Every time I think Wyoming can’t deceive itself further, contorting all reason to justify keeping the ventilator running on its dying coal industry, politicians prove me wrong.
It’s time for Gov. Mark Gordon and state lawmakers to face reality and let nature — in this case the natural laws of free-market economics — take its course. They have no business tethering the fate of Wyoming taxpayers, ratepayers and the state’s largest utility to that of the dearly beloved but clearly doomed King Coal.
PacifiCorp plans to retire several of its aging coal-fired power plants ahead of schedule and invest about $4 billion in new wind energy, transmission and battery storage projects in Wyoming. The company estimates the switch could save up to $599 million across its six-state operating region.
Utilities throughout the country have made the same decision to switch from coal to much cheaper natural gas and renewable energy.
Gordon asked the U.S. Department of Energy to study the potential environmental and economic impacts of retrofitting Wyoming’s coal-fired power plants to use carbon capture utilization and storage.
The study, which immediately drew criticism from PacifiCorp and environmental groups, concludes CCUS would significantly reduce CO2 emissions, decrease ratepayers’ bills, save jobs and provide more tax revenue for state and local governments.
Sounds great, doesn’t it? But DOE’s report would have more credibility if its findings didn’t fly in the face of what happened at Petra Nova in Texas, the nation’s only commercially operational CCUS project before it was mothballed earlier this year.
The $1 billion project near Houston didn’t perform as advertised and failed to meet its lofty environmental and economic goals. The unit captured less than half of carbon dioxide emissions in the slipstream it was processing during the first quarter of 2020, not the consistent 90% figure claimed by owner NRG Energy.
The project likely could not have survived its three years in operation without a $190 million investment from DOE and $250 million in loans from a Japanese bank.
“Proponents of these projects are selling an unproven dream that in all likelihood will become a nightmare for unsuspecting investors,” states an Institute for Energy Economics and Financial Analysis report on Petra Nova.
Meanwhile, PacifiCorp’s analysis of the DOE’s report said it comes up short in many critical areas. It does not consider a utility’s costs for income taxes, tax credits, property taxes or net power costs, a company spokesperson told WyoFile. The utility added that the study doesn’t adequately factor in fuel and system costs.
In other words, it was that standard-fare output of a Trump-administration agency: an alternative facts bit of propaganda that relies more on politics than science.
The carbon captured from coal-power production can be piped in to enhance oil recovery projects or sequestered underground. What scuttled Petra Nova was the oil market crash this year, with prices falling below $45 per barrel. The DOE study for Wyoming, PacifiCorp noted, does not even consider a market price for oil below $60 per barrel.
Lux Research, a market research firm, analyzed the Petra Nova project and determined it won’t be economical again until oil prices reach $70 per barrel.
The questionable DOE report is one of several coal-boosting initiatives Gordon announced. All are tied to President Trump’s unfulfilled promise to save the coal industry, and all will likely collapse if a new administration takes over.
The EPA is rolling back an Obama-era rule that limited the volume of toxins coal plants can dump into waterways. The agency is doing it to save money for coal-plant operators — an estimated $140 million annually, including about $8 million in Wyoming.
It’s an unconscionable decision that the EPA and Gordon are touting. “This disastrous rule will allow coal power plants to continue dumping toxic wastewater — filled with dangerous pollutants like lead, mercury and arsenic — into the same waterways that our families drink and play in,” the League of Conservation Voters said in a statement.
Despite Petra Nova’s costly failure, Wyoming is plunging ahead on a public-private plan to demonstrate geologic sequestration of coal-derived carbon dioxide near Basin Electric’s Dry Fork Station, the newest coal-fired power plant in the nation.
The most audacious part of Wyoming’s pro-coal power play is small potatoes financially, but still should provoke taxpayers’ outrage. The Wyoming Legislature granted Gordon’s request for a $1 million fund to market coal, and he’s spent half of it renewing a two-year contract with the Energy Policy Network.
