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Customer-generated power electrifies calls for net metering reform

in Energy/News
solar power
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By Ike Fredregill, Cowboy State Daily

Dr. Jason Bloomberg spent more than $100,000 on his home’s solar and wind energy system with the idea he could recoup the costs through energy savings during the next 20 years.

“The goal is to reduce how much power we are using from the grid,” Bloomberg said.

But his repayment schedule could be put at risk if a plan to make renewable energy system owners pay a larger share of the costs faced by electric power providers is adopted by the state.

While renewable energy system owners can generate a large portion of their yearly power needs, most are still connected to power grids for supplemental power and as backup in case of system failure.

When they generate more power than needed at their location, the surplus is transferred to the power company’s system. For that power, the customer earns credits toward his total power bill. 

This billing mechanism is called “net metering” and is regulated by state statute. 

A net metering proposal brought before the Legislature’s Joint Corporations, Elections and Political Subdivisions Committee on Nov. 19 could have increased Bloomberg’s timeline to recoup his system’s costs to about 84 years, he said. 

“They are trying to fix something that isn’t broken,” Bloomberg said. “It’s a numbers shell game, it’s a Ponzi scheme that’s being presented by power companies, because the real competition of residential renewable energy is it’s hurting their monopoly on power production.”

While the proposal failed in a tie vote, committee Senate chair Sen. Cale Case, R-Lander, said legislators would likely continue to seek reforms in the state’s net metering policies at a later date to eliminate what he described as a subsidy for those generating their own power.

“This next session is a budget session, so I don’t think that’s the place for it,” Case said. “But, we’re going to be talking about this for a long time.”

Nickels and dimes

The debate centers around how much power customers who do not generate their own electricity have to pay compared to the costs paid by those who do have their own power generation systems.

At the Legislature’s request, the Public Service Commission’s Office of Consumer Advocate this year analyzed fixed and variable costs for three private power companies: Rocky Mountain Power, Montana Dakota Utilities and Cheyenne Light, Fuel and Power. 

The results, while varied, showed customers who do not generate their own power could spend 9 to 71 cents per month more on their power bill than those with generating systems.

“This is the amount Sen. Case is going on about when he says there is a subsidy being paid by regular rate payers to net metered customers,” Bloomberg said.

For Case, the amount — no matter how small — proves net metered customers are not self-sufficient and rely on their neighbors to foot a portion of their bill. 

“If nobody had net metering, there would be no cost shift, no subsidies,” Case said.

Case explained the cost shift occurs because private power companies wrap many of their infrastructure costs into the variable fees that net metering customers avoid paying by using credits earned through generation of their own power.

“In the utility industry, when you buy electricity, part of the price per kilowatt hour covers the energy,” Case explained. “But two-thirds of the amount per kilowatt hour covers fixed costs, including transmission lines, power plants and the other costs.”

Rocky Mountain Power spokesperson Spencer Hall said all the power company’s customers pay an interconnection fee, about $20 a month, but that only covers the maintenance of transmission lines, not necessarily additional infrastructure costs.

While the OCA report indicated fewer than 1,000 of the 200,000 customers served by the power companies studied used net metering, Case said that number could grow as people become more carbon conscious, increasing the potential subsidy to regular customers exponentially.

“There’s a lot of commitment here by people putting their own money on the line to make the planet a better place,” Case said. “These are very good people here. They’re very motivated. And, they really don’t believe there’s a subsidy, or if they do, they think it’s offset by them combatting carbon.”

Batteries required

Because the net metered customers are using renewable energy sources, they produce less power at night and during the winter, Case said.

“You might think net metering customers reduce cost on the system, because they are generating,” he said. “But the trouble is they don’t produce all the time.”

During those lulls, Case explained the power companies are experiencing the same problems, so they switch over to providing energy through other means, such as coal-fired power plants.

Essentially, net metered customers create a surplus of power when the company needs it least, generating credits to buy power back when it is most costly for the company to create, he said.

Bloomberg said power companies are installing more solar and wind power generation facilities, which would be counter-intuitive to Case’s peak-time usage argument.

“The reality is these industries are switching to solar and wind, because it makes financial sense,” he said. “There’s less costs associated with natural gas, solar and wind.”

According to Hall, Rocky Mountain Power is the largest renewable energy producer in the West.

“Once you build the windmill, you don’t have to pay for the wind and the sun,” he explained. “That’s a real value to our customers.”

But Hall said the company’s coal generation fleet still ramps up when needed.

“Coal generation is still an important part of our fleet,” he said. “But certainly, the future is renewables and low emissions.”

One of the reasons the power company can rely on renewable energy is the developing field of battery technology.

“Right now, battery technology is still expensive, and most folks can’t afford to incorporate that into their (net metered) system,” Hall said. “A lot of people think when they see those windmills turning, they are storing energy. That’s not the case.”

Because they can’t store the power, it is pushed onto the grid, Case said.

“When I’m producing excess electricity, the utility has to take it,” he explained. “It can’t stop it. So the utility will reduce its other sources of power, which are sometimes cheaper.”

