Let’s say we’re neighbors. You have a beautiful and valuable car, and you decide to sell it. But I like looking at it in your driveway, so I might offer you even more than it’s worth – not to sell it. I don’t want to take it away or drive it. I just enjoy looking at it from my window. So here is the money, and you keep the car.
You might think I have more money than brains, but managers of natural resources have dealt with offers like that for years. Most recently, an environmental group near Bozeman, Montana may succeed in blocking logging there for the next quarter-century – by paying the State for the timber. The group, which calls itself the “Save Our Gallatin Front,” was the highest bidder on a 443-acre timber sale, though it has no intention of removing any trees. The organization bid $400,000 for the timber, far more than its estimated value. The one other bidder, an actual timber company, offered exactly the estimated value, only to be outbid by this group, whose sole intention is to stop the use of the resources.
In most areas of natural resources law, that is called speculation, and it is illegal. There is a good reason for banning that practice. It interferes with sound resource management. The government has two reasons for selling or leasing various resources from public lands – land management first, and money second. In the past 20 years, catastrophic forest fires have consumed over 100 million acres of national forests. Millions more are dead, dying, diseased, overgrown, overly dense, beetle infested, and at risk of similar catastrophe. Restoring health to the nation’s forests requires active management, including removal of at-risk or overgrown trees, brush, and other “fuel loads,” as professional foresters call it. It is the Forest Service’s highest priority.
There are only a couple ways to accomplish that. Timber can be sold when it is healthy and commercially valuable, or the government can subsidize removal when it is not. If speculators were allowed to buy timber sales, and then not remove the material that needs removed, the government might make money – but it would not accomplish the land management goal.
The same is true of public resources like oil, gas, coal, or other important minerals. Government makes money leasing these minerals. But if it sold to people whose only interest is to stop production, then the public would be denied use of these vital resources. That is why actual production is a requirement of the lease – use it or lose it.
There are many environmental industry groups that would pay to keep these natural resources in the ground – multi-billion-dollar organizations able to outbid any sawmill or coal mine. They have wanted to do so for years, but there is a simple reason that rarely works. Federal law generally prohibits buying resources for non-use. When that happens, the government simply takes it back for resale.
The Montana case is different, because the forest belongs to the State Land Board, not the federal government. State Land Boards manage “state trust lands” for the sole purpose of raising money for public schools. They are required to get the maximum possible value, so they may not care whether a buyer uses the trees. They just need the highest price.
Montana now explicitly allows “conservation bids” (many states do not). So far, cases like this Bozeman sale are rare – thankfully. We have seen similar attempts to buy grazing rights on state lands in Arizona, and numerous other efforts to outbid traditional multiple-uses on public lands.
Speculation is especially dangerous with water, the West’s most precious resource. Western water law grants property rights to those who build systems that put water to beneficial use, for irrigation, municipal, industrial, or recreational purposes. Without that system, there could be no towns or settlements in the arid West. Because water rights are so valuable, legal documents require precise details about the exact location, use, and amount. Moreover, applicants must prove their ability and intent to use the water in the manner specified. That is called the “can-and-will doctrine” in water law. Without that safeguard, nothing would prevent rich environmental activists from buying out all the water rights in Western Colorado, for example, effectively evicting all the people and cities.
Publicly-owned natural resources can never be for sale to the highest bidder, because the public interest requires responsible use, for the greatest public benefit. The “can-and-will doctrine” is necessary for all public resources, not just water.
This column originally appeared in the Grand Junction Daily Sentinel March 15, 2019.
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