Congressman seeks to free up gas reserve money
Possible legislation could provide windfall to Moffat County
March 22, 2011
Moffat County Commissioner Tom Gray said he is optimistic recent federal legislative activity surrounding an oil shale development issue near the Roan Plateau could land the county anywhere from $1 million to $2.5 million.
"The take home message is don't give up hope because we haven't," the commissioner said. "And obviously Congressman (Scott) Tipton hasn't."
Gray was speaking about a recent announcement by Tipton that he would seek to free up and redistribute surplus royalty money collected from oil and gas drilling near the Roan Plateau previously designated as Naval Oil Shale reserve.
Two parcels of land make up Colorado's oil shale reserve and are located near Rifle.
The land parcels — one 35,000 acres and the other 22,000 acres — are located on top of and below the rim of the Roan Plateau.
Decades ago, the federal government set up the two oil shale reserves to provide oil and gas for the nation in times of emergency. But, over time, the government conducted oil shale research in the area and eventually drilled oil and gas wells for production, BLM spokesman David Boyd said.
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In 1997, Congress transferred control of the Naval Oil Shale reserve land and minerals from the Department of Energy to the Bureau of Land Management with the instructions to open up about 12,000 acres to private oil and gas development, Boyd said.
Because the leasing and mineral production would generate royalties, the government decided to place the profits from the drilling into a fund. The money collected was allocated to reimburse the federal government for the natural gas production infrastructure previously built and to clean up remains from prior oil shale research.
Once the agencies agreed there were sufficient funds to pay for the two items, the money would no longer be directed into the fund, Boyd said. Rather, royalties would be split between the federal government and the state and local governments.
However, Boyd said oil and gas production from 1997 to 2008 was so good that it left surplus money in the fund.
"This generated a lot of money fairly quickly because oil and gas was really booming and this was a really rich natural gas field," he said.
The legislation that created the fund, however, doesn't provide direction for any leftover money, Boyd said.
Since 2008, several state and federal lawmakers have previously introduced legislation to divide the remaining money among four counties impacted by the development — Moffat, Rio Blanco, Mesa and Garfield.
State Rep. Randy Baumgardner, R-Hot Sulphur Springs, drafted a House Joint Resolution concerning the fund last year.
According to that resolution, in 2008 the fund had accumulated about $112.2 million — $39.4 million of which went to infrastructure reimbursements and $24 million for the research site's clean up.
The remaining $50 million or so is the subject of a recent news release from Tipton.
"These funds rightfully belong to the Colorado counties that contributed them, and should be put under local control," Tipton said in the release. "I'm going to fight to ensure that these Western Slope counties get the funds they are due."
The news release stated Tipton would seek to divide and disperse the funds through legislative action. However, Tipton has not yet introduced any bills addressing the matter, according to records.
Commissioner Tom Mathers said Tipton told him he wanted to split the $50 million between the federal government and four counties, with Moffat County receiving 10 percent, or about $2.5 million.
Mathers, however, said the amount of money left in the fund isn't exactly known because it "kept getting lost."
"Everybody didn't know where the dollar amount came from that they were giving us and nobody could really pinpoint where that money was at, other than it was somewhere," he said.
Although former Colorado senators Ken Salazar and Wayne Allard and current senators Mark Udall and Michael Bennet have all sponsored legislation regarding the issue, those measures have failed to redistribute the money, according to records.
"We've tried and tried and we keep getting dead ends," Mathers said. "But, I've felt more positive with Tipton going after it than anybody else."
Gray said he remains optimistic about the prospects of receiving the money Tipton thinks Moffat is owed due to "regional impacts" of the oil shale production.
"It is encouraging to see our federal legislators doing their best to try to get something done with it because right now those dollars are just sitting there in limbo," he said.
"Negotiations are tough sometimes and things take time and I don't see that we have any other choice but to keep working on it and I am just glad we are doing it."
Mathers said the money would be "quite a windfall" for Western Slope counties. He said the county might consider allocating that money, if received, to capital projects including road improvements.
Gray hesitated when asked how he would like to see the money spent, saying he wasn't "going to plan on how I'll spend it until I see it."
"If we do see it, I guess my initial opinion would be we would spend it on the impacted roads because we are a county that sees impacts from energy development in the counties south of us and we have seen that the last couple of years," he said.