As long as that remains the situation, Case there will be a call for net metering reforms.

Legislators on dwindling state revenues: ‘It’s real, it’s bad’

in Energy/News/Taxes
Silhouette of a Pump Jack
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By Ike Fredregill, Cowboy State Daily

As coal, oil and natural gas revenues decline, state legislators could have some hard decisions ahead, according to information generated by a strategic planning effort created by Gov. Mark Gordon. 

Dubbed “Power Wyoming,” the planning effort forecasts several scenarios for mineral-based state revenue streams during the next five years, all of which predict a deficit in coming years. 

The information compiled by Power Wyoming was presented to the Wyoming Legislature’s Joint Revenue Committee on Nov. 11. 

“The best projections in this model are very unlikely, and the worst are the most likely,” said Sen. Cale Case, R-Lander, the Senate committee’s chair. “That’s very scary.”

Case worked on Power Wyoming with Rep. Dan Zwonitzer, R-Cheyenne, chairman of the House Revenue Committee. Also on the team were members of the executive branch and economists familiar with the state’s energy sector such as Rob Godby, the University of Wyoming director for Energy Economics and Public Policies Center and a College of Business associate professor. 

Zwonitzer said the planning effort is the starting point to prepare for diminishing mineral revenues. 

“Power Wyoming is just the first step of saying, ‘Here’s what’s going to happen to Wyoming,’” he said. “The group was formed to get the message out there: ’It’s real, and it’s bad.’”

Renny MacKay, Gordon’s policy adviser, said Power Wyoming was not established to be a group of individuals working on potential solutions to the state’s revenue problems, but rather a group of experts working to gather to analyze data.

“This is a cone of different scenarios for both revenue and energy production,” MacKay said.

In its current iteration, Power Wyoming provides insight by compiling information from the state’s Consensus Revenue Estimating Group and the U.S. Energy Information Administration, among others.   

“Energy production is declining … and if there is production decline, the traditional jobs we have in Wyoming would be impacted,” MacKay said. “Information gives us power. The more we look at it, the more we talk about it, we can figure out what our opportunities are as a state.”

Worst case scenarios

While the coal industry’s struggles are being felt across the state, Case said Power Wyoming illuminated potential problems with the natural gas sector as well.

“I did not realize the issues with natural gas were as serious as they are,” he said. “Everybody else is thinking natural gas is doing great, and it’s not.”

The planning effort’s initial simulation results highlight some scenarios where the state’s total mineral revenue drops by 10 percent as early as 2020-2022 before a potential partial recovery by 2024. Some scenarios show a full recovery to expansion in revenues, but Power Wyoming reports they are the least likely cases within the current market conditions and expectations.

Most scenarios predicted a decrease in both Wyoming’s total employment and population, but in the worst case scenarios, the state’s total employment could decrease by about 20,000 jobs by 2024, followed by a similar decrease in population.

“In the next five years, there’s no way to absorb those (lost) jobs,” Zwonitzer said. “That means we’ll either have to have an increase in taxes, or a decrease in government services.”

In the worst case scenarios, he said the state would most likely need to pursue both. 

“We’ve lived a certain way in this state for 100 years with minerals paying the taxes,” Zwonitzer said. “That major revenue source is going away. So what does that look like for our future, and what do we want to do about it?”

Unreliable oil

Some of the scenarios, including those in the best case category, relied heavily on increased oil production balancing decreased coal and natural gas production. But Case warned against putting faith in the oil market.

“I think oil is very susceptible to environmental and carbon risk,” he said. “Changes in policy from Washington, D.C., and from other states could make it impossible to grow petroleum.”

A low-carbon policy consideration was also provided for the Revenue Committee as part of the Power Wyoming data package. Case said the presentation offered a more realistic outlook of oil than the initial simulation results put together by Godby.

In the policy consideration, Shell Global estimates a high usage of liquid hydrocarbon fuels, such as gasoline, in 2020 by about 25 million barrels a day. After the peak, however, the oil company predicts a gradual decrease down to 10 million barrels a day in 2060 and about 2 million barrels in 2100 as part of its strategy to comply with the Paris Climate Accord.

Most scenarios presented by Power Wyoming indicate the mineral sector is going to take a significant hit in the next five years, but even if the best case scenarios come true, Case said the future of energy is moving away from Wyoming’s traditional mineral offerings.

“This will tell you that the bad times are here,” Case said. “This is not just a tool for the Revenue Committee, but it’s also a tool for us. If you’re an employee in the coal industry, it’s probably time for you to get your own house in order.”

MacKay said Gordon is already working on the next steps of the planning effort. 

“We are bringing folks from the private industry now,” he explained. “Power Wyoming will definitely stick around for the foreseeable future.”

Losing coal could cost Wyoming dearly, take decades to recalibrate labor force

in Energy/Jobs/News
coal industry labor force
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By Ike Fredregill, Cowboy State Daily

Wyoming’s coal market has suffered devastating layoffs and mine closures in recent years, and by all accounts, the industry is shrinking. 

