How State Trust Lands Can Help Conservation Efforts, with Temple Stoellinger

Notable Quotes

• Nonextractive uses of state trust lands are becoming more common: “We’re seeing a general shift, particularly in the West, with more opportunities for economic development through things like conservation, recreation, and tourism. So, as that economy is increasing, people are looking to all types of land in the West, and state trust lands are among those types of land assets that are being considered … We’re also thinking about preserving open space to address landscape changes as a result of climate change. So, state trust lands are getting a bit of a refreshed look in terms of conservation value.” (9:47)
• Legal barriers to using state trust lands for conservation: “If there are legal barriers to conservation leasing, they usually look like a use-it-or-lose-it requirement, which is also called the forfeiture doctrine … If you are, for example, participating in a traditional oil and gas market, and you intend to buy for conservation use, and you’re not intending to develop the oil and gas resources, then you’re violating that agreement … with the state to drill for oil and gas development.” (14:39)
• State trust lands add up: “If we were to combine all of the state land assets (30 states have state trust lands, but the majority are focused in the nine western states), all of those state trust lands across the 30 states would make up a landmass that’s double the holdings of the US National Park Service and actually rivals that of the Forest Service. This is a lot of land that we’re talking about.” (25:30)

Top of the Stack

• “Valuing Conservation of State Trust Lands” by Temple Stoellinger
• “Opening the Range: Reforms to Allow Markets for Voluntary Conservation on Federal Grazing Lands” by Shawn Regan, Temple Stoellinger, and Jonathan Wood
• “Allow ‘Nonuse Rights’ to Conserve Natural Resources” by Bryan Leonard, Shawn Regan, Christopher Costello, Suzi Kerr, Dominic P. Parker, Andrew J. Plantinga, James Salzman, V. Kerry Smith, and Temple Stoellinger
• Stolen by Ann-Helén Laestadius
• Eager: The Surprising, Secret Life of Beavers and Why They Matter by Ben Goldfarb

The Full Transcript

Margaret Walls: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Margaret Walls. My guest today is Temple Stoellinger. Temple is an associate professor and Wyoming Excellence Chair at the University of Wyoming, where she has a dual appointment in the Haub School of Environment and Natural Resources and the College of Law. Much of Temple's research is focused on law and policy issues related to wildlife, land, energy, and other natural resources, with a focus on western public lands in the United States. Today, we're going to chat with her about some of her work in progress on the uses of state trust lands and the idea of conservation leasing on those lands.

A lot of our listeners probably know more about federal public lands in the United States. I know I do. If they're regular listeners to Resources Radio, they might remember an episode from several months ago with John Leshy, in which we talked about his book on the history of federal lands. But I'm guessing most of us know a lot less about state trust lands, where they came from, and how they're managed.

So, I'm going to ask Temple to educate us a little bit about those lands and then talk about this idea of conservation leasing. We're going to talk a little about federal lands, too, because she has some work in that area with some colleagues on conservation uses of those lands and some innovative ideas there. We're going to hear about all of these things today. Stay with us.

Hello, Temple. Welcome to Resources Radio. Thanks so much for coming on the show.

Temple Stoellinger: Hi, Margaret. It's my pleasure to be here. What an honor to be on Resources Radio, where you featured John Leshy a couple of months ago.

Margaret Walls: Yeah, he was great. If you've listened before, you know that the first thing we do is try to ask our guests to tell us a little bit about themselves. So, Temple, tell us about you. How did you come to focus your research and policy engagement on these issues of western public lands and natural resources?

Temple Stoellinger: Yeah, thanks for the opportunity to give you a bit of my background.

I actually grew up in Manhattan, Kansas, and my dad was a parks and recreation professor at Kansas State University. We spent our summers visiting as interns at various public lands around the West. My mom was from Colorado, and so I always felt a deep connection with the West and actually had a chance to transfer to the University of Wyoming to attend both undergraduate and law school here at the University of Wyoming.

But my passion really developed when I had a chance to work for a former Governor of Wyoming, Dave Freudenthal. I had a chance to work as a natural resource policy analyst and then an advisor to him on natural resources issues, and I really had a chance to learn from some of the top public-land legal experts in the country in that role. It really sparked my passion to continue to work on these subjects.

Margaret Walls: That's great. Yeah, that's cool. I know you're still really involved in a lot of policy issues in the state, so that's great. I mentioned in my intro, Temple, that most of us probably know more about federal public lands than state lands and especially state trust lands. Can you give us a little history lesson about those lands? How are they created? Where are they, and can you tell us a little bit about how they're managed?

