Conflicts Converge Over Oil Shale Trust Fund

PhotobucketOnce upon a time during the oil-shale boom day in northwest Colorado, the federal government put some mineral-tax revenues into the Anvil Points Oil Shale Trust Fund to help local communities like Rifle and Meeker mitigate impacts. The feds froze the trust fund’s distribution process about 10 years ago. Meanwhile, tax revenues have been building by almost $1 million a month. With nearly $80 million in the bank and the same communities facing a revived oil-shale industry on top of an oil-and-gas boom, will the feds again show them the money?The Roan Plateau area west of Rifle was set aside as the Naval Oil Shale Reserve under the Interior Department until the Bureau of Land Management (BLM) took charge in 1997. A stipulation was made during the transfer, however: The BLM would have to clean up an old experimental oil-shale plant at an approximate cost of around $18 million paid out of the oil-shale trust fund. Until the cleanup is completed, the trust fund would remain in a locked box. Only recently has the BLM begun preparing for bids on the clean up project.

PhotobucketThe trust fund didn’t gather much attention until the bank account recently hit nearly $80 million. With thousands of gas wells being drilled in northwest Colorado, most notably in Rifle and Parachute in western Garfield County and the Piceance Basin near Meeker in rural Rio Blanco County, local government entities are burdened by expenses such as fixing roads deteriorating from heavy truck traffic. In response to local officials, Colorado politicians are turning to the trust fund as a logical revenue source. But, they aren’t the only ones eyeing the money.

The U.S. Department of Interior  was one of the first to move in for a piece of the action – $24 million to be exact.

“We strongly disagree with this assertion and oppose the Department taking money that is rightfully owed to our state in order to pay for more federal bureaucracy,” U.S. Senator Ken Salazar, D-Colo., wrote to Interior Secretary Dirk Kempthorne recetnly. “This appropriation does not serve the taxpayers who fund the government nor does it serve the states who allow for energy production to happen within their borders.”

Salazar is also tangling with U.S. Sen.Wayne Allard, R-Colo. Both are proposing similar resolutions that would direct the funds back to Colorado and they have been battling in the local press about whose plan is better.

In essence, Allard’s proposed legislation funnels the trust fund monies through the state for disbursement on the Western Slope. Salazar, with his brother, Congressman John Salazar, D-Manassas, want to introduce legislation that would send $15 million to both Rio Blanco County and Garfield County, areas facing looming oil-shale development on top of a massive oil-and-gas boom.

However, other evil lurks for the oil-shale trust funds.

“Unfortunately other members of Congress from across the nation have begun eyeing this fund to pay for their legislative priorities — if this happens, Colorado stands to lose any claim to this money for good,” Allard noted on his website.

Allard is also upset that it has taken the BLM 10 years to start the oil-shale plant cleanup, which is why the trust fund monies are in limbo in the first place.

The story doesn’t end there.

President Bush wants to change the split of federal mineral-lease tax revenue from the Roan Plateau, raising the federal government’s share to 52 percent, up from 50 percent, with the feds taking a 2 percent increase worth millions to the state and to local communities. Rep. Salazar and Rep. Mark Udall have a pending bill that repeals that provision and restores the state share of mineral-leasing revenues to 50 percent.

What does all this political haggling over the oil-shale trust fund and federal mineral-tax revenues mean to small rural places like Rio Blanco County? How could the county possibly use $15 million? At an estimated $2 million cost-per-mile to fix Rio Blanco county roads pulverized by oil-and-gas trucks, oil-shale trust fund monies could buy about eight miles of a happy ending.

Top photo by Leslie Robinson: An oil and gas truck zooms down a Rifle highway in the foreground of the Roan Plateau. Bottom picture: Rio Blanco County and Garfield County are in the heart of energy development.