Wyoming coal can’t be saved by a marketing scheme

One million dollars is a huge sum of money. But in Wyoming’s desperate scramble to save its coal industry and help communities hurt by lost industry jobs, it amounts to peanuts.

That makes me wonder if it’s even worth spending at all.

I’m not the only one who doubts if a proposed state coal marketing program makes sense. When the Joint Minerals Interim Committee considered a bill proposal at a recent meeting in Casper, a lobbyist and a lawmaker also expressed reservations.

“Right now, we don’t know whether to oppose or support this,” said Shannon Anderson of the Powder River Basin Resource Council. “We don’t know what it does. It’s rather vague; [it] expends funds to who, to what, for what purpose?

“It just seems to create a fund that may not end up doing anything at all,” she continued. “We’ve seen efforts like this before … You put in a million dollars and it sits on the shelf.”

I doubt that will be the outcome. When legislators appropriate money for special programs, especially to benefit an industry state government relies on so heavily to provide tax revenue, it gets spent. But as Anderson pointed out, what will it actually buy?

These are extremely tough times for a coal industry that has been in sharp decline for the past decade. Sales to coal-fired power plants have shrunk by nearly half, as the product now accounts for only about 27% of all domestic electrical generation. Experts say coal will continue to be squeezed out of the market by much cheaper natural gas and growing use of renewable resources like wind and solar.

Meanwhile, coal corporations are in disarray. Blackjewel LLC closed the Eagle Butte and Belle Ayr mines in July, throwing 600 employees out of work. Cloud Peak Energy declared bankruptcy, while Peabody Energy and Arch Coal have proposed a merger to cut costs.

Cloud Peak banked on being able to ship coal from the Powder River Basin to Asian markets via Pacific ports in Washington and Oregon. But environmental groups have successfully sued to stall construction of such export terminals. Wyoming has shown support of a developer’s suit against Washington over blocking a proposed terminal. 

The staunchest legislator pushing coal exports is Rep. Chuck Gray (R-Casper), who with great bluster told the committee there is a war on coal that “is a threat to our way of life” and “a systematic assault on Wyoming industry.”

No, there isn’t any war. Instead, as University of Wyoming energy expert Rob Godby detailed, coal is at overcapacity in the Powder River Basin. More mines will close, he said, until there is a return to competitive levels in the market.

That means the state’s cities, towns and counties will continue to struggle with the loss of workers and other major hits to their economy.

The Minerals Committee seemed universally sympathetic to the plight of local governments. Sen. Chris Rothfuss (D-Laramie) ended up supporting the draft bill, which moved forward on a 7-4 vote, but did so with mixed emotions.

Rothfuss said such a plan isn’t necessary because Wyoming has a market access problem that isn’t going to be helped by advertising. What he didn’t say, but I firmly believe, is that the effort to force Washington to approve a coal export terminal will fail in the courts. Federal judges are simply not going to force other states to do an industry’s bidding that is perceived to be an environmental threat to their residents.

Committee co-chairman Mark Greear (R-Worland) said the bill will effectively create a budget footnote. “This is putting $1 million in the governor’s back pocket to deal with emergencies when they crop up. Plain and simple,” he said.

Rep. Bill Henderson (R-Cheyenne), who voted no, said it lacks specificity. If the bill is indeed meant to act as a budget footnote, he added, the Legislature should just create a line item in the budget to give the governor an account for coal emergencies.

And what exactly would such an emergency look like? Giving the governor more money for litigation against northwest states over terminals that aren’t going to be built would equate to throwing money away.

It was suggested that Wyoming could use the new $1 million account to fight the premature retirement of coal-fired power plants. But plant owners have a right to close polluting coal-fired facilities and convert them to cleaner, less expensive natural gas and renewables. Such moves will also save ratepayers hundreds of millions of dollars, which can’t be overlooked.

Other states don’t have to buy Wyoming coal, and they don’t have to allow its coal industry partners to build terminals so it can reap profits at their residents’ expense. The sooner Wyoming realizes that the rest of the world doesn’t owe it anything, the sooner the state will be forced to concentrate on economic diversification away from its overwhelming allegiance to fossil fuels.

As Rothfuss noted, $1 million “will probably buy us two days’ worth” of an overall effort to provide help to Wyoming communities negatively impacted by coal’s decline.

Right now, Anderson said, the bill is “just a coal marketing plan,” and that’s not what Wyoming needs. The rest of the world has known for decades that the state has abundant coal resources. A marketing blitz in Beijing isn’t going to help spread the news to potential buyers.

I am weary of empty exercises like the committee’s two-hour review of the state of Wyoming’s coal industry. Wyoming Mining Association Director Travis Deti admitted that coal is losing its market share, but maintained the industry is far from dead.

“We’ve seen a lot of bad news in the papers that kind of taints some things, but there are some very good opportunities in the basin,” Deti said.  

Greear and Co-chairman Sen. Jim Anderson (R-Casper) sang coal’s praises and assured the public that the so-called war on coal ultimately won’t succeed.

I was hoping someone would throw much-needed cold water on this whitewashing of the industry’s woes. Rothfuss took up the mantle of truth-teller.

He recalled that a decade ago, common belief held that coal’s dominance would never be threatened by other industries.

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“We convinced ourselves of that and we didn’t take any strong policy action,” he said. “We could have done more; we should have done more.”

Now, Rothfuss said, “we’re hearing that everything’s fine. It’s not … We have to take action as a committee.” The problems, he said, “are not going to take care of themselves.

“We send each other emails, we prop each other up, we say great things [about coal]. We’ve been doing that for 10 years,” he said. “We’ve had multiple mine shutdowns and we’re still telling ourselves that everything is OK.”

Wyoming is investing in carbon capture and carbon sequestration, and this research may eventually help sustain the industry, though at a much lower level of production than its peak in 2008.

But Rothfuss’ message was clear: The committee needs to “stop blowing smoke” and be realistic.

He’s right. The Legislature must address how to protect mine workers from losing their benefits and reduce the impact on communities severely affected by mine closures. No million-dollar marketing plan is going to help achieve those goals.

CORRECTION: This column has been updated to note that Wyoming is not suing the state of Washington over its denial of a permit to build a $680 million coal export terminal. The developer is suing and Wyoming is one of six states that filed a friend of the court brief supporting the developer. At this year’s session the Legislature passed a bill facilitating a legislature-led lawsuit against Washington, but it was vetoed by Gov. Mark Gordon. — Ed.