Temple Stoellinger: I'd be glad to. State trust lands were actually developed under the Northwest Ordinance of 1785. Through that ordinance, Congress established a policy of granting lands to states upon their statehood as an opportunity for those new states entering the union to raise funding for public education and other public institutions. So, every state that has entered the Union since Iowa in 1803 has been granted lands from the federal government for the support of public schools. That practice actually went on until 1910. The last federal grant of land to states ended in 1910 with Arizona and New Mexico receiving state trust land grants.

It's interesting; the policy evolved over the years. Iowa was actually just given, out of every township, Section 16. Then, in the middle years of the federal granting of state trust land, states received Section 2 and Section 16, but then, towards the end of state trust land granting, Arizona and New Mexico actually got four sections of state trust land. So they got 2, 16, 32 and 36. So, there has been a bit of evolution in terms of how much land states were given.

If those sections were already occupied with settlement, for example, maybe a federal reservation of some kind, states were given the opportunity to select lands in lieu of [settled lands]. That has resulted in some different layouts of state trust lands, particularly if you look at the map in Arizona and New Mexico to see where state trust lands are located, because those grants of land were pretty late in 1910.

Margaret Walls: Those section numbers, Temple—are those particular locations in the state? Just to clarify that.

Temple Stoellinger: Exactly. States are divided into what we call townships. With each individual township, we have sections ranging from Section 1 all the way to Section 36. It's just a way of thinking about how to divide and identify land on ordnance maps.

Margaret Walls: Tell us how they're managed. How do states manage those lands? I assume you said they're for schools and other public uses, so they're getting revenues from them. Tell us a little bit about those things.

Temple Stoellinger: Exactly. They can be considered a type of public land in some aspects, but in other ways, they're pretty unique from the federal public lands that we're used to thinking about. That's because they're encumbered with a fiduciary duty to manage those lands to generate revenue for the public schools and for other public beneficiaries. That's different from the multiple-use management requirement, like forest service land or US Bureau of Land Management (BLM) land is managed under. That is not true with regard to state trust lands. It doesn't have a multiple-use management requirement. Instead, it's really governed by this idea of a fiduciary duty and the need to generate revenue for beneficiaries, primarily the public schools within Western states.

Margaret Walls: Right. Are they getting most of their revenues from energy leasing, or where are the revenues coming from?

Temple Stoellinger: It really depends on each state. Oil and gas leasing is particularly high in states like New Mexico and Wyoming, for example. In states like Arizona, we see land sales and commercial land leasing being the highest revenue opportunities. Then, if you look to states along the West Coast, like Oregon and Washington, we actually see timber harvesting bring in a lot of revenue, as well. There's always a bread and butter of grazing leasing in a lot of these western states, as well as state trust lands; it brings in some revenue.

Margaret Walls: So, it's a wide range of things. You mentioned the spatial or geographic pattern, and I know it's a checkerboard pattern in most of the states. I've seen you and your work refer to it as the “blue rash” because of how it shows up on certain maps of the federal government. Tell us how that checkerboard came about? What are some of the implications of it?

Temple Stoellinger: I'd be glad to. The “blue rash” is an interesting way to think about state trust lands. It's also interesting to think about them as an accident of history, because they really were just granted on those section numbers. The fact that there's assets on those sections that were granted is really an accident. It wasn't necessarily intentional. So, as a result, state trust land portfolios are not very well diversified, because we still see the land use pattern representing those original grants of land.

Unlike federal land holdings, which cover large contiguous areas, state trust land parcels are often, as you noted, in a checkerboard pattern, and they're often interspersed with other private lands and even other types of federal lands. That does result then in that checkerboard pattern in a scattering of state trust lands across a landscape. Montana, for example, has 52 million acres of state trust lands, but that land is actually divided into 16,000 individual parcels.

Margaret Walls: Wow. That's a lot. I read in your draft paper that it turns out that checkerboard has provided some opportunities for conservation and habitat. Can you talk about that a little bit and explain why that is?

Temple Stoellinger: That largely stems back to that initial scattered placement of state trust lands because of its pattern and its accidental history. A lot of those sections of land haven't been well developed, and that maybe had negative economic impacts for states to start, but maybe that's actually providing an opportunity now, because we still see a lot of original land cover on these lands—grasses or timberland cover which has and can continue to provide habitat, because it is still an undeveloped state.

