Utah Oil Slick: funding polluters instead of Rural Communities

By Deeda Seed and Adair Kovac - Center for Biological Diversity, et. al., August 2021

Every year Utah receives tens of millions of dollars in federal lease revenues and royalties from oil, gas and mineral extraction as a way to help mitigate the impacts of drilling and mining. Even before scientists linked fossil fuels to the climate crisis, Congress intended this money to be used to help rural communities experiencing rapid growth and infrastructure challenges. The influx of new workers and increased drilling and mining take a toll on communities.

This report from the Utah Clean Infrastructure Coalition shows that, since 2009, the little-known board charged with distributing this public money has funneled more than $109 million to projects that promote or expand fossil fuel extraction in violation of the federal Mineral Leasing Act. That includes more than $2.2 million approved after a state audit found the board was using the public funds improperly.

We examined dozens of public records — including the 2020 audit of the Permanent Community Impact Fund Board by the Utah Legislative Auditor General, meeting minutes, audio tapes and project documents — and found that:

• Since 2009 the Permanent Community Impact Fund Board, or CIB, has issued $109 million in grants and low- or no-interest loans — all of it public money — to finance road construction, engineering studies, attorney fees and other costs to enable fossil fuel development on public and private land. Beneficiaries include well-connected private firms trying to get approval for the proposed $1.5 billion Uinta Basin Railway.
• Over the past two years small towns, cities and special improvement districts in two counties have identified more than $60 million for community improvement projects that have not yet been funded. Unfunded projects include water and sewer services, recreation centers, road improvements and public safety equipment. Over this same period, the CIB gave more than $48 million in grants to fossil-fuel related projects.
• The Utah Legislature failed to oversee the board’s activities. Even worse, in 2021 it changed state law to allow mineral lease revenues and royalties to finance fossil-fuel infrastructure projects, which is illegal under federal law. The new law followed the 2020 state audit criticizing the board’s spending and haphazard decision-making.
• County governments and local agencies continue to seek public funding for projects that facilitate fossil fuel extraction and enrich private corporations over community needs. Since the audit, Uintah County commissioners approved seeking $39 million in public funds to help a private, Ogden-based oil company build a 640-acre oil refinery in eastern Utah.3 The proposed $1.4 billion Uintah Advantage refinery would have the capacity to refine 40,000 barrels of oil a day, and it may also include a rail yard for the proposed Uinta Basin Railway.

The CIB must stop funding fossil fuel development projects. The Utah Legislature should oversee the board’s grant and loan-making process to ensure it complies with the Mineral Leasing Act, which requires these public funds be used to mitigate harm inflicted on communities by oil, gas and mineral extraction and forbids using the money for economic development. Rural communities should call on legislators to ensure that infrastructure needs are met and public money is spent properly.

As Utah and the western United States experience the devastating consequences of climate change in the form of intense heat, drought and wildfires, it is even more critical that the CIB stop siphoning public funds away from much-needed community projects to finance dangerous fossil fuel extraction that worsens the climate crisis.

Read the text (PDF).

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author.