Wyoming legislators and Gov. Mark Gordon's staff talked up Wyoming fossil fuel exports Monday, detailing the pursuit of new Asian markets and a funding boost to promote Wyoming's interests.
During an Interim Joint Appropriations Committee meeting, lawmakers questioned Gordon's team about strategies to ship Wyoming coal and natural gas to buyers in Taiwan and Japan, with some attention focused on developments with the Oakland Bulk and Oversized Terminal in California.
Sen. Mike Gierau, D-Jackson, prompted discussion about the state's coal litigation funding mechanisms and export opportunities — which are commonly plagued by legal battles.
"There's actually two different litigation funds," Randall Luthi, Gordon’s policy advisor, explained federal funds are available when legal challenges arise. "We have the opportunity to participate in a case. They estimate the cost, and we have used that extensively particularly during the Biden administration.”
“Now in addition, the Legislature passed what we call the coal litigation fund, which was specifically designed to make sure that coal had the ability to access,” he added. "That fund has been used as well.”
An example cited put the price tag at $800,000 for one outside attorney to represent Wyoming in one case.
Gordon’s chief of staff, Drew Perkins, told the Cowboy State Daily the governor’s proposed budget asks for $1 million to add to a $3.3 million fund provided to Wyoming through the Federal Natural Resources Policy Account.
“It’s general fund to be used to help Wyoming in any complaint or any kind of action by the federal government or by others trying to force the federal government to do certain things that would be either helpful or adverse to Wyoming,” explained Perkins. “So it could be anything. It's not just coal litigation.”
“It could be endangered species. It could be wildlife corridors. It could be coal leasing. It could be water rights. It could be anything that has to do with natural resources that's affected by federal policy,” added Perkins.
Asian Demand?
During Monday’s hearing, Gierau got into the details about what’s driving demand for Wyoming coal and gas. “These discussions that are going on in the Pacific Rim in general, Japan, Taiwan, through the trade office, that there's a desire for Wyoming coal specifically, which could be shipped out of the Port of Oakland, possibly,” said Gierau, summarizing where things stand.
Luthi responded, noting, “We are meeting with the Oakland operators on a monthly basis as we talk about how to get coal to Oakland, and how much Wyoming coal and Utah coal. We're starting to already have those conversations."
“So the coal port items have actually come around kind of full circle on a couple things,” added Perkins. “And so Gov. Gordon and Gov. Cox (Utah) in particular have had some initial conversations now with Montana as well, with some of (Montana) Gov. Gianforte's staff at least, talking about going back and trying to re-energize that.”
“So once again, there's interest now between Wyoming and Utah and some potentially in Montana of trying to open up those avenues again to try and find a way to ship coal off the West Coast," continued Perkins, referring to trips in 2025 to Japan and Taiwan by representatives from the governor’s office and the University of Wyoming.
“There's still interest in being able to burn Wyoming coal. They're probably looking for at least 20 million tons of coal to burn in Taiwan a year,” said Perkins, who also touted opportunities to export liquified natural gas to Asia for electricity generation.
UW’s Part
Helping expand and preserve demand for Wyoming coal and gas is the University of Wyoming, said Perkins.
“The university now is leading the nation. Research that's happening at the University of Wyoming, it's not happening anywhere else in the world right now, on some of these things that will help prolong and expand the ability to use fossil fuels well into the future,” he told the committee.
Rep. Jeremy Haroldson, R-Wheatland, raised points about maintaining balanced energy portfolios as Wyoming pursues new markets.
"So one of the things that I am concerned about is we look at an energy portfolio. Anytime you lean one way or the other, we lose diversification,” said Haroldson. “Diversification is how we keep low-cost energy in our markets.”
Haroldson went on to note, “As we see a huge build-out leaning more towards gas structuring, obviously we will see an increase in gas prices. Now that's great for the state of Wyoming, not as great for ratepayers.”
OBOT Update
While Wyoming positions itself to capitalize on West Coast export opportunities like the Oakland Bulk and Oversized Terminal, the project plods ahead.
The 10-year drag of legal delays appears lifted, Phil Tagami told Cowboy State Daily.
"We're getting much more cooperation from the city," said Tagami, the Oakland terminal developer. "We're just working. We're just doing what's required, and it's all moving forward."
OBOT opponents point to a lengthy list of required permits and the escalating cost of port construction and creating a rail link.
Ted Franklin, an Oakland-based attorney who has tracked the project's decade-long journey, told Cowboy State Daily, "I think it was enumerated that there were over 70 permits yet to be obtained.”
The export terminal's path forward is also clouded by separate litigation involving Insight Terminal Solutions, a Kentucky-based coal company that holds a sublease for the facility.
On Nov. 21, U.S. District Judge Benjamin Beaton vacated a bankruptcy court judgment against the city of Oakland that had initially awarded potential damages ranging from $230 million to $675 million.
The order found that the bankruptcy judge had overstepped her authority by issuing a final judgment.
"The Bankruptcy Court's judgment was partial and interlocutory — not final — insofar as it addressed only liability and not damages," Judge Beaton wrote in his order vacating the lower court's ruling.
The Oakland City Attorney’s Office responded in a statement to Cowboy State Daily.
“The City believes the bankruptcy court’s ruling on summary judgment was wrong in numerous respects," the office stated. "Even as the City seeks a resolution in Kentucky, we are working with OBOT here in California to move the project forward.”
Summarizing his view of the California legal landscape during Monday's hearing, Perkins emphasized how the California Supreme Court ruled in favor of the OBOT development team.
“That coal port is now going to be eligible to ship coal again,” Perkins told the committee.
David Madison can be reached at david@cowboystatedaily.com.