Margaret Walls: Let's pivot to those values a little bit, and let me ask you specifically about conservation leasing, which is the topic you've been thinking about and how that comes into play. What's happening with the value for conservation on these lands? I think it might be going up recently. Maybe you could provide some examples of what these values are. What's happening on the lands that makes them have value, and why does the value seem to be going up these days?

Temple Stoellinger: We're seeing a general shift, particularly in the West, with more opportunities for economic development through things like conservation, recreation, and tourism. So, as that economy is increasing, people are looking to all types of land in the West, and state trust lands are among those types of land assets that are being considered. We are seeing expansions of recreational opportunities on state trust lands, but then also, as we think about preserving wildlife habitats and some of the opportunities that are available now to fund habitat conservation, state trust lands are also getting a stronger look in that regard as we're learning more about the value of migration habitat for ungulates and other types of species. We're also thinking about preserving open space to address landscape changes as a result of climate change. So, state trust lands are getting a bit of a refreshed look in terms of conservation value, like many areas of land in the West.

Margaret Walls: How would conservation leasing work? Tell us about that, and is it happening at all right now? Do you have different outcomes across states? Is it happening or are there barriers to it?

Temple Stoellinger: It is already happening. So, in this draft paper that we're working on, we're actually trying to present a taxonomy of state conservation leasing options, because it's taking different forms in different states. You have traditional conservation leasing, which there's a couple of ways to think about how a conservation lease could be let. It could be direct participation in an existing resource-commodity market. For example, people with a conservation interest could bid on an oil and gas lease in a competitive oil and gas market. Other states are looking at separate noncompetitive leasing opportunities for lands with conservation value.

We've also seen states explore stewardship programs, where if you are, for example, grazing cattle but you're doing some additional land-conservation work on top of your grazing lease, there's some opportunities for either reduced grazing costs or funding opportunities for that conservation work.

We're also seeing states start to explore this idea of ecosystem-service leasing for state trust lands. Other states have leased their state lands to other agencies within their state. So for example, maybe the state lands office would lease a section of land to a game and fish office to preserve some critical wildlife habitat or maybe to the state parks office to develop some new recreational assets.

We're also seeing some states explore the idea of a conservation easement on state trust land. Then, we see a catchall in the form of a special-use lease that's designated for conservation purposes. We also see land exchanges and sales, as well, with conservation-oriented buyers. So, there is a pretty full range of what state conservation leasing and conservation sales options there are that are being implemented across states currently.

Margaret Walls: Right. I'm interested then, if they have this fiduciary responsibility and they need to raise revenue. I assume some of those options are bringing in revenues and some of them maybe not so much, right? Do they think about that kind of thing when they're choosing what to do?

For example, you mentioned that they might lease the land to go from being a state trust land to a state park or something. I guess you could charge interest fees to a state park, which probably is not a big revenue raiser, where some others might be more. How does the revenue aspect play into the decisionmaking?

Temple Stoellinger: I think if they were to lease to, for example, a state park, the lease rate would be based upon fair market value to begin with. Then, maybe, there could be opportunities for a percentage of entrance fees to come back to state parks. But at the baseline, the original lease would likely need to be at market value, and if not, then the beneficiaries of that trust would have the opportunity to complain or to litigate to enforce that fiduciary duty.

Margaret Walls: So, it varies across states. Are there some states where there's more of a barrier to this than others, for example, some of the states that do have more oil and gas? What's the story there?

Temple Stoellinger: I think that's definitely correct. There are, in our estimation, both legal barriers and policy barriers. On the legal front, we've tried to assess the legal framework with regards to state lands for the nine major western states. If there are legal barriers to conservation leasing, they usually look like a use-it-or-lose-it requirement, which is also called the forfeiture doctrine, which means if you are, for example, participating in a traditional oil and gas market, and you intend to buy for conservation use, and you're not intending to develop the oil and gas resources, you're violating that agreement that you had with the state to drill for oil and gas development. That's partially based on the fact that there is value associated with buying a lease for oil and gas development, but the majority of the money that would come back to the state from an oil and gas lease is actually through the revenue generated from the royalties of the produced oil and gas development. That presents an area where I think there needs to be additional studies to think about how the pricing structure for conservation leases would work, knowing that there's both the lease value with regards to oil and gas leasing and, really, the royalty revenue that we need to be looking at in terms of what traditional leases are bringing back to the state and to the beneficiaries. That’s the legal-barrier side.

Then, on the policy-barrier side, there are concerns from existing resource users about additional people entering a market. There's also concerns from a broader set of stakeholders that can include communities and also those who benefit from the existing pattern of use. So, think about some of the suppliers in the communities that depend upon selling goods to those in the traditional market.

