Gov. Mark Gordon acknowledged Tuesday that Wyoming faces a complicated trade-off as the Trump administration moves to expand coal production: increased carbon dioxide emissions and reduced state revenue in exchange for extended power plant lifespans and new international markets.
"There'll be more to CO2 production," Gordon told reporters during a virtual press conference, responding to questions about the environmental impact of federal policies announced Monday to bolster the coal industry.
The governor also conceded budget challenges looming for the 2026 Wyoming legislative session as federal royalty rates on coal drop from 12.5% to 7%, an estimated annual hit to the state budget of $50 million.
“The state has got a number of features of reduced revenues to it that are going to make this a very interesting budget session,” Gordon said.
But the governor emphasized significant opportunities on the horizon, particularly with the potential for exporting Wyoming coal to Asian markets.
During a spring trip to Asia, he said both Japan and Taiwan revealed they have net zero carbon dioxide goals yet recognize coal will supply about 20% of their electricity generation.
"They want to see that come from the United States because, as I mentioned, they don't have a good friend next door," Gordon said, referring to China's proximity to both nations.
Export Opportunity
A recent California Supreme Court decision may open a planned Oakland port for coal exports, which Gordon said would dramatically shorten shipping routes compared to current Gulf of Mexico routes.
"Working with Utah, Montana and Wyoming, we're very anxious to be able to see how we can get that coal out there to our neighbors on the Pacific Rim," he said.
Monday's federal announcements include 13.1 million acres of federal land opened for coal leasing in North Dakota, Montana, Utah and Wyoming, including the West Antelope Mine.
Gordon joined Interior Secretary Doug Burgum, EPA Administrator Lee Zeldin, and Under Secretary of Energy Preston Griffin III for Monday's policy launch in Washington.
The policies include $600 million in funding: $350 million for coal plant recommissioning and retrofitting, $175 million for rural capacity projects, $50 million for wastewater management systems, and $25 million for dual-firing retrofits allowing plants to switch between coal and natural gas.
"Instead of coasting to closure, we're going to now coast to energy security," Gordon said.
AI Demand
Gordon said artificial intelligence's voracious appetite for electricity could position Wyoming as both a major power producer and consumer, with data centers likely to locate in higher altitude, drier climates because they're easier to cool.
"Wyoming has the potential to be able to be not only a producer, but be able to also consume much of the electricity we generate within the state," he said. "So we won't be tied to, let's say, what Oregon or California or Washington want us to do."
However, Gordon cautioned against overestimating AI's impact.
"The question I think that a lot of utilities are looking at is, are we going to over-promise on AI?" he said.
Tech And Land
Gordon pointed to Wyoming-developed technologies as pathways to managing increased emissions, including a Kawasaki Heavy Industries carbon capture project now being deployed commercially in Japan and membrane technology piloted in Gillette that uses less water.
"Being able to move them forward in a reasonable and thoughtful way will continue to put Wyoming and the United States at the forefront of this technology,” he said.
The governor also emphasized land management's role in carbon sequestration, pushing back against critics he said don't understand the issue.
"It's important that we have healthy forests, that it's important that we have healthy rangelands and that our soil, which is a very large component of our carbon sink and very productive, that those things are things that we manage," Gordon said. "I think this gives us one way to be able to talk about what we can do to make not only our lives better, but our children's lives better."
Gordon said the reduced royalty rates align with Wyoming's earlier decision to lower coal severance taxes to match oil and gas rates, citing the economic principle that lower costs can spur higher production volumes, potentially stabilizing overall revenue.
"One of the things that people should take in mind is that old Laffer curve, a little bit less cost, a little bit more production," he said, referring to the concept in economics that illustrates the relationship between tax rates and tax revenue.
It suggests an optimal tax rate can maximize revenue.
“We should see relatively stable revenues, royalties coming to the state,” Gordon said.
David Madison can be reached at david@cowboystatedaily.com.
