Bills authorizing Gov. Mark Gordon’s administration to pursue the purchase of 1 million acres of land and 4 million acres of mineral rights from Occidental Petroleum passed initial votes in both chambers this week.
By Thursday morning, both the House and Senate had amended and advanced House Bill 294 and Senate File 138 — both measures Gordon brought to the Legislature — through two votes. There was scattered skepticism in the House, while outspoken supporters faced little opposition in the Senate.
Even as the bills advanced, divisions emerged among politicos jostling for control over the purchasing process and even the eventual management of the lands in question. House lawmakers modified the bills to ensure the land would be managed under multiple-use principles, while the state treasurer’s office called for maximizing the land’s revenue potential.
Most of the 90 legislators debating the bills did so with little or no knowledge of key information. The likely price and income potential of the land are known only to a select few players, if anyone. This concerned skeptics.
“We should be asking questions,” Rep. Chuck Gray (R-Casper), who voted against the bill on its first vote, said. “The idea that there’s no answer to them I find that very troubling.”
Proponents of the bills called them the first step in a long vetting process.
With few confirmed facts on hand, proponents dripped out clues and information other lawmakers complained they couldn’t verify.
“It’s a leap of faith on my part,” Rep. Andy Schwartz (D-Jackson) said when the House Appropriations Committee considered the bill on Monday night. Though there were estimates of land values and potential investment returns put out there, he said, but “I don’t have that information.”
Lawmakers on Wednesday also blocked an attempt to give the public a voice in the process. House Speaker Pro Tempore Albert Sommers (R-Pinedale) brought an amendment that would have required the state’s top officials to hold a public meeting in each county where land was under consideration — Laramie, Albany, Carbon, Sweetwater and Uinta. The chamber voted against the amendment. Sommers previously called the lack of public access “a glaring omission” in the proposed process.
In the House debate, conservative lawmakers asked proponents of pursuing the purchase for a prospective price, even if it was just a “range” or a “ballpark.”
“I’ve heard everything from $400 million to $2 billion,” Gray said, “from pretty good sources actually.”
“I’ve heard that same range,” Speaker of the House Steve Harshman (R-Casper) said in response. Harshman did not know the price, he said.
Officials gave several indications they consider the potential cost to be more than $1 billion.
One such signal came when the House stripped language from the original bill that would have used the Legislature’s savings account, nicknamed the ‘rainy day fund,’ to pay for much of the purchase. House Appropriations Committee Chairman Bob Nicholas (R-Cheyenne) suggested that funding structure would draw the rainy day fund’s balance down too far.
“We’d be approaching a $500 million [balance] if this sale went through,” Nicholas said.
Including the next two years of spending, the rainy day fund’s balance is at $1.3 billion. To deplete it to $500 million, the state would have to spend $800 million on the land purchase. The bill’s original language allowed the state to use the rainy day fund for 75% of the purchase price. If Nicholas’ estimate is accurate, the cost for the land would equate to more than $1 billion.
In an interview on Monday, Harshman cautioned against trying to read into what the price could be before the state appraises the property.
“I don’t think anybody knows any of this,” he said, “I think you’ve got to go through this due diligence process. We’re going to turn this over to the executive branch and they’re going to go to work on it.”
For the first time, Nicholas also offered a glimpse at what officials think the payoff might be. Early revenue estimates from the land ranged between $130 million and $150 million a year, Nicholas said at the Appropriations Committee meeting on Monday.
The next day, he told the House the numbers suggest a good deal for the state. “On its face it looks like this land will pay for itself,” he said. “If the original numbers that were bounced around were accurate.”
Occidental had approached Wyoming, Nicholas told the House. “They came to us and the reason they came to us was because … they want to sell it all in one piece,” he said. Occidental’s board preferred a buyer with an “ethic” for the land, he said.
“They know the state of Wyoming as an entity we’ll treat it properly, we’ll have an environmental ethic if you will on how to treat this land,” Nicholas said.
Gordon told WyoFile he first began speaking with Occidental at a carbon capture event in Jackson. The event was in May, Gordon’s spokesperson said last week.
On Feb. 17, when Gordon first went public with the idea of buying the land, Harshman, Nicholas, Senate President Drew Perkins (R-Casper) and Senate Appropriations Committee Chairman Eli Bebout (R-Riverton) joined him at the press conference. State Treasurer Curt Meier and state auditor Kristi Racines were also present.
Despite the appearance of unity, interviews reveal that some supporters of the project learned of it late. “I kinda found out about this when you did,” Harshman told WyoFile. He’d previously told reporters he and others “were hearing conversations” soon after Gordon’s election.
“I heard people, citizens, talking about it,” he said on Monday.
The treasurer had also been kept in the dark, he told WyoFile. “The governor didn’t reach out to me on this one until maybe about 10 days ago,” Meier said. “This [bill] was already printed before we actually got to talk about any proposed details at all,” he said.
Gordon, Nicholas and Bebout were the “major players” on this, Meier said. “We’re all playing catch up,” he added.
On the House floor, Nicholas described being part of a small working group created by Gordon. “That group has sat down and gone through and created dozens of pages of lists of what we have to do,” he said.
The group is in the process of drafting a request for proposals to hire an investment bank to conduct an appraisal of the land, Nicholas said. The bill drafted by the House appropriates money for that appraisal.
Meier put that cost alone — paid regardless of whether a purchase is pursued — at $8 million to $10 million.
