With the 2015 legislative session underway in Cheyenne, Wyoming citizens are hearing a lot of concern about the falling prices of energy commodities and how our state government will have less revenue this year and in years to come. We should be concerned. Our state’s economy is entirely too dependent on taxing the extraction of mineral resources. Our ability to fund community services, education, and other needs hinges on the price of coal, natural gas, uranium and oil.

Eagle Butte coal mine, north of Gillette. (courtesy of Shannon Anderson, Powder River Basin Resource Council - click to enlarge)
Alpha Natural Resources’ Eagle Butte coal mine is located a few miles north of Gillette. (photo courtesy of Shannon Anderson, Powder River Basin Resource Council)
Alpha Natural Resources’ Eagle Butte coal mine is located a few miles north of Gillette. (photo courtesy of Shannon Anderson, Powder River Basin Resource Council)

But instead of prioritizing economic diversification and devising ways to grow out of the boom and bust cycle, our state leaders are doubling down on minerals. Gov. Matt Mead boasts of his “bulldogged” determination to promote coal. Legislators hope by fighting federal regulations and pumping money into tax breaks and subsidies to energy companies that we can somehow do something the market can’t do: create a viable future for these minerals and the huge corporations that produce them.

This narrow thinking has put some foolhardy ideas in the spotlight at this year’s legislative session.

First among these fool’s errands is the idea that we should authorize the Wyoming Infrastructure Authority to use its multi-billion dollar bonding allowance for entirely out of state projects (in Washington for example). Doing this might help get a coal export facility off of the ground they figure. The coal industry is in trouble domestically because of pesky realities like climate change and the falling cost of renewable energy, but our “leaders” think if we help the companies send our coal to Asia — whether the market wants it or not — they’ll be able to keep stripping it out of the ground and pumping Federal dollars into our state.

What our leaders don’t seem to realize — or perhaps don’t want to acknowledge — is that financing is the least of the worries of these proposed coal ports. Billions of dollars of private equity capital are eager to invest in viable ports that make market sense and are welcomed by their communities. But the reality is that today’s markets might not support ports and that community opposition, including significant opposition from some Northwest tribes, has been stopping one proposal after another. The governors of Washington and Oregon have publicly opposed coal port projects in their states, following the quaint custom of putting their citizens’ wishes above corporate desires. Yet our legislators puff out their chests and presume to change reality by offering our credit.

Black Thunder coal mine, in the southern Powder River Basin. (courtesy of Shannon Anderson, Powder River Basin Resource Council - click to enlarge)
Arch Coal’s flagship mine is Black Thunder, in the southern Powder River Basin. According to its Q3 investor report, Arch’s PRB operations realized a profit of 20 cents per ton during the first nine months of 2014, compared to 52 cents per ton for the same period in 2013. (photo courtesy of Shannon Anderson, Powder River Basin Resource Council)
Arch Coal’s flagship mine is Black Thunder, in the southern Powder River Basin. According to its Q3 investor report, Arch’s PRB operations realized a profit of 20 cents per ton during the first nine months of 2014, compared to 52 cents per ton for the same period in 2013. (photo courtesy of Shannon Anderson, Powder River Basin Resource Council)

As opposed to thinking about a “Plan B” to meet revenue needs in a future with reduced coal mining, our state leaders are opting to force themselves into states that aren’t so happy with our meddling in their affairs. We’re about as welcome in Oregon as the EPA is in Campbell County, but that fact somehow escapes the legislature.

Another scheme that should go back to the bottom of the idea pile is a proposal to spend up to $50 million providing mineral feedstock to a natural gas to liquids plant. If you haven’t heard of natural gas to liquids plants don’t worry, you are not alone. There is not a single one of these white elephants operating in the U.S. With facility price tags in the multi-billion dollars range, the Energy Information Administration’s 2014 Annual Energy Outlook did not foresee any large-scale natural gas to liquids facilities in the U.S. through at least 2040. And that was before oil prices fell more than 50 percent and it became even more obvious that these facilities will be uneconomic into the very long-term. Yet somehow our legislators believe that by inserting our state — and our state checkbook — into the market we’ll be able to crush local opposition and change market reality. Shouldn’t we just let the market be?

Maybe if we hold our breath, stomp our feet, and shovel subsidies with a dragline from our dwindling treasury into dying corporations and has-been and never-was technologies we can change the realities of economies beyond our borders. You think? Our “conservative” legislators seem determined to find out.

Instead, maybe they should consider another way to create a really viable future for Wyoming citizens. Maybe someone should realize that Wyoming is doomed to become the state of gun grips and buggy whips in the rapidly evolving world that is leaving us behind. And perhaps — just maybe — we should start investing for the future by diversifying our economy, better supporting the sustainable economies of our state like tourism and agriculture, and doing what we can to get our state out of the grips of a boom and bust economic cycle too beholden to minerals.

— Columns are the signed perspective of the author, and do not necessarily reflect the views of WyoFile’s staff, board of directors or its supporters. WyoFile welcomes guest columns and op-ed pieces from all points of view. If you’d like to write a guest column for WyoFile, please contact WyoFile editor-in-chief Dustin Bleizeffer at dustin@wyofile.com.

