The two main arguments on which proponents of the Seven County Infrastructure Coalition (“Coalition” or “7CIC”) rely are the promise of 1) economic diversity (i.e., jobs and revenue); and 2) a seat at the bargaining table (i.e., more input on regional projects). These are myths and misrepresentations, as explained here.
First, Coalition projects are highly unlikely to bring jobs to Grand County residents. Infrastructure contractors will bring their own high-paid skilled employees with them from outside southeastern Utah, just as the oil and gas industry currently does, instead of hiring locals. And many of the unskilled jobs will be located too far away from Moab to be attractive to our community.
Second, increased mineral lease revenues are unlikely to trickle to Grand County as a result of Coalition projects because we will only see money once the projects are paid in full. At several billion dollars per price-tag, Coalition projects will not make a net profit for many decades – if ever. Even with a low federal interest rate, the likelihood of both paying off a nearly $3 billion federal loan and making a profit is extremely low. Plus, our cut may be very small. For example, if the Coalition’s first proposed project discussed below is successful, Grand County will receive just 4 percent of the net profits – again very far into the future.
Third, to have a seat at the table, we do not need to sign a 50-year binding agreement that is ambiguous and therefore legally risky, empowers the Coalition with eminent domain powers over land in Grand County, prevents us from vetoing projects within our own boundaries, and allows transfer and conveyance of Coalition assets to third-party entities at any time. We can participate in regional infrastructure projects we deem important on a project-by-project basis without being a member. The Coalition will seek our cooperation even as a non-member because Grand County is a critical player in our region because of our strong economy. By remaining independent, we minimize our exposure to liability and preserve our bargaining power.
Generally, the language of the Coalition Agreement is clear that its purpose is to promote natural-resource extraction in southeastern Utah by building railroads, roadways, pipelines, water storage, electrical lines, and wastewater facilities. More specifically, according to Grand County Attorney Andrew Fitzgerald, the specific primary purpose of the Coalition is to move oil and gas out of the Uintah basin. The Coalition’s first proposed project is a short-line railroad in Uintah and Carbon counties to bring oil from the Uintah basin to refineries.
The other six Member counties – Carbon, Daggett, Duchesne, Emery, San Juan, and Uintah – have already formed the Coalition, held its first public meeting, and voted to request for $55 million in funding through the Utah Community Impact Board (“CIB”). Of this amount, $5 million will fund an initial infrastructure inventory. The Coalition plans to apply the other $50 million toward the Uintah railroad project.
$50 million is a lot of money, but $3 billion is a whole lot more. Jeff Holt, Utah Department of Transportation Commission chairman and self-described architect of the 7CIC, estimates that the railroad will cost $3 billion. The Coalition expects to fund the remaining $2.95 billion of the project cost by a loan from the Federal Railroad Administration. The project itself, via fees charged on each barrel of oil transported by rail, would pay off the loan – eventually. Or, instead, the Coalition may default on its $2.9 billion loan to the federal government after the oil is gone, in which event Coalition members receive no benefit.
In a conversation I had with Jeff Holt on Sept. 17, he agreed that the only downside to participating in the Coalition’s regional projects as a partner rather than a member is losing a piece of the net revenue pie.
If our only benefit is a fraction of speculative profit realized very far into the future, then we should not bind ourselves to this Coalition for 50 years or more, subject ourselves to civil liability under the ambiguous agreement, or give up control and meaningful consultation on how land within our boundaries should be developed for empty promises based on myths and misrepresentations.
I urge you to create a solid record opposing Grand County’s membership in the 7CIC by submitting your public comments to the Grand County Council by Oct. 1 at 5 p.m. via email: email@example.com.
Christina Sloan is a local civil attorney with 10 years of experience representing municipalities, organizing corporations and special service districts, and drafting and interpreting contracts in Utah and Colorado.