The following story was reported by The Utah Investigative Journalism Project in partnership with Salt Lake City Weekly.

When Utah officials awarded a tax credit to one of the state’s largest oil companies, at least one member of the voting board knew that environmentalists would make noise about a corporate handout to a multi-billion-dollar company.

The Utah Energy Infrastructure Authority Board recently approved SM Energy’s application for the High Cost Infrastructure Tax Credit for operations in the Uinta Basin, where it began drilling 350 to 400 new wells in 2024.

The state program allows companies to claim 50% of infrastructure costs for approved projects ranging from energy delivery to mineral processing. Credit is given retroactively after the infrastructure is created.

Board member Lynn Jackson, who described himself as a “pro-mining” geologist and applauded SM Energy’s operations, questioned the wisdom of approving the credit. He said while the company would bring in jobs and other economic benefits, approval would result in “a really big loss of tax revenue” and that there is already considerable infrastructure in the basin.

“The optics of this to that community [environmentalists] … is that we’re subsidizing a great big, multi-billion dollar oil and gas company,” he said during the board meeting. “I think you’re going to be able to go through with your development whether you get this tax credit or not.”

The Office of Energy Development, which oversees the board, declined to say how much the tax credit is for, stating it couldn’t disclose taxpayer-specific information. It also redacted a copy of SM Energy’s application for the credit to remove information on the overall cost of the project, the cost of the project’s infrastructure and projected construction timeline.

Instead, the office told The Utah Investigative Journalism Project it has approved 20 companies for the tax credit since its inception in 2016, totaling a lifetime potential of over $3.4 billion in credits. Only four companies have claimed the credits so far, with claims totaling over $17.5 million.

The office did not respond to a question about what kinds of projects had been approved for the credit but did provide a list of the 20 companies. They included household names like Facebook and Chevron as well as lesser-known entities like egg producer Cal-Maine Foods and waste management service Wasatch Resource Recovery.

Arlene Martinez with Good Jobs First — a policy research center focused on corporate and government accountability in economic development — said it’s impossible for the public to evaluate whether the tax credit approval is a sound policy choice without having all the details.

Some states publish recipients of tax credits and the amount each recipient received. Massachusetts, for example, began requiring public disclosure of that information in 2010.

“The state should absolutely release that information because at the very most basic level, the public should be able to know what company is getting an incentive, how much the total value of that incentive is and what (the public) is getting in exchange,” Martinez said.

Closed Doors

For environmental activist Lionel Trepanier, the lack of transparency is concerning. He’s subscribed to the board’s email updates for several years and said its meetings are opaque.

He provided the UIJP with copies of emails with the Office of Energy Development in which he requested a copy of SM Energy’s application prior to the board’s vote on Jan. 23. The office eventually directed him to make a formal records request and did not provide the documents until Feb. 2 — 10 days after the vote and 12 days after Trepanier’s initial request.

Without those documents, Trepanier said it wasn’t fully clear what the board was voting on while he watched the meeting. “Here, there was no public comment, I think, solely because of the lack of awareness,” he said. “In a democratic society, I mean, this stuff is set up for the public to be aware about what the government’s doing … this is taxpayer money. This is real. This is people’s lives. The choices are being made between, what? Childhood and maternity care and giving a subsidy to the biggest oil producer in Utah?”

OED Deputy Director Tracy Rees said the board is in compliance with all public notice requirements in response to a query from the UIJP about the public availability of the board’s agendas.

A search of the state’s public notice website did not show an agenda or any meeting materials posted for the board meeting involving SM Energy’s application. State law requires public entities to publish meeting times and locations as well as agendas at least 24 hours in advance.

Rees said going forward, her office would begin including agendas in its post-meeting publications on the public notice site.

“The Utah Office of Energy Development’s role with respect to the High Cost Infrastructure Tax Credit is limited to administering and implementing the program in accordance with statute,” Rees said over email. “Our responsibility is to ensure the process is transparent, compliant with state law and fiscally accountable.”

SM Energy did not immediately respond to a request for comment.