EPN will lobby other states to delay plant closures and keep using Wyoming coal even though it’s proven to not be cost-effective. Wyoming might as well have taken that $500,000 and tossed it into a 60-mph gust of wind.
It’s par for the course in a state whose lawmakers passed a bill requiring public utilities seeking to retire a coal unit to first make a “good faith effort” to sell it to a third-party buyer. Who is going to buy a plant whose owner has determined it’s not economical to run on coal?
The measure’s supporters are so anxious to prop up the coal industry, they ignore the fact that the law violates the universal rule that fiscal conservatives constantly preach: let the free market prevail.
Wyoming’s 267 million tons of coal production in 2019 was its lowest volume since 1975, according to the Energy Information Administration. This year the COVID-19 pandemic has led to even steeper declines in coal mining as several companies temporarily halted operations, furloughed workers or scaled back. Many of those mining jobs simply aren’t coming back.
At an April press conference, a frustrated Gordon seemed resigned to the uphill battle facing the coal industry, which has provided tax revenue for state and local governments and schools for the past half-century.
“I don’t think anybody is prepared for the losses we’ve seen periodically over the past several years,” the governor said. “We’ve never indicated that the state is going to bounce back from this with ease.”
But the quixotic quest of Gordon and the Legislature to keep coal mining alive seems to have no end.
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The governor’s office directed the Wyoming Public Service Commission to investigate PacifiCorp’s findings in its exhaustive Integrated Resource Plan that converting coal-fired plants to renewable energy is the best way to provide consumers reliable electricity at the lowest cost. Gordon’s office even paid for the PSC’s investigation.
Though championed by conservative lawmakers, it’s unlikely Wyoming could win any legal challenges to force the state of Washington to build a terminal to export Equality State coal to Asian markets.
Pouring millions of dollars into coal research may eventually produce positive results, but it’s a long-term, shaky gamble at best, and it won’t keep U.S. plants buying Wyoming coal. CCUS technology can’t survive without enormous tax credits and government investments.
It’s past time for state officials to accept that market forces are driving the steep decline of coal production, and focus on helping Wyoming benefit from future wind, solar and battery-storage projects. Last year renewables surpassed coal’s share of U.S. power generation for the first time since the 19th century. And we have plenty of wind and sunshine. Yet our politicians refuse to embrace this growth industry
Renewables likely won’t ever generate the tax revenue coal has provided, but will create good-paying jobs that can help revive communities hit hard by coal’s decline. They will also reduce costs to electricity ratepayers.
Having to jump off coal’s gravy train may not be easy, but it’s a fiscal reality that should finally force legislators to fulfill their promises to diversify the state’s economy. State government is faced with a $1.5 billion biennial deficit, and already the state has announced cuts to programs that help seniors, the mentally ill and disabled and residents who live in poverty.
How can any candidate look voters in the eye — even on Zoom — and say with a straight face that coal is our future?
Duck
You do realize the waterfowl season is coming soon? Safety is in the middle of the pond.
Normally, I wouldn’t have much to say about your articles since they are all one-sided anti Trump messages, all the time. Presenting both sides of a story is not your strong suit. In fact, you would find some way to criticize the President if it was on the history of bubble gum.
But, before I go any further….good job on this article. I get it. Being from the West Virginia coal country. I lived whats about to happen to the Wyoming economy. For 100 years West Virginia legislatures did exactly the same thing that Wyoming is doing, by letting gas and coal rule most outcomes. The economic devastation is permanent for those energy counties. And yes, I lived in Rawlins 12 years and like lots of my friends suffered financial losses from a “bust”. Unless something changes soon, the worst is yet to come for Wyoming.
I am impressed with the responsible responses that readers have provided. It is easy to criticize, but hard to provide a solution based on anything other than an opinion.
In 2015, I started year long research effort about ways to diversify the economy in Wyoming, concentrating on the conservation tourism sector. I do not agree with some of the previous comments that tourism has few merits. Certainly its not a stand-alone answer to the problems, but there are opportunities to make a large contribution towards diversification, especially in the hard hit energy counties. Surely people see that the conservation tourism sector in Colorado, Utah, Idaho and Montana are thriving. Yet, Wyoming, in the geographic centered of those states, does nothing “new” but print brochures and watch visitors speed across I-80 in route to their next adventure.
