A prolonged downturn in Wyoming’s fossil fuel revenue over the past decade has state Rep. John Bear, R-Gillette, bringing a plan to the table he believes will be a novel approach to bolster the state’s coal industry and give communities more control of their power supply.
Coal production is on pace to record another modern low in Wyoming, at risk of falling below 200 million tons produced for the year for the first since 1992.
Bear wants the state to develop a regulatory framework to allow for the creation of small coal-fired power plants dotting the state to make Wyoming more energy self-sufficient.
He’s particularly interested to see if these facilities could be developed at a lower cost considering that carbon sequestration is much easier to incorporate into newly built power facilities rather than existing plants.
Bear said these coal-fired micro-plants would also need to come with the addition of micro energy grids, only located within Wyoming.
He got the idea from a group of Idaho scientists who presented the concept of running small, unmanned nuclear plants on micro grids, and believes the same concept could be applied to small, coal-fired power plants.
It’s not an entirely novel concept.
Under the first administration of President Donald Trump, the Department of Energy worked to advance research and development on small-scale modular coal-based power plants for the future.
In the early 20th century, there were far more coal plants in the U.S. than today, and they were smaller.
The plants Bear envisions could be as small as less than a quarter the size of an average coal plant, producing as little as 35-50 megawatts of electricity, with its size based on the size of the individual community it would serve.
Micro Grids
Bear said these small plants could take a conventional approach to producing coal, use carbon capture or even produce nuclear energy. It would be up to the consuming communities to decide what they’re willing to pay for their energy versus what emissions controls they’re also willing to pay for.
Their shared commonality would be their attachment to these small, individual micro grids set up throughout the state with the sole focus of serving Wyoming consumers.
Investing in these grids would likely cost well into the billions of dollars to build out, but could aid Wyoming for 100 years or more, a potential selling point for bringing manufacturers to the state, he said.
“It’s going to be well-worth it because we’re going to have good, steady energy, protected from a lot of different things that would impact us,” Bear said.
Any connection to larger, nationalized grids, would be solely for the purpose of exporting Wyoming’s energy at a higher price. Wyoming already exports about 70% of the energy it produces, which Bear said he would like to see continue without raising prices on local consumers.
“That way, these high-cost energy sources that other states might desire won’t affect the rates that people in Wyoming are paying,” Bear said.
Bear said one of the driving inspirations behind the proposal would be for the energy production to be self-contained to Wyoming, which he believes would allow the state to dictate its own regulatory processes for it. This also wouldn’t be reinventing the wheel. Texas and California run their own independent electrical grids.
Energy Autonomy
Bear wants the state to take the lead in creating this new energy source by beating out the federal government in establishing a framework for its production.
It’s his hope this would give Wyoming some autonomy in challenging the federal government’s regulation of energy, which he believes will be the biggest hurdle in achieving his goals.
President Joe Biden’s administration has opposed coal production, passing rules that would end all coal leasing in the Powder River Basin by 2041.
Still, at some point Bear said he would expect the federal government to intervene and a lawsuit to ensue, which he would then see as “a legal opportunity.”
“I’d rather have them suing us than us trying to sue them to maintain our mineral industry,” Bear said.
Bear wants to create a legislative framework on a state level to allow for this kind of activity in Wyoming, but doesn’t have any plans to pursue it in the upcoming legislative session. He first wants to see if his proposal can be marketed and interest generated.
If it can and a framework is established, he believes private investors will be naturally attracted to a low-cost, low-regulation energy opportunity in Wyoming.
“The people who are interested in the technology and the low-cost energy, they can operate a lot faster than the government,” Bear said. “I wouldn’t want the government doing much, we just set up the regulatory framework to allow it.”
If it can, he could also see it being used for small-scale refineries that produce fuel solely for Wyoming consumption.
Is It Feasible?
Holly Krutka, executive director for the University of Wyoming School of Energy Resources, said Bear’s proposal is technically feasible, but the most difficult hurdle will be drawing private investment and making the plants profitable, as it’s unlikely they’ll be as efficient as a normal sized coal-fired plant from the get-go.
She said developing small-scale, demonstration-type facilities is usually the best way to get new projects like this off the ground in the energy industry.
“It takes a couple of these getting built before they can be profitable, but that’s true of basically any energy technology at all,” she said. “Once you build the first of something, of course it’s expensive. But when you build that same thing over and over, the costs come down.”
Krutka said that UW will try and help however it can with the effort, but also questioned how enticing it would be for potential investors given the uncertain regulatory environment.
She mentioned how her school is already studying the concept of small-scale coal fired power plants with reduced carbon emissions, carbon capture and enhanced oil recovery capabilities.
UWl has also been studying using supercritical carbon dioxide generated through the production of coal to turn a turbine to generate power. An attribute like this, Krutka said, helps make a facility “semi-regulation-proof,” due to the fact it would be releasing no emissions.
“It’s really important to support our coal industry to see these types of projects moving forward,” she said.
But she also added that to keep Wyoming’s existing coal mines alive and get coal production back up, regular-sized coal plants will still need to be built, so many of the projects the school is working on would need to be accepted out-of-state to be truly successful.
“So that we can keep selling our energy outside the state, which is where most of it’s used,” she said.
Economic Diversification
Bear said if Wyoming wants to diversify its economy, it will need to get manufacturing organizations to come to the Cowboy State.
President-elect Donald Trump has made returning manufacturing production to America a major priority of his upcoming administration. Bear believes this agenda could make Wyoming a prime target for companies returning to the U.S. that are looking for low-cost energy sources to produce their products, an effort the small coal-fired plants could help with.
But even if enough Wyoming-based coal plants could be set up to power every community, it would be unlikely to make up the revenue losses seen in this industry.
Because of Wyoming’s small population, the state is at a complete disadvantage when it comes to single-handedly altering world market trends.
Bear believes if the Wyoming model proves to be effective and a true source of low-cost energy, it will inspire other states to follow suit and potentially create a revolutionary change within the coal industry.
It may be a long shot, but Bear believes this could be Wyoming’s best bet for driving change in an energy industry that is slowly turning away from coal in preference for lower carbon emission products.
If Wyoming can prove that it works and can attract manufacturing for it, Bear believes competition will naturally develop based on other states picking up the same idea.
He wants Wyoming to specialize in all forms of low-cost energy, but clarified during a Wyoming Business Council webinar last week that he wants Wyoming to focus more on coal than gas moving forward as coal historically has more stable pricing.
“You want to lower the risk, lower the volatility of the cost of goods,” he said.
Bear believes groups like the Wyoming Business Council and Wyoming Business Alliance exist because of regulatory challenges industry might not have faced 100 years ago and hopes they will help research what it will take for his proposal to work in Wyoming.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
