environmental issues and it’s not a politically popular idea.
“The vast majority is on BLM land, which means that perhaps there might be a good opportunity for land exchange,” he said. “If the BLM doesn’t want to be involved in producing it, then maybe we could acquire some of those properties.”
4. Seep Ridge Block
Another oil shale project, but expected to go commercial in the next 12 to 16 months. Again, the risks are technological, environmental and political.
3. South Block
South Block is flat desert land in the St. George area, with 8,300 acres for potential real estate development.
“Who really knows what the time line is on this project? It kind of depends on the market, and how quickly people in St. George reproduce and how many people move there,” said Garrett. “The potential is huge. If you’re going to go about $45,000 per acre ... then you’re looking at $360 million over the course of many years.”
SITLA has invested $26 million in the project already, but Garrett says they’ve made back much of that amount. He wonders if the agency should continue to manage the project, or bring in a master developer.
2. Tar Sands
“US Oil Sands tells me there’s 30 billion barrels of tar sands oil that could be pulled out,” said Garrett, speaking of the potential in Utah as a whole. But there have been protests, he noted, and it’s a difficult process to jump through legal hoops and extract the oil.
1. The People of SITLA
“It’s cheesy, I know, but I really do think it’s important,” said Garrett.
Many members of the SITLA staff have been with the state for more than 20 years, and some more than 30.
“SITLA’s success over the past 20 years is because of the people that have been working here, and the big question for the next 20 years is who are the people who are going to step up to take the place of these leaders?” he said. “There’s a lot of institutional knowledge — hundreds of years of service.”
Contact reporter Becky Wright at 801-625-4274 or firstname.lastname@example.org. Follow her on Twitter at @ReporterBWright.STORY:20140711013310 possible big-money deals for Utah schools/Education/2014/07/13/14-SITLA-Top-10.html-1
Popular Stories for Education
OGDEN – Megan Brandley wanted her eighth-grade U.S. history students to have a firm grasp on slave trading – something more than they would get just...
Mock slave trade moves Mount Ogden students /Education/2014/09/23/students-get-first-hand-look-at-slavery.html 3
NORTH OGDEN — The Weber School District will retool its training on dress codes after an uncomfortable incident sparked debate about male administrators...
Gender problem: Men enforcing girls' dress codes /Education/2014/09/20/Dress-Code-Problems.html 3