Basin Electric Cooperative's Dry Fork Station, shown here last summer, is the newest coal-fired power plant in the nation. Wyoming's Integrated Test Center is attached to the plant, where researchers hope to come up with uses for carbon emissions. (Andrew Graham/WyoFile)

Wyoming is collaborating with the Trump administration to develop strategies to extend the lives of the nation’s aging coal-fired power plants — the primary customers of the state’s coal mining industry.

The suite of initiatives announced Thursday by Gov. Mark Gordon and U.S. Environmental Protection Agency Acting Deputy Administrator Doug Benevento include a rollback of an Obama-era rule that would have further limited the volume of toxins that coal plants can dump into waterways — a change they say will save coal-plant operators an estimated $140 million per year nationwide and $8.1 million per year in Wyoming alone. EPA has also granted Wyoming regulatory primacy over injecting CO2 underground for permanent geological storage in the state.

The initiatives also include a public-private plan to demonstrate geologic sequestration of coal-derived CO2 near Basin Electric’s Dry Fork Station coal-fired power plant in northeast Wyoming, as well as a Wyoming taxpayer-funded lobbying effort to oppose coal plant retirements in other states.

Thursday morning’s joint press conference to discuss the initiatives included members of EPA, University of Wyoming School of Energy Resources and other state officials.

“Wyoming has been leading the way [on coal carbon capture and sequestration technologies] for a long time,” Gordon said. “I think we just saw yesterday that this summer was one of the hottest summers on record. There’s a concern about CO2 being in the atmosphere, and Wyoming really has led the charge on addressing this climate challenge with carbon capture and sequestering.

“There have been significant events this last couple of years,” Gordon continued, “particularly this year, that affect the future of Wyoming, Wyoming coal and power plants that burn Wyoming coal.”

The coal-fired electrical Naughton Plant near Kemmerer. (Angus M. Thuermer, Jr./WyoFile)

The nation’s aging fleet of coal-fired power plants make up more than 90% of Wyoming coal’s customer base, much of which is no longer cost-competitive. Nationwide, utilities are accelerating plans to retire coal-fired power units and, equally devastating to Wyoming’s coal industry, they are operating coal plants at much lower capacities. 

For much of the 2010s, cheap natural gas out-competed coal for reliable, low-cost electrical power. Now, even new renewable energy out-competes existing coal-fired power on cost to utilities and ratepayers. The unsubsidized cost to develop wind energy declined by 70% since 2009, according to University of Wyoming energy economist Rob Godby. The result is that Wyoming’s coal industry — one of the state’s largest revenue sources that has provided a financial foundation for schools, state and local governments for nearly five decades — is rapidly shrinking. The industry is shedding jobs, and industry experts say the worst is yet to come

Gordon said part of the solution to the multiple challenges facing Wyoming coal is to delay the decommissioning of coal-fired power plants while advancing carbon capture utilization and storage (CCUS) technologies to extend the life of the U.S. coal-fired power fleet.

“This delegation is part of our strategy to use today’s technology, such as carbon capture, utilization and storage to keep coal burning, reduce CO2 emissions and keep jobs here in Wyoming,” Gordon said.

Key study under scrutiny

Much of Gordon’s case for CCUS technologies is outlined in a new study that gives a glowing analysis of cost savings, jobs and state revenue if the technology is applied to Wyoming coal-fired power plants. In 2019, he asked the DOE to initiate the Wyoming Carbon Capture, Utilization, and Storage Study. It was made public earlier this week. 

The study examines “the potential opportunities for retrofitting existing power plants, the economic impact, and carbon dioxide (CO2) emissions reductions for the State of Wyoming compared to an alternative case in the most recent PacifiCorp 2019 integrated resource plan (IRP),” according to its executive summary.

The study claims that, compared to PacifiCorp’s plan for the state’s power plants, adoption of CCUS would: 

  • Reduce CO2 emissions by 37%. 
  • Cost $24 less per ton of avoided CO2 emissions. 
  • Save ratepayers approximately 10% per month.
  • Quintuple the employment benefits for Wyoming.
  • Produce more local and state revenue from property, sales, severance, and other associated coal taxes as well as federal royalty payments.

Randall Luthi, chief energy advisor to Gordon, told WyoFile that DOE funded the study, set the scope of the study and chose the vendor: Leonardo Technologies, Inc., of Ohio.