Then, there may even be opposition from conservationists themselves, who may object to a market-oriented approach and may be averse to paying for conservation on state trust lands and wonder about the additionality—if that land isn't already being developed, if there is a need to pay for conservation if that's already happening.

Margaret Walls: I didn't think about that last point, but that's a good one.

Maybe you should tell people what you mean by additionality? I know what you mean, but can you say a bit more about that issue?

Temple Stoellinger: Sure, and you're the economist, Margaret, not me, so you may have to help me out here as a legal scholar. It's an economics term, but basically it just means if the land is already being conserved without having to bid for a conservation lease, what's the point in bidding and expending money? Are you really adding any conservation value, because it is already being conserved? So, then, maybe you would only jump into that market if you felt like there was a threat to that existing status quo of conservation.

Margaret Walls: But the whole fiduciary-responsibility thing layers over that, too. So that's an interesting issue.

Let me switch to federal lands for a bit; I want to ask you about a paper you have on conservation on federal grazing lands. First, I want to ask you to clarify what the rules are for oil and gas leasing on BLM lands. I feel like I know a little bit about how people have tried to bid on those leases and then not drill, and that is a no-no on BLM lands, I believe. Is that right? Or what are the rules on federal lands?

Temple Stoellinger: That is correct. The example that comes to my mind is when Terry Tempest Williams bid on an oil and gas lease parcel in Utah on federal BLM land and was the highest bidder on that particular parcel—so was successful in that sense—but had disclosed her intention not to develop that parcel for oil and gas development. So the BLM sent a cancellation letter that was based upon language in the Mineral Leasing Act that includes that use-it-or-lose-it language (or that forfeiture doctrine), which is, if you don't have the intent to develop, then you can't legally hold a federal oil and gas lease.

Margaret Walls: Have they talked about changing that at all, or would that require Congress to act? Is that right?

Temple Stoellinger: Yes, that would require Congress to act, and that's a statute that's been in place for a long time. So, it is probably very unlikely that we would see changes to the Mineral Leasing Act.

Margaret Walls: Well, that brings up grazing lands. I know you have a law review paper with some colleagues that looks at conservation on federal grazing land. Some of our federal lands are used for livestock grazing, and you just told us state lands do, too. Maybe you can start by explaining that to folks. You looked at and found some voluntary conservation options, so maybe you can then tell us about that, as well.

Temple Stoellinger: The number-one use of public lands is for livestock grazing—cattle or sheep. This is largely governed under the Taylor Grazing Act and the Federal Lands Policy and Management Act, or FLPMA. There are requirements, particularly under the Taylor Grazing Act, that if you're going to hold a grazing lease—let's say on US Forest Service land or Bureau of Land Management land—it has the same use-it-or-lose-it requirement. So, you have to have the number of livestock out on the landscape grazing that your permit allows you to. If you actually put less than that number out, the Forest Service or the BLM could grant an additional lease on top of your lease to somebody else who would fulfill that quota for the landscape.

This paper looked at a couple of things when thinking about how to create some more flexibility in the federal grazing landscape. The first would be thinking about opportunities for voluntary buyout if there's, let's say, carnivore conflict in a particular area. The grazing lessee on federal land would, in that situation, voluntarily take a buyout payment from a conservation buyer to stop grazing that particular piece of land. Or it could be an environmental concern. Maybe there's a conservation group who would pay, again, a voluntary livestock lessee to have less livestock on the landscape to reduce some of the environmental impact, maybe in a particularly sensitive area.

The concern with both of those is, one, that lose-it-or-use-it requirement, and then also just the temporary nature with regard to buyout. The fact that one lessee takes a buyout doesn't mean the forest service or the BLM could then turn around and lease to somebody else. They could create a little bit more permanency by closing an area to grazing leasing in a land management plan, but that plan is reversible by future administrations. So, there is not a lot of durability around grazing buyouts.

In that particular paper, we were particularly excited to find some regulatory opportunities to add some more durability to voluntary grazing buyouts, because, as I just noted with the Mineral Leasing Act, it's unlikely that we'll see revisions to statutes in these spaces. To that extent, there's an opportunity from some regulatory form, I think, that we have more likelihood of pursuing creative opportunities like voluntary grazing buyouts.

Margaret Walls: Just to clarify—are some of these going on now or not? Or is this just a proposed view of what could happen?

Temple Stoellinger: No, there definitely are voluntary grazing buyouts happening in many western states, and some of them have actually been accompanied with federal statutes for specific areas. So, for example, if there's a wilderness area designated, the statute designated in that wilderness area may say, “If there are voluntary grazing buyouts, then that grazing land will be permanently withdrawn from grazing.”

