Opinion: Teacher: Wyo needs to act fast to restructure revenue stream

A drill rig in Converse County. (David Korzilius/BLM/FlickrCC)

Opinion by Kelli Pederson, WyoFile

This season of giving thanks reminds me how grateful I am to live in Wyoming. Growing up here has filled me with an appreciation for the wealth of outdoor opportunities our state offers, and I have chosen to reside here for our top-notch education system.

For the past 13 years, I’ve taught environmental science, math and biology in Wyoming. I’m inspired by my students, who are passionate about exploring nature and finding ways to ensure Wyoming’s people, lands, waters and wildlife thrive for future generations. For three decades, Wyoming has been a leader in prioritizing educational funding, leading to high success rates for Wyoming students.

Unfortunately, with highly fluctuating revenues from coal, oil and gas, I’m concerned for the future of our education system and other public services since the source of our funding is dependent upon the boom-and-bust cycle of the fossil-fuel industry. It is imperative we act now to restructure Wyoming’s decreasing revenue stream.

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Wyoming is well-positioned to lead our nation in energy production by broadening our development of wind, solar, nuclear, geothermal, lithium and other rare earth mineral resources. I’m not advocating we abandon oil and gas development, as our current infrastructure system is dependent upon it. However, time is of the essence to stop our roller coaster of budgetary uncertainty and accelerate the transition to a diversified economy providing greater financial stability for Wyoming. To support Wyoming communities adversely impacted by the diminishing coal, oil and gas markets, we must embrace the changing energy economy by expanding manufacturing opportunities and exploring critical mineral development in a responsible manner.

Furthermore, it is crucial we reform the federal oil and gas leasing system, which currently shortchanges taxpayers and by extension, our school districts. Federal leasing and royalty rates are outdated and fall far below the current market rates. Parcels may be leased for as little as $1.50 an acre. According to a report from the budget watchdog group Taxpayers for Common Sense, our below-market rates have cost taxpayers more than $4 billion over the past decade for production on federal lands in Wyoming.  Four billion dollars would have gone a long way toward funding Wyoming’s education, healthcare and infrastructure systems!

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Historically, our bonding rates are so low that we have failed to require companies to cover the associated cost of cleaning up abandoned oil and gas wells on federal lands. A report from the National Wildlife Federation and Public Lands Solutions concluded that there are 2,317 orphaned wells, while an additional 3,609 wells have been inactive for six years and are at risk of abandonment on federal lands in Wyoming. Since there is no party responsible for the cleanup, the costs are shifted to taxpayers. By some estimates, at the national level, taxpayers will pay billions of dollars as the current policies only cover 3% of the associated remediation costs.

Uncapped and abandoned oil and gas wells leak methane and pollute water, threatening people and wildlife alike. Failing to mitigate these threats places Wyoming’s ecosystems at risk. Several years ago, Wyoming recognized a similar problem on both state and private lands and updated its bonding system. Therefore, taxpayers don’t bear the financial responsibility for the cleanup on non-federal lands in Wyoming. We must demand the same fiscal responsibility from our federal government.

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The Department of Interior has just released a report outlining reforms to the federal oil and gas leasing system. These proposals would raise leasing and rental rates and reform the bonding process to ensure taxpayers aren’t left subsidizing energy developers for their end costs.  These reforms are crucial for the future of education and other state programs for the public good. Such reforms will increase Wyoming’s revenue stream, ensure the continuation of a strong educational system and safeguard outdoor recreation opportunities.

Now it’s time for the White House and Congress to implement these important reforms. We must modernize the outdated leasing system, so oil companies pay their fair share to ensure that taxpayers receive an equitable return for the use of our public lands. Making these reforms will put our state on a path toward a more prosperous, diverse and stable economy.

 

WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.