What Tavaputs could mean to local economy
Natural gas flows out. Money flows in. That's the basic formula behind the Bill Barrett Corp.'s plan for the West Tavaputs Plateau gas field.
Wall Street traders expect it to be a profitable venture. The corporation's stock price spiked up immediately after last Thursday's announcement of the Bureau of Land Management's final approval of full-field development. However, before those investors see any dividends, workers will get paychecks and the federal, state and county governments will get their share of royalties and taxes on the property and its production.
Wages and taxes for a project this size are measured in megabucks. Drill rig crews and field maintenance workers will number about 200. When they spend their money in the county, they are expected to generate 1.7 jobs in the urban economy for each gas field job in the boondocks.
According to Commissioner Bill Krompel, Bill Barrett accounted for $5.3 million in revenues to the county in 2008 via mineral lease payments. When the project gets up to full production in several years, that could triple. Krompel has calculated the county would receive $16 million in lease money. The state would get $24 million and the feds would rake in $40 million.
Property taxes also could triple over the years, which would chiefly benefit the Carbon School District and its students. The district gets about two-thirds of the property tax money collected by the county. Bill Barrett paid $1.5 million in 2008, and if its property tax payment goes to $4.5 million, the schools would get $3 million.
The state-imposed sevance tax on natural gas would also surge to $21 million a year from the current $7 million, according to the commissioner's figures. He assumes that the sales price of gas will be $6.50 per 1,000 cubic feet.
Over and above the tax payments, the company will be spending up to $5 million over the years on wildlife and cultural enhancements in the project area and Nine Mile Canyon. Initial plans call for survey of all Native American rock art and other archeology, along with research and creation of interpretive displays.
Since traffic through Nine Mile and other roads is expected to increase as the development proceeds, Bill Barrett will also spend up to $10 million on road work to suppress dust and improve drainage. As reported earlier in the Sun Advocate, the county has already received approval for $5 million in grants and loans from the state's Permanent Community Impact Board for its share of the $20 million total cost. The state is supposed to pay the final $5 million.
The BLM's Record of Decision also calls for habitat protection and enhancement for deer, elk and sage grouse, as well as for non-game species and native plants.
The environmental constraints will produce the only drawback for the county, and this is minor, Commissioner Krompel said. That is the BLM's requirement that four back-country roads will be gated to prevent access to the general public. These are Jack Canyon, Horse Bench, Cedar Ridge and Jack Ridge roads. "Carbon County does not have a full legal claim to ownership of these roads per federal case law," he explained, adding that the roads have been claimed by both the county and federal government but the claims have never been settled in court.
Given the millions of dollars at stake, he does not foresee the county pressing its claim.
Meanwhile, the county has 550 miles of roads to take care of already. Some of these include Nine Mile, Argyle Canyon, Dry Canyon, Cottonwood Canyon and Cold Spring roads around the project area. They clearly belong to the county and the county receives funds from the state to maintain them. These will all be open to the public and improved as a result of the natural gas development, Krompel said.