Founded in 2006 by a legislative statute, the University of Wyoming School of Energy Resources is hoping to create alternative uses for coal and bring down the cost of carbon capture, utilization and storage through its research efforts. Photo by Frank Ooms, UW School of Energy Resources.

[DOE] asked if certain Wyoming entities, such as UW and EORI [Enhanced Oil Recovery Institute] would participate knowing that they would have significant Wyoming centric data at their fingertips,” Luthi told WyoFile via email. “We encouraged their participation.”

The study lists the University of Wyoming School of Energy Resources, UW’s Enhanced Oil Recovery Institute and UW’s Center for Economic Geology Research as contributors. 

The study’s comparisons refer to PacifiCorp’s 2019 Integrated Resource Plan (IRP), the most recent in a rolling cost-benefit analysis of how to best meet its obligations to provide reliable, lowest-cost electricity as a monopoly and regulated utility. PacifiCorp provides electricity to customers in six western states and operates as Rocky Mountain Power in Wyoming. It is the state’s largest utility.

PacifiCorp’s IRP drew the ire of Wyoming lawmakers by proposing to retire several coal-fired power units in Wyoming ahead of schedule while investing some $4 billion in new wind energy, transmission and battery storage projects in the state. Its analysis claimed that a shift from coal to renewable energy across its six-state operating region could save up to $599 million. 

The state responded by passing a law, Senate File 159 “New Opportunities for Wyoming Coal Fired Generation,” requiring public utilities that want to retire a coal unit in Wyoming to first make a good-faith effort to sell it to a third-party buyer. Under pressure from the Wyoming Legislature, and at the direction of the governor’s office, the Wyoming Public Service Commission made the unusual move to launch an investigation to test PacifiCorp’s claims in its IRP. The governor’s office provided funding for the investigation.

The Wyoming PSC is expected to unveil its own findings Tuesday. 

Utility rebuttal

Hours after Gordon’s press conference, PacifiCorp issued its own analysis of the DOE’s study.

“In an initial review, the report appears to have some significant limitations, many of which are simply wrong,” PacifiCorp spokesman Spencer Hall wrote in an email. “PacifiCorp continues to examine the study’s assumptions and calculations to properly evaluate its conclusions, but the list of items missed by the study’s analysis is very long.”

PacifiCorp alleges the DOE study does not effectively consider a utility’s cost for income taxes, tax credits, property taxes or net power costs. It doesn’t adequately factor fuel costs, savings from market sales or system costs, according to the utility. Nor does it consider a market price for oil below $60 per barrel, environmental compliance costs, or lower demand for coal-fired power due to lower cost renewable power sources coming online, Hall said.

PacifiCorp generates 10,894 megawatts of electricity and serves 1.8 million customers across six western states, including Wyoming where both coal-fired and wind generation make up 33 percent of its total generation capacity. (PacifiCorp)

We continue to monitor and evaluate carbon capture technologies for possible implementation at coal-fired plants,” Hall added. “Given the current high capital costs of implementing carbon capture on coal-fired generation, as well as other barriers, carbon capture has not been considered a viable option to date, which is why it has only been installed at a single facility nationwide.”

That coal-fired carbon capture utilization project, Petra Nova in Texas, was mothballed earlier this year after failing to meet objectives and due to further struggles with the depressed price of oil this spring.

When asked why the DOE study varies so differently from actual case scenarios such as Petra Nova, University of Wyoming School of Energy Resources Executive Director Holly Krutka said deployment of CCUS on coal-fired power plants in Wyoming will benefit from lessons learned at Petra Nova and other past failures.

“Petra Nova was a first-of-its-kind project. This is not first-of-its-kind,” Krutka said. “The company that delivered the technology being used at Petra Nova — Mitsubishi Heavy Industries — has already indicated that the capital costs alone could be decreased by 20% in the next plant, and subsequent plants will get cheaper by this learning-by-doing.”

However, the DOE study did not “fully encompass” all unknown costs, Krutka added. She suggested that CCUS might perform better economically in Wyoming due to more favorable conditions for injecting CO2 into Wyoming oilfields, offsetting the cost of implementing the technology.

“In Wyoming, we looked at both multiple oilfields but also [carbon capture storage],” she said. Another difference is the availability of a new federal tax incentive for CO2 storage; the 45Q tax credit, which allows for a $35-per-metric-ton tax credit for CO2 captured and sequestered via enhanced oil recovery.