What I have learned in the last 5 years.
1. The diversification must include tourism in addition to energy and grazing.
2. Generally speaking, the ole guard in Wyoming has no interest in diversifying. They just crave the energy revenues because doing something else requires a change in perspectives, of which they are not capable.
3. Solving the diversity problems also requires people to approach issues with a “neutral” attitude. They must be able to completely set aside biases. However, if you been coal miner or rancher all your life, that is the go to conversation you are most comfortable with. Anything else may be perceived as a threat.
4. There will be no help from the congressional delegation. For example, all 3 recently voted against the renewal of the Land & Water Conservation Fund, which has been a great benefit to Wyoming. I was shocked they actually had enough nerve to cite the Federal Budget as the reason for their “no” votes. Its impossible to calculate the number of high priced non essential budget items they have voted for.
5. Governor Herschler and Dick Cheney were the last politicians with a vision of the future. Yes, that Dick Cheney, Every time you go into a wilderness area in Wyoming, thank the elder Cheney for making that happen. Herschler, on behalf of the State, also enthusiastically support the conservation designations. Wilderness areas are a financial success for many communities in Wyoming. One of the apples from the Cheney tree is not likely to produced any new fruit.
6. Starting with Governor Meade, four times I ask for just 15 minutes, to pass along the results of my research. There was no response from his office. He did create the Outdoor Task Force and that group was so concerned with being politically correct, they failed to offer any specific big picture solutions.
Before Gordon was Governor, I attempted to speak with him about the research findings. I made three attempts to gain access. Please just 15 minutes…nothing, not even a professional rejection. He too has no solution and cannot get past something energy related. I challenge the Governor to have a economic summit without energy or grazing being on the agenda.
7. Once upon a time conservation organizations in Wyoming had influence nearly equal to energy. Those groups are very fractured and no longer speak with one voice. They must regroup and be a unit.
8. The Wyoming Bureau of Land Management is not a friend of diversification. Dissect with neutrality one of their resource management plans and see for yourself.
9. The University of Wyoming, whether you believe it or not, is a energy support university.
10. The democrats miss every opportunity to field statewide candidates that can be competitive outside of Jackson subdivision of California. Democrats can have a place in the state, but they if they identify with the liberal left, they don’t represent the majority of the citizens. I would suggest the development a Wyoming based platform. A good independent can also be successful.
11. Many county and state representatives are not willing to explore new economies. Look no further than the commissioners in Sweetwater ties to energy or Carbon to grazing.
12. The only way out of this debacle is new and different elected officials statewide.
There is no visionary personality like Teddy Roosevelt in Wyoming.
Wyoming’s gift of coal that has been giving for so many years is about to quit giving. It takes a lot of capital and investment to finance any energy project and when the the fuel to generate electricity, coal, is more expensive than say natural gas, or wind or solar coal is going to loose. I don’t see how it is going to be made any cheaper by adding on the extra cost of carbon dioxide sequestration no matter the backflips and contortions the politicians are doing trying to make it so.
I have a feeling – just a feeling, that the governor is much smarter and better informed than the average Wyoming legislator and that his “support” of these far fetched schemes to save coal is his idea to give the legilature just enough rope to hang themselves. The legilature will have had their say and nothing but failure to show for it.
Following technology is not a scam so interesting how one implies that one technology is better than the other when none of you are willing to give the other side time to pursue it!
Wisdom.
Most of us who have worked in Wyoming and the fossil fuel energy industry all of our lives have heard the climate change deniers arguments ad nauseum. Now with the golden goose (coal) laying fewer eggs, Governor Gordon wants to waste taxpayer dollars on questionable science projects trying to save coal. Ironic, considering the Republican party has for years denied the science of climate change. If climate change doesn’t exist, why do we need carbon capture? Let the markets determine winners and losers. (Remember those words from the Obama years?)