El Paso’s ‘Deal with the Devil’ results in public land livestock industry endowment
Douglas – Past Public Lands Council president Jim Magagna spoke Aug. 18 at the annual Cattlemen’s Conference in Douglas about the El Paso/Ruby Pipeline public lands issue, and the resulting negotiations.
“About a month and a half ago a joint press release from El Paso and Western Watersheds Project (WWP) and the Oregon Natural Desert Association (ONDA) was released, stating that in return for a commitment from WWP to withdraw a threat to file a lawsuit delaying the construction of the Ruby Pipeline, El Paso would pay them $21 million into two funds set up and jointly administered – one by WWP and El Paso, and the other by ONDA and El Paso,” Magagna began.
“I assume, first and foremost, that everyone is somewhat aware of WWP. Their sole and stated purpose is to eliminate all public land grazing in the west on Forest Service, BLM and other lands,” he explained. “These funds would be used for a number of pro-conservation and litigation activities. Most notable to us was that they would also be used to buy up federal grazing permits from ‘willing’ sellers.”
He continued that a “willing” seller is almost always someone who has had enough litigation and permit pressure that they have no choice left beyond selling.
“There are confidentiality provisions on those agreements, so we haven’t seen them. But information was shared that El Paso would work with the environmental community in Congress to change the Taylor Grazing Act as it stands today. The change would allow monies from these funds to pay someone for their permit, and that permit would then be permanently retired, with no more grazing on that allotment or area. Today the BLM must re-admit a relinquished permit to a qualified applicant.
“We were able to arrange an initial meeting with El Paso leadership and placed in front of them our demand as the public livestock industry representative that those agreements be negated. Either break the agreements, find a way out of them or significantly amend them so they don’t include monies that could be used to acquire grazing permits,” said Magagna of the Public Lands Council’s demands.
“They said they would take our demands under advisement. They acknowledged they were embarrassed and walked blindfolded down this path. Their goal was to get this pipeline in the ground, and the threat of litigation was so potentially costly that $21 million over 10 years seemed like a pretty good bargain, even though it was a deal with the devil, as they’ve come to realize and believe,” noted Magagna.
A week later another meeting was held between public lands grazing representatives and El Paso.
“As I understand it, this went all the way up the corporate ladder to Houston, and the decision was made that they should not have done this and it was bad for El Paso and the industry. But, they also said that in their 100-year history they have honored all contracts, good, bad or otherwise, and they weren’t going to break this one,” explained Magagna.
He adds they did offer to go back to WWP with some changes, but that what they proposed was “significantly inadequate.”
“When it became apparent El Paso wasn’t going to beak their contracts with these organizations, we considered our options. While we could file a lawsuit as an industry, they had already been granted their permits and it was unlikely we would accomplish anything by appealing, beyond further delaying the pipeline.
“We finally told them, ‘You are empowering our enemies. If you’re not willing to undo that, or feel you can’t, then at a minimum you need to empower us so we are better able to deal with our enemies.’ There was no threat to sue, because then we would be no better than WWP. Rather, it was telling them that if they are sincere in what they’re telling us and value our relationship and want to continue working with us, they need to help us strengthen our industry,” said Magagna.
The result of the meeting was a $50 million endowment administered through a separate entity by a board consisting of an El Paso representative and a member of the public lands grazing industry.
“There will be no termination of the endowment, so long as the Public Lands Council remains in existence, so it’s basically a perpetual agreement,” explained Magagna. “If you use the typical five percent on endowments, that’s a minimum of $750,000 per year available to address public land livestock grazing issues and needs.
“The only formal limitation on the use of those funds, as agreed to with El Paso, is they won’t be used in a proactive way for litigation. The specifics of how the money will be handled and what the process will be for states or individuals to apply to use the proceeds will be worked out by the board of directors of the Public Lands Council, and does not involved El Paso,” noted Magagna.
He added that the agreement is, in principle, expected to finalized and signed by Oct. 1 of this year.
From what he’s heard, Magagna said Lincoln County is in the best position to lead a lawsuit, as they had cooperating status with the BLM. “There has been a meeting of county commissioners, and I have no idea how many counties will join in, but the lead county at this time, so to speak, would be Lincoln County.”
“No one would like to go back to the beginning more than El Paso,” said Magagna.