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Funds quickly allocated in $5 million grant program for Utah's oil, gas and mining industries

Funds quickly allocated in $5 million grant program for Utah's oil, gas and mining industries

(Scott G Winterton, KSL, File)



Estimated read time: 3-4 minutes

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SALT LAKE CITY — Utah oil, gas and mining companies applied this week for a slice of a new $5 million grant program set aside by the state Legislature for an industry hit by the coronavirus pandemic.

Applications opened Tuesday morning for the program, which is being administered by the Governor's Office of Economic Development and the Governor's Office of Energy Development. The executive director of the energy development office, Rob Simmons, told KSL.com that, for all intents and purposes, the money is fully allocated already.

"They still have to go through the process of approving all of the applications," Simmons explained, but he believes they've received enough applications to distribute the funds to qualified companies.

"This is a unique grant that, working with the Governor’s Office of Energy Development, we’re excited to provide to businesses in the important oil, gas and mining industries," said Val Hale, executive director of the economic development office, in a news release last week. "COVID-19 has brought challenges to many industries in our state, and we’re grateful the Legislature allocated federal CARES Act funds for this new grant program."

The CARES Act was a massive relief bill passed in March of this year that sent checks to millions of Americans and allocated billions of dollars to companies of all sizes in an effort to bolster a teetering economy. The Utah Legislature was tasked with allocating some of that funding, which has required four special legislative sessions so far this year.

The Oil, Gas and Mining Grant program was created by a bill, primarily sponsored by Orem Republican and Senate Majority Whip Dan Hemmert.

Healthy Environment Alliance of Utah executive director Dr. Scott Williams said in a statement he is disappointed renewable energy companies didn't receive help from the Legislature as well.

"We recognize that every industry has been hit by COVID-19, but we are disappointed that the Utah legislature favored the oil, gas, and mining industries to receive CARES funding," he said. "When they were asked to expand this new grant to include the clean energy industry, which is also struggling under COVID-19, legislators said 'no,' giving a market advantage to polluting energy industries over clean ones. We are hopeful that future grants will include the clean energy industry and that they will also focus the use of these funds to directly assist the front-line workers who are struggling the most."

Simmons said his office regularly, even primarily, aids the renewable energy sector in the state. "Most of the incentives we administer are focused on renewables," he said.

But 2020's unique circumstances — in which demand crashed while supply was deliberately driven through the roof, resulted in temporarily unprecedented negative prices for West Texas Intermediate crude — necessitated action on behalf of the oil and gas industry, Simmons said.

And most renewable sources are used to generate electricity, he said, which didn't see a major drop in demand. Simmons also pointed out that many oil and gas companies have invested in cleaner methods of extraction and consumption, including cleaner-burning Tier 3 gasoline.

Even though the grant funding is likely allocated, Simmons added that he hopes to work with the Legislature in the future to deliver more aid to "deserving companies who maybe weren't able to get the funds."

"After we've had a chance to evaluate that, we'll certainly work with the governor's office and the Legislature to potentially, maybe, finding some additional money for the program."

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Graham Dudley reports on politics, breaking news and more for KSL.com. A native Texan, Graham's work has previously appeared in the Brownwood (Texas) Bulletin and The Oklahoma Daily.

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