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Project Bison Bid Goes Forward

The Wyoming State Loan and Investment Board (SLIB) met today, July 6, and voted to proceed with Project Bison, in which the state will submit a bid for 1 million acres of private land and 4 million acres of mineral rights along the Union Pacific Railroad corridor in southwestern Wyoming. Known as the Anadarko holdings, the land is owned by Occidental Petroleum Corp (Oxy). The properties are interspersed with lands administered by the Bureau of Land Management in what is known as Wyoming’s checkerboard. The assets involved include trona, coal and mining, oil and gas, and the surface itself. The deal also includes mineral rights and lands in Utah and Colorado.

SLIB members include the state’s top statewide elected officials: Wyoming Governor Mark Gordon, Secretary of State Ed Buchanan, Auditor Kristi Racines, Treasurer Curt Meier, and Superintendent of Public Instruction Jillian Balow. All five voted to proceed to submit a bid.

SLIB members listened to public comments via Zoom meeting for about an hour, and a familiar refrain in the public comments was the lack of transparency by state officials in a project that would be one of the largest land deals in American history.

Although SLIB members emphasized that it was assessing the entire Oxy portfolio of assets, it was noted by Treasurer Meier that the largest part of the investment would be in trona.

Investment consultant Becky Gratsinger of RVK provided a summary of the expected rate of return on the purchase of the assets (considering returns, risks, and correlation), revealing that the expected rate of return over the long term is higher when trona is excluded from the deal, since trona is subject to higher market volatility.

Cheyenne attorney Larry Wolfe said he was astonished that “we the public know nothing. What we did hear for the very first time is that this is a trona play.” Wolfe admonished, “All of you are talking to each other, but none of you are talking to the public.”

Gordon eventually took issue with the notion that the state had lacked transparency in this process. He had noted early in the meeting that the land deal opportunity came to his attention last year and he held conversations with senior leaders of Oxy five months ago. Gordon never mentioned his interest in exploring the Oxy deal in his State of the State address at the start of the Wyoming Legislature, even though he had been holding private discussions with certain legislators about the proposal. Those discussions resulted in proposed bills setting forth the process to explore the deal could be filed two days after his address. Gordon didn’t publicly acknowledge he was pursuing the deal until a full week had passed after his statewide address, and the bills were on the fast-track through the legislature. It wasn’t for several more days after that before Gordon’s office even released a map showing where the properties were located.

The bills received heavy criticism from the public – in large part because of the lack of transparency in the process – and were amended to address those concerns before being sent to Gordon for his signature. Instead, Gordon vetoed the legislation in late March, vowing to explore the deal, now dubbed “Project Bison,” without legislative oversight, while vowing to honor all the requirements for public comment and public involvement outlined in the vetoed bill, and perhaps even exceed the amounts called for by the legislature.

Representative Chuck Gray (R-Natrona, House District 57) pointed out in today’s meeting that when members of the public complained about the lack of transparency, they weren’t expecting Wyoming to announce what its bid amount would be, but wanted to understand the state’s vision for the assets– something that has still not been clarified. There has been discussion of whether the land would be managed as state trust lands (which are not managed as public land held by other agencies), whether the legislature would grant the lands special status as investment properties, or whether some of the lands would be sold or otherwise subject to disposal.

Gordon said, “I don’t know what the final disposition of these lands will be. That will be part of the process.”

Treasurer Meier said he did not expect that Wyoming would submit the highest bid, but added that he could foresee Wyoming purchasing some of the assets from the successful bidder.

Gordon said that if Oxy accepts the bid, “There will be ample opportunity for the public to express concerns.”

Auditor Raccine said the concern about transparency is valid, and had the board discuss how public participation would be addressed moving forward. Gordon has committed to reporting the findings from due diligence to the Wyoming Legislature. Apparently when that report is released to the legislators it will then be public. Gordon said the purchase price will be part of that report, and said he has committed to holding three public hearings: in Carbon, Sweetwater, and Uinta counties. He said that much of the information about public access, access to minerals, how the assets will be managed, etc., will be subject to public disclosure, but added, “with probably some restrictions about who is getting what money from whom.”

Bids were due to Oxy on July 1, but the company extended the deadline for Wyoming’s bid to July 8th. Gordon said today that theoretically, the company has already received bids from other parties, but Wyoming has no knowledge of the details of those bidders or specific bids. “We have no idea what Oxy has in their quiver at this point,” Gordon said.

Luthi said one of three things can happen once Wyoming submits its bid: Oxy could reject the bid; Oxy could ask for further negotiations; or Oxy could accept the bid. He said that should Wyoming be the successful bidder, it would reach a purchase/sale agreement, subject to the report to the legislature and holding of public meetings. The deal would then go back to SLIB for final action.

Today’s SLIB decision authorizes the governor, treasurer, and chief investment officer to submit a bid within the parameters set by the board. These parameters include the highest possible risk-adjusted total return, due consideration of the level of safety, liquidity, and the unique circumstances of each fund. A bid may involve the entirety of the contemplated asset classes, or a portion thereof. Prior to SLIB’s final approval of a deal, the Office of State lands will hold at least four public meetings (including meetings in Carbon, Uinta, and Sweetwater counties). Prior to these meetings, a report will be made public detailing non-confidential aspects of any potential transaction.

Public Comment from Legislators:

Representative Clark Stith (R-Sweetwater, House District 48) questioned investment policy compliance issues, and expressed concern that management of the assets could become politicized. While not speaking against the deal, Stith said, “Whether it’s a good deal depends on the price.”

Representative Patrick Sweeney (R-Natrona, House District 58) congratulated the SLIB in moving forward with this “historic opportunity” which he said was “the right thing to do,” in which he “totally supports.”

Representative Chuck Gray (R-Natrona, House District 57) was critical of the proposal, questioning the true cost of the state managing the assets, as well as the statutory constraints involved in such a large investment in a single area rather than diversification.

“I have concerns on multiple counts,” he said, including the way that politics could influence the management of these lands and assets.

Representative David Miller (R-Fremont, House District 55) commented that he has “a great concern” that the deal would transfer “one-third of the mineral rights held by the private sector in Wyoming.”

Senator Eli Bebout (R-Fremont, Senate District 26) urged SLIB to move forward with Project Bison, stating, “This really is a once in a lifetime opportunity.”

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