Guest editorial from Wyoming Governor Mark Gordon, Senate President Drew Perkins, House Speaker Steve Harshman and Joint Appropriations Committee Chairmen Senator Eli Bebout and Representative Bob Nicholas shared with permission on County 17.
Ultimately there’s one investment that supersedes all others—Investing in yourself.
Wise advice from Warren Buffet that we took to heart when we first became aware of a once-in-a-lifetime opportunity to bring lands in Wyoming into Wyoming hands.
In our future, Wyoming will be facing hard choices on how to fund our schools, infrastructure and other critical services. A significant dip in coal and natural gas production has made our revenue streams particularly volatile. The latest CREG reports estimate the state will see a $156.3 million drop in revenue it has to work with for the 2021-22 biennium, and the situation likely won’t get any better from there. Power Wyoming’s initial report, presented to the Joint Revenue Committee in November, outlined the high likelihood of the state’s deficit increasing by $200 million.
Yes, Wyoming faces big challenges in the years to come – challenges that will require equally big solutions and ideas. Mirror bills in the House and Senate that were introduced last week represent just that – a big idea that could potentially generate a new income source for our state and yield significant returns in the years to come.
Last year, Occidental Petroleum (Oxy) acquired Anadarko Petroleum Corporation, which includes an asset in Wyoming long known as the ‘Union Pacific land grant’.
The land grant has a unique history. In 1862, President Lincoln granted lands and minerals to the Union Pacific to help finance construction of the railroad. President Lincoln did not choose these lands by accident. They are some of the most mineral-rich lands in the world, and they helped provide the resources to power locomotives across the West.
This railroad land grant split the land surrounding the area where train tracks were to be laid into a checkerboard pattern. Odd-numbered sections were given to the railroad while the federal government kept even-numbered plots. In Wyoming, this checkerboard pattern extends 20 miles on either side of the Union Pacific in the southern part of the state.
Today, this checkerboard pattern across southern Wyoming makes land management challenging and can hinder access, both for multiple-uses and mineral development. Sections owned and managed by the federal Bureau of Land Management are intermingled with sections owned by a multinational corporation and other private landowners.
That brings us to today, and the unique opportunity for our state. In the wake of Occidental Petroleum’s acquisition of Anadarko, state leaders learned that the company intended to sell certain assets across the globe that no longer fit their portfolio. We then reached out to Occidental Petroleum to gauge their interest in a possible transaction for the land grant.
This asset is incredibly unique. It totals around 1 million acres of surface lands and around 4 million acres of mineral ownership. This includes a majority mineral ownership underneath the world’s largest naturally occurring soda ash deposit, a bedrock of Wyoming’s economy. It also includes proven oil and gas opportunities in southeastern Wyoming, significant grazing operations, renewable energy development, and future exploratory opportunities in everything from lithium to rare earth minerals. The State would not get into the business of running these operations, but we would derive income from them, as we do with other state-owned lands and minerals now.
Trona is a key ingredient for important products like glass, detergents, paper, and water treatment. The royalty revenues associated with the trona operations on the land grant are very stable and insulated from the booms and busts Wyoming has endured for decades. The state already owns approximately 5% of the minerals underlying the trona patch and purchasing the land grant would increase that ownership to over 50%. Royalties from trona would allow the state to increase and diversify our revenue sources.
These activities currently provide stable cash flow that can diversify Wyoming’s revenue picture for generations to come. We can convert relatively low-yielding cash in our long-term savings accounts into a better investment that provides additional funding for our schools and our communities.
Wyoming is not trying to become an oil and gas operator, or a mining company. Rather, the land grant opportunity allows the state to expand into areas where we already have expertise: land and mineral management.
This opportunity is not only economic. Acquiring more than 1 million surface acres across the checkerboard in southern Wyoming will bring enormous benefits for multiple-use. Instead of private sections mixed in with federal BLM lands, we have the opportunity to assemble one of the largest contiguous pieces of public land in the continental United States. That will benefit our wildlife, hunters, fishermen and outdoor recreationists.
This potential acquisition, like any investment, is not without risk and we intend to weigh that risk carefully. Legislation moving through both chambers of the Wyoming Legislature lays out a process for the state’s elected leaders to carefully evaluate this opportunity and determine if it is a prudent investment. We will require significant due diligence and outside appraisal of the lands in question. If the investment doesn’t make sense, we won’t move forward.
At the same time, we recognize this isn’t an opportunity that will last forever. Passage of the bills in the Legislature will empower all of us, who are elected officials, to seize this unique opportunity if the purchase is fiscally prudent.
Opportunities like this don’t come along very often. The land grant has only changed hands twice in its 150+ year history. It’s likely that this would be the largest government purchase of private land since the United States purchased Alaska from Russia. That’s a big deal.
But thinking big is nothing new to Wyoming. In 1968, Gov. Stan Hathaway and the state’s leaders stepped forward and levied the first severance tax on mineral production. In 1974, they did it again and created the Permanent Mineral Trust Fund.
Those examples of big thinking paid off for Wyoming, and it made us the envy of the nation. Now, we have the chance to do it again by making the best investment of all – in ourselves.
County 17 does not traditionally share editorial content; however, this particular piece fairly explains a complex transaction being considered by the State of Wyoming, and we feel it is best to let our readers hear directly from the people involved in the decision.