Skyrocketing Growth

The Uinta Basin, which includes Duchesne and Uintah Counties and the Uintah and Ouray Reservation, is home to “world-class” geology, according to Michael Vanden Berg, the ​​Utah Geological Survey’s energy and minerals program manager.

“It’s just the right types of rocks at the right depth to generate a lot of oil,” Vanden Berg said, adding that the basin is responsible for 93% of the state’s crude oil production. “The wells that these companies are drilling right now are some of the most successful wells in the contiguous (onshore) United States.”

But that unique geological combination wasn’t always as profitable. In fact, statewide oil production has almost quadrupled in the last 25 years, with things really ramping up in the past five years, he said.

Now, business is booming in the Northeastern corner of Utah as oil and gas companies like SM Energy produce tens of thousands of barrels of oil in the Uinta Basin each day.

The industry appears well poised for additional growth with plans underway for increased in-state refining, a railway that would increase oil transportation capacities and what Vanden Berg said are plans to improve infrastructure to load oil onto trucks and trains. The only caveats to that industry growth, he added, will be any challenges to addressing those transportation challenges as well as drops in oil prices.

For the time being, however, SM Energy is raking in the profits. The company’s 2025 end-of-year report to the Securities and Exchange Commission showed it generated $648 million in net income and ended the year with $9.3 billion in assets.

The company also recently completed a $12.8 billion merger with Civitas Resources. The combined company is in the top 10 independent oil producers in the country, according to TGS Energy Data & Intelligence.

Fair Trade

SM Energy outlined big goals for how its operations would benefit Utah, but subsidy researchers are skeptical.

“We take pride in operating in a safe and responsible manner,” reads the company’s tax credit application, “and we view the local communities where we operate as important stakeholders in our operations.”

The application goes on to estimate that its operations will infuse billions of dollars into the state economy and create hundreds of jobs.

“Jobs are always the biggest reason that companies will use for tax breaks. It’s the biggest carrot that they dangle,” Martinez observed. “If a company wants to hire through temp agencies and pay minimum wage, that’s the company’s choice. But once you’re asking for a public handout, once you’re asking for the taxpayers’ money, then the government has an absolute responsibility, in exchange, to add strings.”

Ideally, she added those strings would require jobs to hire locals and create full-time, permanent jobs with benefits whenever possible.

A company with a history of labor or environmental violations is a red flag, Martinez added.

Her organization’s online corporate crime and misconduct database also lists dozens of environmental-related violations and government-contracting offenses. Penalties for those violations total just over $10 million.

The UIJP also identified several lawsuits within the past five years against SM Energy, alleging unpaid overtime wages, past due invoices and underpaid ​​royalties.

Beyond jobs, the economic benefit to Utahns also comes from the royalties oil companies are paying to the land owner as well as severance and property tax on the infrastructure and conservation fees.

“We export a significant amount of that oil now, but there’s still a lot of economic benefit to having increased oil production in the state of Utah,” Vanden Berg said.

Rees said that project necessity is part of the board’s multi-factor analysis to determine what projects to approve for the tax credit. In the end, she added, no single factor determines if a company gets the incentive.

Instead, the board evaluates the project as a whole to ensure it lines up with Utah’s broader energy and economic goals.

“While initial investments may be made without this incentive, the tax credit is vital for sustaining investment throughout a project’s lifecycle,” Rees wrote. “By mitigating the risks associated with high-cost, long-term developments, the credit encourages ongoing funding, continued investment, and economic benefits to the state for years to come.”

Doug Koplow, an energy subsidies researcher, stressed that the more likely the activity in a proposed project would have happened anyways, the lower the economic benefit of the subsidy.

Martinez agreed, stating that governments “shouldn’t be paying companies to do what they would already do.”

“Oil and gas subsidies tend to be a kind of subsidy that generally is not a great use of the public’s money,” she added. “There are only so many places you can drill for oil and gas, so you are not necessarily incentivizing behavior in most cases where you’re giving oil and gas companies money, you are just helping offset their costs.”