Surplus from cleanup ‘in limbo’ in Treasury

Bureau of Land Management ecologist Carla DeYoung describes how waste shale from a federal oil shale research site had been dumped in this valley.



At a time of concerns about deficit spending, sequestration and whether the government can pay its bills, a $76 million windfall tied to the Anvil Points cleanup project continues to sit in the U.S. Treasury, just waiting for Congress to decide what to do with it.

The Department of Energy may be expecting to receive more than half of it, but county governments in northwest Colorado also would be happy to accept a share that they think they deserve, if only federal lawmakers would act.

“I’d certainly love to see those funds come back to the communities where they belong,” said Bonnie Petersen, executive director of the Club 20 Western Slope lobbying group.

For now, “that money’s just in limbo in a Treasury account somewhere,” said John Beck, branch chief for lands and realty for the Colorado state office of the Bureau of Land Management.

Beck oversaw the recently concluded $24 million cleanup project. The origins of its funding help explain the windfall that remains. The story goes back to the 1997 legislation that transferred more than 56,000 acres making up Naval Oil Shale Reserves 1 and 3 on the Roan Plateau from the Department of Energy to the Department of Interior.

Part of that legislation provided funding for the cleanup, using revenues from federal oil and gas development that occurred in the area either previously or as a result of the legislation’s requirement that some further acreage below the Roan Plateau rim be immediately leased. The revenues also were intended to reimburse the Department of Energy for costs related to the research site and its oil and gas development efforts.

However, higher-than-expected natural gas production from that development and high gas prices resulted in the cleanup fund accruing far more revenues than were needed. The drilling generated more than $100 million in revenues before the BLM certified the projected cost of the cleanup in 2008.

That certification has allowed further revenues from the drilling to be disbursed through the normal formula for federal-state sharing of federal mineral lease revenues. But meanwhile, what the BLM says is a $76 million after-cleanup surplus remains untouched because there was no provision in the 1997 legislation indicating what to do with a surplus that hadn’t been anticipated.

The Department of Energy’s costs totaled about $39 million, but BLM spokesman Steven Hall said there’s even some question about the Treasury reimbursing the DOE for spending money that really was the Treasury’s to begin with.

“Basically the federal Treasury would be paying itself back,” he said.

That’s just one question for Congress. But assuming the $76 million is partly spoken for, other questions remain regarding what to do with the rest. And even nailing down the dollar amounts being talked about isn’t easy.

In 2010, the Colorado legislature passed a resolution calling on Congress to require disbursement of $48.8 million to the state from the fund, to then be allocated to Garfield, Mesa, Rio Blanco and Moffat counties. At that time, a spokeswoman for U.S. Sen. Mark Udall, D-Colo., said that in actuality, the state was entitled to only half of that because of the federal-state split for mineral leasing revenues, and that the total available pool might be less than the state legislature thought, meaning the state might be entitled to as little as $17 million.

Udall spokesman Mike Saccone said this week that there apparently is still debate over the amount of money potentially available for local communities, and it may be $18.5 million or $13.5 million.

Udall and fellow Democratic Colorado Sen. Michael Bennet have tried unsuccessfully to pass legislation to give the state its share of remaining funds and to allocate 40 percent of that share to Garfield and Rio Blanco counties, and 10 percent each to Mesa and Moffat counties, which then could pass some on to local governments.

Garfield Commissioner John Martin said the money is supposed to go to counties to mitigate impacts of energy development, but the federal government hasn’t lived up to what it previously agreed to.

“It’d be real nice if they’d give the money (to whom) it belongs,” he said.

Efforts to free up the surplus funds date back to Udall’s predecessor, former Sen. Wayne Allard, who served through 2008. However, Ken Salazar, then Colorado’s other U.S. senator before going on to head the Department of Interior, refused to cosponsor an Allard bill on the subject unless Allard agreed to back a moratorium on proposed further oil and gas leasing on the Roan Plateau (leasing that ended up occurring in 2008), and on a process intended to lead to commercial oil shale leasing in the region.

Saccone said Udall “has remained engaged on the Anvil Points issue and how to direct the appropriate royalties to the communities that should have received them. He is interested in finding a solution — legislative or administrative — that would direct the royalties to local communities in an equitable way.”

U.S. Rep. Scott Tipton, R-Cortez, likewise “would like to see the remaining funds returned to the counties, and has aggressively explored every possible legislative avenue to do so,” said his spokesman, Josh Green.

Udall said the problem is that bills to address the issue have a cost attached to them because they take money out of the Treasury.

“Any bill that has a price tag ... has trouble getting passed,” he said.

Said Green, “Even though the counties lent this money to the federal government in good faith, and rightfully deserve to have it returned, any attempt to repay these counties from the federal Treasury would constitute an earmark under the House rules and is therefore impermissible.”

Saccone said Udall hasn’t introduced a bill on the issue yet during this session.

“Right now Congress’s eyes are focused elsewhere,” he said.


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