So, there's a pretty wide variety of how voluntary grazing retirements are occurring on federal public lands, but they are still limited. This article looks at opportunities for expanding those opportunities.

Margaret Walls: Following up on that, and also following up with the state trust lands—and maybe there's some differences you want to highlight between state and federal—what do you think we need to move forward with conservation leasing and these other similar kinds of approaches that could use these lands in alternative, less extractive, maybe more conservation-friendly ways?

Temple Stoellinger: I think this is a great space for some additional research. In particular, some interdisciplinary research that includes lawyers and economists and social scientists and probably ecologists, as well, in raising awareness for the opportunity. But also thinking through some of the sticky policy and legal issues we know exist, thinking about how to address community impacts, and thinking about that pricing structure. In particular, as we think, if there are competitive lease markets with existing traditional users, how do you think about bringing in similar revenue to what oil and gas royalties pay? Thinking about attainment of management goals, like opportunities where livestock are utilized to help reduce fire risk. If an area is then conserved, how do we still address some of those management goals? Also thinking through concerns about speculation.

Also, at that point, I was mentioning additionality and the willingness of conservation communities to pay. Then, I think in general, it would just be great to do some analysis to start to think about how much revenue could be generated and share that information with states and stakeholders so they can start to think about this as an additional tool in the toolbox.

Margaret Walls: Right. I am throwing this question out of left field a little bit. It's occurring to me that another use of public land—state or federal—is renewable energy, as we move away from fossil fuels in this country. Is that another use of these lands? Is there any conflict there? I know there are conflicts with conservation in some places with renewable energy projects, but what's going on in that regard? Is there anything that you know about there?

Temple Stoellinger: Yes, there definitely is leasing of state trust lands for renewable energy. There was a great paper, I can't remember exactly who wrote it, that analyzed renewable energy leasing across the major state trust land states and talked about how that opportunity was expanding. Through our research, we pointed to New Mexico as a state that has really increased revenue generation on state trust lands. Part of that increase in portfolio has been a focus on renewable energy, and they have raised some pretty significant capital around renewable energy development on state trust lands.

Margaret Walls: These are tough decisions about what to do, exactly, aren't they? It's a complex web of values and costs to consider.

Temple Stoellinger: It is. And that's why state trust lands, I think, are such an interesting place to start to think about conservation leasing because of that fiduciary requirement and that fiduciary duty.

Then, just thinking about how you were noting at the beginning of the interview, not a lot of people think about state trust lands. But if we were to combine all of the state land assets—30 states have state trust lands, but the majority are focused in the nine western states—all of those state trust lands across the 30 states would make up a landmass that's double to the holdings of the US National Park Service and actually rivals that of the Forest Service. This is a lot of land that we're talking about.

Margaret Walls: Oh, wow.

Well, Temple, thank you. We always close our podcast with a regular feature called Top of the Stack, and you know I'm going to ask you this. We always ask our guests to recommend something to listeners—a book, a podcast, an article, or anything really that might've caught your attention lately. So, Temple, what's on the top of your stack?

Temple Stoellinger: I actually have two books that are on my bedside table right now I thought I'd share. The first is a book that my book club is reading, called Stolen by Ann-Helén Laestadius. She's a Swedish novelist, and her story follows a young Sami girl as she struggles to defend her family's reindeer herd and her Sami culture. So, that's been a really fun book to dig into.

The second book I'm reading right now is a book by Ben Goldfarb, who's an environmental journalist, and he wrote this terrific book called Eager: the Surprising, Secret Life of Beavers and Why They Matter. I didn't expect to like this book as much as I do, but it's a really interesting story about how we eradicated beavers off the landscape in the United States and the ecological implications that followed, and it is just a compelling story for the reintroduction of beavers back on the landscape and how an unlikely bedfellow of people are advocating for beaver restoration, including environmentalists, but also ranchers, as well, because they see it as an opportunity to restore riparian areas and actually add some water storage onto their landscape.

Margaret Walls: That's great. I've got to look that book up. That sounds really interesting.

Thank you so much, Temple. It's been really a pleasure having you on Resources Radio. I'm so glad we were able to have you on to educate our listeners about public lands that they might not know as much about—state trust lands—and just this whole idea of using those lands for conservation purposes. Thanks so much for taking time to come on the show.

Temple Stoellinger: It was my pleasure, Margaret. Thank you for the invitation.

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