School Trust Land Grants: How Oil and Gas can Power Colorado Schools

May 6, 2014

Editors Note: This article was first published in the Craig Daily Press on September 14, 2011, but the facts presented are true to this day, and the need for sustainable school funding greater than ever.

Marcia Neal and David Ludlam: Oil, gas can help fund Colorado schools

No news but bad new clouds the horizon when it comes to funding Colorado’s school districts. State leaders noted earlier this year that an additional $332 million will be cut from K-12 education in 2012. These additional draconian funding reductions may force teacher layoffs, increase class sizes and shorten the school year in some districts.

But there is a beacon of good news shining from an energy-rich corner of Colorado. Moffat and Routt counties are uniquely situated to provide new sources of long-term funding for schools. The revenues won’t come from printing money at the federal level but instead will come from investing in Northwest Colorado’s energy resources.

The federal government in 1787 issued School Trust land grants. These land grants were awarded knowing new states would need reliable income to establish and sustain public education. Today, the State Land Board manages these acres with a mandate to generate revenues for schools and education.

Land Ownership/Status

Colorado State Lands

Numerous commercial activities occur today on state lands creating a diverse revenue stream for education. Ongoing grazing leases, commercial enterprises and recreational activities contribute. But the most lucrative source of revenue — about 90 percent — occurs when the State Land Board leases oil and gas and other hydrocarbon mineral properties for development. In 2008, state lands generated more than $60 million for schools while 2010 saw a 15 percent decrease in the amount because of economic and regulatory pressures limiting short-term energy development.

So what gives Moffat and Routt counties the unique potential to help Colorado’s diminishing education funds? Two variables — one past, and one present. In 1876 when Colorado became a state, other energy-rich, yet-to-be-named Western Slope counties including Mesa, Garfield and Rio Blanco were part of the Ute Indian Reservation. As a result, these counties were not issued state lands. This historical fact resulted in Moffat and Routt counties playing host to the vast majority of state lands in western Colorado. Presently, emerging technology improvements are revealing new possibilities for oil and natural gas production in the Yampa Valley region. This new oil and gas potential may generate tens of millions of dollars annually for Western Slope schools and education.

As the Mancos and Niobrara shale deposits become household names, and as these rocks begin contributing energy to our nation, decades of dedicated school funds may flow from the Yampa Valley. And as school districts across Colorado lose more than $300 million in 2012, any potential new revenue for education is good news indeed.

To help foster this new source of school funding, working together to achieve several favorable outcomes is important. First, Western Slope stakeholders of all kinds must continue opposing diversion of monies from the education permanent fund into the state’s general fund. These energy funds were designed to grow and become a significant factor in long-term education funding. In states where long-term investment strategies are employed, energy dollars basically fund schools. Diverting funds away from schools in the short-term is short sided.

Second, our organization must continue doing everything possible to facilitate communication about the technologies used in oil and natural gas operations and the safeguards used to protect the environment. Sen. Jean White was spot-on in a recent community forum in Hayden when she pointed out that the industry and landowners must work together to leave behind a positive energy legacy.

Third, Colorado must ensure the State Land Board has the financial and staff resources necessary to process lease nominations and conduct lease sales that will in turn enhance revenue to schools.

Public concern and mixed reactions to energy development will continue as Niobrara, Mancos and other promising formations are explored and produced throughout western Colorado. But all stakeholders can recognize the unique contribution that energy beneath state lands can make to Colorado’s children. With this recognition will come a legacy of newer classrooms, smarter students and a more educated and competitive Colorado.

Marcia Neal is a member of the Colorado Board of Education, representing the Third Congressional District. David Ludlam is the executive director of the West Slope Colorado Oil & Gas Association.

Published with permission by  5/6/14

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