chris@crash.cts.com
Kelly,
Here is some info I got from SUWA on Andalex.  Ken Rait wrote it
- he's the one you see on TV alot.  More later.
Chris
From: Southern Utah Wilderness Alliance
Subject: hope this helps!
The Economic Impact of the Proposed Andalex Coal Mine  on
Utah Revenues through the  Mineral Leasing Act and School
Trust Lands  Mineral Leasing Act
       The Mineral Leasing Act of 1920 is the statutory
framework through which the federal government leases the
following minerals: coal; phosphate; sodium; potassium; oil; oil
shale; gilsonite; and gas.  In contrast with the General Mining
Law of 1872, which guides the development of hard rock
minerals, the development of minerals leased under the
Mineral Leasing Act requires the payment of a royalty to the
federal government.
       All money received from the sales, bonuses, royalties,
and rental of public land under the Mineral Leasing Act are paid
to the Treasury of the United States.  Fifty percent of this
amount is then re-allocated to the source state of the royalty
payments / mineral development.  These monies are to be
allocated within the state by the state legislature, with
priority to be given to state subdivisions socially or
economically impacted by mineral development for the
following purposes: planning; construction and maintenance of
public facilities; and provision of public service.
      Utah law prescribes the allocation of the state's share of
Mineral Leasing Act monies.  It provides that monies shall be
allocated to the Permanent Community Impact Board, the Utah
Board of Water Resources, Department of Transportation, and
government subdivisions impacted by mineral development,
with smaller portions (2.25% each) going to the State Board of
Education, Utah Geologic Survey, the USU Water Research
Laboratory.
        According to the Minerals Management Service, in 1992,
the cumulative production royalty, rent, and bonus collection
from mineral operations on Utah lands (under the Mineral
Leasing Act) totalled $61,694,000.  The majority of this came
from coal production in central Utah and oil and gas production
from the Uintah basin in northeastern Utah and the Aneth Field
in extreme southeastern Utah.
        Of this amount, half, or about $31 million was passed
along to the State of Utah pursuant to the Mineral Leasing Act
for reallocation pursuant to state law.  During that same fiscal
year, total grants to state and local governments from the
federal government were $1,042,489,000.  In other words, the
state's share of the revenue stream from Mineral Leasing Act
monies constituted just 3% of the total amount granted to Utah
government subdivisions by the federal government.
      Concerns expressed by individuals regarding impacts to
Mineral Leasing Act revenue flows as a result of national
monument designation are irrelevant.  A national monument
would not impact the existing revenue stream because the vast
majority of Utah's mineral revenue generating lands are in
locations far from the proposed national monument.  Therefore,
existing revenue streams will not be affected.        The only
concern could be with regards to foregone revenues, but this
concern is immaterial for two reasons.  First and foremost,
research by Montana-based Bioeconomics has shown that coal
produced from Andalex's Kaiparowits leases will not be able to
compete with other sources because of the high transportation
cost component.  Second, even if the Andalex mine proves
economically feasible, it would only boost the state's share of
net mineral lease revenues by $890,370 per year at maximum
production (Utah Office of Planning and Budget).  In other
words, only about 3% of Utah's share of Mineral Leasing Act
revenues would be foregone, in the unlikely event the Andalex
coal mine were economically feasible.  This figure equals nine
one hundredths of one percent of the total money granted to
the state by the federal government on an annual basis.  Trust
Lands Land protection presents a unique opportunity for school
trust interests to finally earn revenues from lands which have
historically generated less than one percent of Utah's
education budget.  By exchanging school trust lands from
within protected areas for lands with far greater revenue
generating potential, school trust interests have more to gain
than if these parcels remain scattered in areas with
historically insignificant revenue generating potential.
        The use of trust lands as a "weapon" against land
protection will harm no one's interests as much as it will hurt
the school childrens'.  Land protection in southern Utah and
enhanced revenue generation from trust lands are compatible
goals.
        Despite this, Utah education leaders have claimed that
coal mining on southern Utah's Kaiparowits Plateau, within the
area being considered for a national monument designation,
could generate $1.1 billion for Utah schools.
      In 1993, the Governor's Office of Planning and Budget (OPB) released a 
study entitled, "Andalex Resources and the Proposed
Smoky Hollow Mine: A Fiscal Impact Analysis and Economic
Overview" which seriously disputes those allegations.
According to the OPB study, the net present value of the coal
mine to the school trust is less than $7.5 million on a net
present value basis, just one percent of the amount claimed by
the education interests.
      This $7.5 million addition to the permanent fund would
yield an expendable income of $36,000 annually.  In other
words, the Andalex coal mine would not even generate one one-
thousandths of one percent of the total $1.9 billion education
budget.  The data demonstrates that the Andalex mine, even if
constructed, would provide every Utah school child with less
than ten cents per year.
        Clearly the data from published studies contradicts the
wildly inaccurate claims by politicians using Utah's school
children as a weapon against the designation of a national
monument.
Christopher Christie
mailing from Desolation Row
"What opinions the masses hold, or do not hold, is looked on
as a matter of indifference.  They can be granted intellectual
liberty, because they have no intellect.  In a Party member,
on the other hand, not even the smallest deviation of opinion
on the most unimportant subject can be tolerated.
from "Ignorance is Strength" in "1984" George Orwell
 
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Message-Id: 
Date: Thu, 19 Sep 96 17:48 PDT
From: "Christopher Christie"  
Reply-To: "Christopher Christie"  
To: kelly.cowan@ebbs.cts.com
Subject: Andalex - Economic Info
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