One of the biggest deficiencies in the DOE study, according analysts, is an assumption that Wyoming coal-fired power plants retrofitted with CCUS technology would operate at an 85% capacity or higher — a capacity unheard of for any commercial scale CCUS attempt.

“The notion of adding CCUS to a coal plant that’s already uneconomic, it’s just not a viable solution. Even if it were to work, it’s not competitive,” Energy and Policy Institute research and communications manager Joe Smyth said. 

Others also question the timing of the DOE study — released just days ahead of the Wyoming Public Service Commission’s findings and potential action related to its investigation of the PacifiCorp IRP.

The timing appears to be intentional, said Bob LeResche, board member of the Wyoming landowner advocacy group Powder River Basin Resource Council and a former energy executive.

“And it strikes me that the way they represent the results of the study are contrary to the empirical evidence the world has seen for the past 15 years,” LeResche said. “My big disappointment is that the governor has taken sides in this, and it’s not the ratepayers’ side, and it’s not the citizens’ side.”

Lobbying incognito

Another key component to Gordon’s plan to delay the closure of aging coal-fired power plants is the renewal of a contract with the Energy Policy Network — a lobbying organization that, in the past, has been funded in part by companies that mine coal in Wyoming, as well as Wyoming taxpayer dollars from the state and Campbell County.

The renewed two-year contract is worth $500,000. It will be paid from a $1 million account the Wyoming Legislature appropriated for the governor to use toward marketing Wyoming coal.

Support independent reporting with a tax-deductible donation today.

“Most Wyoming coal is not used in Wyoming. It is used elsewhere in the United States,” Gordon said, adding that Wyoming coal is preferable for its lower sulfur dioxide emissions, as well as its potential for carbon capture technologies. “We face the challenge that many other states’ public service commissions unfortunately don’t see it that way.”

Gordon said that if the Energy Policy Network can delay the closure of a power plant that burns Wyoming coal — even for just a year — that’s one more year of coal mining jobs and revenue to the state.

State officials have come under fire from watchdog groups for employing Energy Policy Network in the past, with accusations that the organization sets up front groups in individual states allegedly misrepresenting itself as a local ratepayer interest group

Jason Begger, deputy director of the Wyoming Energy Authority, responded to a reporter’s question Thursday morning about whether Energy Policy Network will clearly represent itself in other states as acting on behalf of Wyoming interests.

The state has never hidden its relationship with Energy Policy Network while speaking in public inside Wyoming, Beggar said. However, Energy Policy Network is not obligated to disclose its donors or otherwise make clear that it is lobbying on behalf of Wyoming coal interests while working in other states, he added.

“I think the press conference today just goes to show that, hey, you know this is what we’re doing and no embarrassment about it,” Begger said.

Dustin Bleizeffer

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 22 years as a statewide reporter and editor primarily...

Join the Conversation

9 Comments

Your email address will not be published. Required fields are marked *

  1. The titan of capitalism, Warren Buffett, is finally finishing off the Wyoming Coal industry by playing the long game with Capital, while the Wyoming legislation, both Federal and State, kept betting tax money against him.

    Warren bought up all the coal plants and the distribution systems using Rocky Mountain Power and Pacific Corp, while simultaneously setting up stalking horse LLCs to build wind projects across Wyoming and the West. He also sold this plan to Wyoming customers through his 20 year Blue Sky initiative.

    Wyoming’s Legislature and the Federal delegation decided to double down against Warren. not by breaking him up or calling him out, but by funding pipe dream projects using tax payer cash; thereby throwing good money after bad.

    Warren is laughing all the way to the bank while Wyoming goes in the tank. Capitalism killed Wyoming’s coal and the Legislature is too much of socialist organization to prevent that from happening or change the situation. Wyoming should stop wasting tax dollars, but also be aware of the true predators in our midst, unchecked capitalism.

  2. Sadly, there is a diminishing market for Wyoming coal, and it disappoints me that we have seen this trend for years! I continue to be frustrated with how we continue to use tax dollars to pay lobbyist to “sell” Wyoming coal or threaten to engage in lawsuits with other states not taking our coal. In such a time of budget shortfalls I just want to see more, if any, forward thinking from our leadership and elected officials in Wyoming. Again, the cost to keep coal alive is allowing other initiatives and opportunities to perish.