Nicholas warned the House chamber that if the state doesn’t buy the land, someone else might.
Five to 10 “serious entities” have looked at the offered land, Nicholas said. “Think about who might be purchasing this besides the state of Wyoming,” the Cheyenne Republican warned his colleagues. It could be “people who would chop it up and sell it,” Nicholas said, or “people who tie up this property so it never gets developed.”
Nicholas wasn’t able to elaborate on the entities’ identities, he wrote in a follow up email to WyoFile. “What I have heard is at least 3rd or 4th hand,” Nicholas wrote. “No real details and not sure of the source.”
Fear of who might buy the land if Wyoming doesn’t, however, reverberated through the capitol. “Would you like it to be a foreign corporation?” Senate President Drew Perkins (R-Casper) asked his chamber on Tuesday. “Would you like it to be a big multinational? Who do you want to own land within our borders?”
Occidental is considered to be a company under some distress, and one seeking to make a deal quickly to offload the assets. “I would anticipate there would be competition,” Gordon told WyoFile last week.
It could be a year before Wyoming acquires the land, and even proponents say there’s a lot stacked against success. That hasn’t stopped factions within Wyoming’s government from maneuvering to put their stamp on the process.
The House’s rewrite was significant enough to necessitate the drafting of a substitute bill. In addition to removing the use of the rainy day fund, the new bill offers the opportunity for the state to borrow some of the money through issuing bonds. It also adds more lawmakers as “liaisons” to the State Lands and Investment Board. That body is made up of Wyoming’s five statewide elected officials and under the proposed legislation will conduct much of the deliberation over the purchase.
The new House bill requires the Legislature to approve any agreement with Occidental. On Wednesday, Sommers successfully brought an amendment to require an affirmative vote by the Legislature in the House bill. The original bills gave the Legislature 60 days to act but did not require it to convene.
The changes were strong enough to prompt Gordon’s energy advisor, Randall Luthi, to call for legislative restraint. Luthi asked House Appropriations lawmakers not to “unnecessarily tie the hands of the governor.”
Debates between the branches weren’t the only ones.
On Wednesday, Bebout brought amendments to the Senate bill that mimicked the House’s work in some ways but deviated in others. The Senate kept the rainy day fund in the bill as a primary mechanism to make the purchase.
Bebout is skeptical of taking out bonds for the purchase, he said, and prefers to spend out of the rainy day fund. “It’s hard for me to borrow when we have money,” he said. Though House lawmakers worried about draining down the savings account, Bebout said it has also become a crutch. The ability to float on the savings has kept the state from choosing between budget cuts or tax increases, he said.
It would be better to invest the money in land and force a choice, he said. “At some point in time you have to make a decision,” Bebout said.
But the Senate’s chief sponsor of the bill most of all wanted to avoid getting bogged down in the details: “The important thing is to move something ahead,” Bebout said.
While the chambers debated, the treasurer’s office worried about losing control over something pitched as an “investment.”
“The only duty I had in the first bill was to write the check,” Meier told WyoFile.
Even the new bill, however, raised concerns. Deputy Treasurer Dawn Williams told the House Appropriations Committee she worried the agency was cut out. Her office was “very interested in a bill that says ‘investment of state funds’ and then we don’t see ourselves in it much,” she said.
House lawmakers want the bill to specify the lands will be managed by the Office of State Lands and Investments, the agency that manages the state’s existing lands. They also added language to specify that the new lands would be managed the same as school trust lands.
“Categorizing them as state school trust land kind of lets people know how they’ll be used,” Harshman told WyoFile. The language would allow the public to feel more confident they won’t be shut out of the new land, he said. The House pounded home the idea by adding a line about managing the lands for “multiple use.”
Officials in the treasurer’s office believe their agency is better equipped to treat the land as an investment and maximize revenues from it.
“The [Office of State Lands] hasn’t shown the propensity to be that effective in getting the revenue off of stuff,” Meier said.
Despite the doubts and divisions, most lawmakers appear to support passing the bills. Many touted the historic potential of the deal and worried about letting it go by without at least a look.
Sen. Jeff Wasserburger (R-Gillette) a former history teacher, talked about the 1867 purchase of Alaska. Senate President Perkins has said Wyoming completing the deal would mark the biggest government land purchase since that historic buy. At the time, U.S. Secretary of the Interior William Seward was mocked for pursuing the purchase, Wasserburger told his colleagues.
“It was called Seward’s folly or Seward’s icebox,” he said. Today, Alaska has a mineral trust fund that dwarfs Wyoming’s, he noted. “Did that [purchase] pay off? Yes it did.”
A rancher in Wasserburger’s district told him, “‘the only land deal I ever regretted was the one I didn’t buy,’” he said.
Such sentiments concern skeptics of the deal. In the House, Gray worried about an “irrational exuberance” for the deal building up, he said, making it difficult to walk away if the price isn’t right.
Others said they will proceed with caution.
“We’ve all heard a lot of concerns,” Senate Minority Floor Leader Chris Rothfuss (D-Laramie) said during Senate debate, “from our constituents around the state, from other legislators.”
The Legislature should let the governor’s office pursue the deal and see what he comes back with, Rothfuss said, echoing the sentiments of many. “Then see,” he said, “if it’s a benefit for the people of the state or see if it’s something that’s too rich for us, too risky for us.”
WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.