Bob LeResche ran Alaska’s oil and gas leasing program as commissioner of natural resources for that state. He was executive director of the Alaska Energy Authority, an investment banker and CEO, and...

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  1. The coal industry as a whole is shrinking, but here in Wyoming it is still strong, because ours burns cleaner then any other in the world. The number of tons shipped is up this year from last, even with all the shipping problems, check out the Casper Star story on the issue.

    I think we should just set up road blocks and stop allowing any truck with Washington or Oregon plates to drive on our roads. You stop our trains, fine, we stop your trucks.

    Yeah I know it would be highly illegal, but its wrong (if not illegal) that they can shut down us selling a great product at a lot of profit, just because they don’t like that particular product (It would also be a lot of fun to watch!).

    I do agree that the cronyism stinks in this state and Matt Mead is cronyist #1 (with Phil Nicholas of Laramie at #2). I would point out though that Wyofile and most news organizations are only against subsidies when Republicans are in charge of handing them out, else they would be going after the cronyist #0 Barack Obama.

    Casey Craig

  2. This whole idea of using taxpayer dollars to try to keep coal mines operating sounds so much like the Two Elks Power Plant project. I would advise all the state legislators to review the history behind this (hopefully) defunct project and think about how the state was hoodwinked in that fiasco and not be a party to another one. The world is changing its stance on fossil fuels and it should behoove our legislators to be forward looking and not waste taxpayer dollars on a “bridge to nowhere”.

    Jim Phillips

  3. storage for wind and solar power is coming soon, many are working on it; check Nevada and Washington..

    Edna Elze

  4. LeResche hits all the nails squarely on the head with his hammer. The question becomes, ” How do we get Bulldog Mead and the 90 members of the Legislature to read this ? ”

    I will offer a path to diversity for consideration. Wyoming’s wind is far too fickle in most places to be a reliable source of steady electricity for immediate consumption, because it’s either blowing 60 mph or not at all. So the logical thing would be am infrastructure for storing windpower to release-on-demand. The means to that end may be to use the wind to drive Electrolysis on an industrial scale. Use the fierce gusts of Wyoming wind to break down water into hydrogen and oxygen. Use a little more of that electrical surge to condense, pump, and store that hydrogen in phase with the occurrence and strength of the wind. The oxygen would be released or used somewhere else.

    The plan is to develop the infrastructure to tank and distribute hydrogen for use in Fuel Cells to make steady electricity. Fuel cells are a 150-year old technology awaiting its widespread use and long deserved fame. The smart part is developing the infrastructure to bottle ( tank) that hydrogen and distribute it. Think LP Gas or your neighborhood propane dealer. The hydrogen power cells already exist , scaled for use in a single home, an apartment complex or neighborhood , or any size commercial emplacement. The resultant electricity can charge up the family electric car, run the house, and provide surplus power to anyone nearby. Or you just sell the tanks of hydrogen to Mr. and Mrs. Consumer and take back the empties for refill / resale in the closed loop. Toyota just announced its first retail hydrogen fuel cell automobile, the Mirai. It’s a fine vehicle, but you need a venue to refill the H2 tank. California is going down that road, and possibly Tesla Motors with their innovative electric cars as well ( there’s a Tesla chargng station in Lusk , Wyoming, of all places… )

    Wyoming could be the first state in the nation to go full-blown Hydrogen Power for homes, automobiles and trucks, and business. Hint, hint, UW energy labs. Oh by the way …the tech is already there to convert natural gas to hydrogen , using ” reformers”. Seems we have a lot of natural gas we can’t get a good price for, or just flare away ( bad ! ) , so an alternative is to downconvert the overabundance of methane to hydrogen and go that route . Too bad it leaves behind some carbon to deal with , but much less so than all the other hydrocarbon processes in play. It’s the way most commercial hydrogen is produced anyway.

    Quit kicking that near dead black greasy horse. with your steel-toed cowboy boots. Go Hydrogen, Wyoming. Use the wind to get there from here. Get out ahead of every other state, including California. Jobs and investment opportunities await. Win-win. Forget coal. Don’t look back.

    Dewey Vanderhoff

  5. Kudos on an excellent analysis of what is really needed here in our beloved state of Wyoming! The time has truly come for us to use our constant source of wind and solar to our advantage…which would also keep our air and water cleaner, enabling us to breathe and hydrate with confidence! Times change and we have to change with them!

    Katherine Schock

  6. Yes, absolutely. And for God’s sake, put some of this damnable wind to some use and economic gain. Why not use our credit to finance the transmission capacity that is always sited as the excuse for why we can’t develop more wind energy? Wind and solar could be put to use by these power companies who are so committed to coal as the only possible way to produce electricity. If our energy infrastructure were more adaptable and dispersed to include all of our energy resources we could move forward instead of clinging so hard to our beloved ‘booms and busts’. Wind and solar are downplayed because they are not reliable 24 hours a day. Gas, oil, and coal suffer from the same problem only at longer intervals. We need to plan for both types of interruptions and keep our revenue streams and energy production on steadier ground.

    Linda Anderson