  3. We want to help bring back America’s coal industry and these coal communities.
    America has to be Energy Wise. We have many more Btu’s in the ground and available through coal than we have in natural gas.
    Americas coal needs to be used to produce America’s 24/7/365 reliable electricity. With Carbon Capture Utilization https://youtu.be/RQRQ7S92_lo cal can be combusted and put into the atmosphere less CO2 than a natural gas fired power plant.
    Americas natural gas needs to be used to heat buildings and by industry to produce and process all those things we consume daily.
    Americas oil needs to be used for transportation and by those industries that require oil in their produced products.
    Americas renewable energy (solar and wind) need to have it’s own grid network and be used to supply electricity for our growing EV network. When the sun goes down and the wind stops blowing and the batteries run out of juice, it’s time to park for the day. No harm done.
    America can be Energy Independent and Energy Wise.

  4. Set aside for a moment the fact that the laws of thermodynamics and physical chemistry can only be bent a little and not broken.

    Would some politician or industry spokesperson give an honest straight answer on the cost of producing electricity from a standard coal fired powerplant , compared to the total net cost of producing electricity from a captured carbon coal fired plant — allowing for the cost of the capture process then deducting the return on any additional carbon byproduct marketed ?

    Or put another way , will carbon captured coal fired power ever be commercially viable without a huge increase in the rates paid by the electric consumer ?

    I await an answer. My own assessment is it’s a financial deceit without applying magic or accounting tricks.

    1. Hi Cody
      Yes. The Sidel Carbon Capture Utilization System is affordable. It starts out in agriculture doing Direct Air Capture. Then the juice from the grown vegetable becomes part of our Sobent which will absorb over 90% of the CO2 out of the combusted coal exhaust, turning this CO2 into good paying full time jobs and money. Our CCU System requires no steam from the power plant allowing the power plant to use that produced steam to make saleable electricity. We consume a <1% of the power plants produced electricity, and because of the chemical reaction and the products produced from the CO2, no pipelines are required. No monitoring to ensure that the CO2 will ever leak out of the ground.

    2. … and I forgot to mention factoring in the semi-hidden costs of the $ 35/ton recovered CO2 tax incentive , which is a robbing Peter to pay Paul analogue. I do not believe Americans at large and Wyomingites in particular know the extent to which the hydrocarbon industry is heavily subsidized and incentivized , thus further burying the true cost of carbon based energy. Paying a lobbying firm $ 250,000 per year is onerous and odorous. Mineral and Energy lobbyists are by and large the bane of Wyoming.

      Again , Wyoming should have gone all in on alternative energy a couple decades ago, on a totally parallel track to supplicating the whims of the global Hydrocarbon Hegemony. There was and remains plenty of room for energy diversification around here . It’s not a zero sum game. The combo of using fossil thinking to keep fossil fuels on life support is lamentable. Now Wyoming is at the back of the pack .

  5. Great story Dustin, thanks. Rob Godby’s comments that were reported in the WTE were the most direct and cogent critique. He said the report is “irrelevant” because it assumes a set of facts that are unlikely to exist. Page 2 of the report shows the fatal, and fantasy like, assumptions that CCUS will be built out on all 9 plants and operational by 2026. That is “tomorrow” in the world of constructing large industrial projects with costly and uncertain technology. And who will pay for the CCUS projects is not even discussed in detail, just hinted at that someone is going to have to bear the costs that are in addition to the Federal credits. Also not discussed is that the Dave Johnson Plant is not being retired “early” it will at the end of its economically depreciated life. The report says the plants will be run for 30 more years with the carbon technology strapped on. What engineering/manufacturing company is going to guarantee that its new capture plant will operate at 85% capacity attached to power plant at the end of its useful life? Fascinating that Gordon continues to pin his reputation on such shoddy reports.

  6. This is the most honest and credible account of the truth about Wyoming’s current staus and unsuccessful, meager and expensive attempts to diversify. I’ve been involved (early 80’s) in the coal industry lobby as Community/Governmental Affairs for, at the time, AMAX Coal. Legislators today act surprised that citizens should be so wounded to lose essential programs like early childhood developmental intervention for preschoolers with disabilities and delays. Why don’t you tell US how to pay for these p! They act like they just didn’t see it coming…Re-election mentality… kick the can down the road…or as a friend said…”I got mine…how’s yours coming along…”