What’s in store for Wyoming energy?By Dustin Bleizeffer, with contributions from Gregory Nickerson
In the years and months ahead of the Democrats’ big win in the general election, neither environmentalists nor fossil fuel proponents felt that their causes were fully embraced by the Obama administration.
Those contrasting views are very much at play here in Wyoming where our economy is overly reliant on the extraction of fossil fuels (coal, natural gas and oil account for more than half of the state’s revenue) and where a political minority has a small influence on the gravitational pull toward a carbon-constrained economy.
For a glimpse into that frustration among Wyoming leaders, look no further than an address by Wyoming’s two U.S. Senators to the Petroleum Association of Wyoming back in August. Sen. Mike Enzi (R-Wyoming) said president Obama was “waging a war against energy.” And U.S. Sen. Barrasso (R-Wyoming) said the Obama administration was conducting a “regulatory jihad” against fossil fuels.
On the other side, noted Wyoming environmentalist and founder of High Country News Tom Bell, recently editorialized “Mankind and our civilization are at stake. If we do nothing to stop carbon dioxide from going into the atmosphere, planet Earth will face a future similar to that of Mars today. We are foreclosing the future for our children and grandchildren. … To do something about carbon means reducing the use of coal and oil. In Wyoming, that is speaking heresy. But we must begin to talk about it before it is too late.”
So what’s in store for Wyoming under a second term of the Obama administration?
“It’ll probably be like it’s been; slow permitting, slow leasing,” said Bruce Hinchey, president of the Petroleum Association of Wyoming.
Several large natural gas drilling projects in Wyoming have been delayed for years in the federal review process which, coincidentally, has taken place during a period of low natural gas pricing. Industry officials expect those projects — more than 20,000 new wells — will eventually move forward, but not without some wrangling over mitigation requirements that seem to become more stringent.
Industry and environmental interests clash on whether that delayed process stems from an honest realization that heavy industrial development has had measured, and at times unmitigated, impacts to wildlife and the environment or whether it represents a distaste for fossil fuels in the Obama administration.
Hinchey said continued access to federal minerals will likely remain a struggle under Obama’s second term, making it more likely that the industry will be forced to seek out plays on private lands, and even overseas. Despite President Obama’s call for more domestic drilling, Hinchey said the industry is likely going to have to battle Interior agencies in court.
Yet the environmental community still wonders whether President Obama will temper his call for more domestic energy development with a move toward more care in protecting the environment and cutting carbon emissions.
“The good news is that a number of initiatives will stay in place,” said Richard Garrett legislative and energy advocate for the Wyoming Outdoor Council. “For example fuel economy standards will be implemented – something that when fully realized will reduce our per vehicle consumption of oil. We might see the Production Tax Credit extended for renewable energy. The EPA’s carbon emission restrictions on coal fired generation should be secure. All of these are important building blocks to address climate change.”
Energy worries in Wyoming
After the election, Gov. Mead questioned Obama’s stance on coal. “I don’t think the current administration has a full appreciation of what the value of affordable American energy is to the economy,” Mead said during a press conference on Wednesday.
Mead said he preferred Romney’s stances on the development of domestic energy, particularly in Romney’s recognition of the value of coal, one of Wyoming signature resources.
“I don’t think that the president in his first four years has really appreciated and grasped the importance of coal to the country. I think coal has to be part of Wyoming’s future and importantly I think has to be part of America’s future. The fact is that it’s a fuel source that allows us to produce electricity at a very competitive rate,” Mead said.
Many in the environmental community worried that a Republican White House and Republican-controlled Congress would lead to the disembowelment the U.S. Environmental Protection Agency, replacing scientific formulas with cost-benefit analysis for setting standards. Now, with a second Obama term — and the Democrats retaining control of the U.S. Senate — many environmentalists expect President Obama to strike a balanced approach to domestic energy development and that he will address climate change in a more meaningful way.
“My expectation is that President Obama will continue to work on climate change — he said as much when he acknowledged his reelection and Senate Majority Leader Harry Reid has expressed his support, too,” said Garrett.
Since the reelection of President Obama, some in the fossil fuel industry are sounding a conciliatory tone, yet still sticking to their guns, insisting that too bold a move toward carbon reductions will only lead to more litigation.
“The electorate has spoken, and I’d like to offer congratulations to President-elect Obama,” said Greg Schaefer, Arch Coal, Inc. vice president, external affairs, western region. Arch has major coal mining operations in Wyoming.
“Like it or not, he is our president for the next four years, and we’re going to have to work with the administration,” Schaefer continued. “My hope is that during this next term he does like Bill Clinton and moves to the center.”
However, Schaefer said the coal industry is no more likely to go with a cap-and-trade approach to curbing greenhouse gases under a second Obama term.
Wyoming House Majority Floor Leader Tom Lubnau (R-Gillette) said his constituents in the coal-rich Powder River Basin are “very scared.”
“We see huge deficits, higher taxes but no effort by this administration to produce anything that’s competitive in a free market economy,” Lubnau told WyoFile after the election. “If you drive up the price of electricity you drive up the price of cars and goods and it doesn’t compete well with the world economy.”
Lubnau said Wyoming’s coal industry will rely on growing exports to Asia to maintain a strong level of production, adding that coal exports will also help the rest of the nation.
“Exporting energy and becoming an energy exporting nation is the key to saving our economy, and it makes me sad that there are individuals who would interfere with what I see a clear solution to a prosperous future to the country,” said Lubnau.
“We need to develop a process to defend our minerals and our sources of revenue or we’re going to have huge budget shortfalls which will impact the ability of the state of Wyoming to continue to provide the services its providing and the salaries its providing to folks around state,” said Lubnau.
Wyoming Senate Minority Floor Leader John Hastert (D-Green River) agreed that Wyoming must fight during the next four years to maintain its energy industries.
“As far as energy goes, I know that there are certainly a lot of concerns over coal, and so I’ve got to keep an eye on that because coal is part of what makes Wyoming tick, and we desperately can’t afford to have reductions in coal,” said Hastert.
— Dustin Bleizeffer is WyoFile editor-in-chief. Reach him at 307-577-6069 or firstname.lastname@example.org. Follow Dustin on Twitter @DBleizeffer. WyoFile reporters Gregory Nickerson and Kelsey Dayton contributed to this report.
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