But, what if it dried up overnight? 

“If you were to instantly remove the coal industry, it would immediately cause job losses across the state,” said Robert Godby, the University of Wyoming director for Energy Economics and Public Policies Center and college of business associate professor. “You’re looking at about 5,000 miners directly involved in the coal industry. If you were to lose that all at once, people would feel that.”

It’s not just the miners, either. Godby said a sizable chunk of Wyoming’s labor market is reliant on coal.

“Approximately, there’s about 10,000 jobs directly or indirectly related to the coal industry — mining, electricity generation, railroads, plus all the businesses reliant on those workers’ wages,” he explained. “As coal declines in the state, we’ll have to transition those workers to other industries. And, there will not be enough jobs to absorb those workers.”

The good news, Godby said, is coal won’t disappear that quickly, but it could taper off sooner than Wyoming is prepared for. 

“In 2015, there were almost 5,600 miners in Powder River Basin, now there’s 4,400,” he said. “There are 12 mines up there that produce about 40 percent of the country’s coal. We could be below half of what we were producing in 2009 by the mid-2020s.”

High-paying careers

Data from the Department of Wyoming Workforce Services indicates once these workers lose gainful employment, many leave the state to work in the field elsewhere.

But, across the nation, there are fewer jobs for coal workers and retraining for other careers can mean starting all over.

“Those jobs pay really well,” Godby said. “It’s not only difficult to absorb and replace all those jobs, but you won’t be able to find jobs that pay nearly as well.” 

The average income for a coal industry employee is about $80,000 a year, he said. 

“The people who stay, if those jobs were to disappear, may have to do something else,” Godby said. “Many of those workers may have to accept the fact that unless they go back to school, retrain or re-skill, they won’t find jobs that pay as well.”

When a layoff occurs in any industry, Workforce Services deploys a rapid response team, agency spokesperson Ty Stockton said.

“In Wyoming, we don’t have very many businesses that have 600 employees that could get laid off,” Stockton explained. “We don’t have a real threshold for deploying the team. When Laramie County Community College (LCCC) laid off 17 employees in 2016, they went in for that.”

A team was also sent out in 2016 when about 500 workers were laid off from the North Antelope Rochelle and Black Thunder mines in Campbell County. More recently, Workforce Services deployed a rapid response team to Gillette when Blackjewel, LLC, abruptly laid off about 600 workers at the Belle Ayr and Eagle Butte mines in Campbell County.

“Rapid response is about giving those folks options and information,” Stockton said. “If they don’t have information, there’s nothing they can do.”

Teams can include mental health counselors, Wyoming Department of Family Services staff to help families, Wyoming Department of Health staff to help with health insurance questions and Workforce Services employees to discuss unemployment options and help laid off workers start the search for their next job, he said.

‘Generation of pain’

But all of those are stop-gap measures designed to lessen the blow to recently out-of-work families. 

In the long term, Workforce Services also provides funding for a number of vocational rehabilitation programs. 

“We’re trying to keep (the workers) here and give them some options,” Stockton said. 

The agency has access to about $2 million for retraining coal workers through the Partnerships for Opportunity and Workforce Economic Revitalization Grant, aka the POWER Grant.

“The only people eligible for the POWER Grant are the primary industries associated with coal-fired power plants and the coal mines,” Stockton explained. “But we also have the Workforce Innovation and Opportunity Act, and that covers everybody.” 

Additionally, Workforce Services helps fund some apprenticeship programs through grants. 

“Training an apprentice is expensive,” Stockton said. “The apprenticeship program was set up to help offset those costs, so if you need a few apprentices, you can apply for these grants and have their training paid for through the apprenticeship grant.”

About 80 trainees are currently enrolled in apprenticeship programs for electrical, plumbing and heating and cooling careers at LCCC and Northwest College, he said. 

Even with training programs already in place, Godby said recovery from the loss of an industry as big as coal would take years.

“To transition a labor force to work on anything else is going to take about at least about a decade,” he explained. “If we look at other industries like the furniture industry in the Southeast, soft wood lumber in the Pacific Northwest and the industrial decline in the Midwest, those transitions typically take a generation to overcome. That’s a generation — 20 to 30 years — of pain.”

Bill to authorize nuclear waste storage talks withdrawn

in Energy/News
Wyoming Legislature nuclear waste storage protest
A protest sign lies next to the sign-in sheet at Tuesday’s meeting of the Legislature’s Joint Minerals, Business and Economic Development Committee. The committee was to have studied a bill that would authorize the state to negotiate with the federal government over the storage of spent nuclear fuel rods, but the bill was withdrawn without action being taken. (Photo by Tim Mandese, Cowboy State Daily)
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By Tim Mandese, Cowboy State Daily

CASPER — A measure that would have allowed the state to negotiate with the federal government over the possible storage of spent nuclear fuel rods in Wyoming was removed from consideration Tuesday by a legislative committee.

Members of the Legislature’s Joint Minerals Business and Economic Development Committee agreed to stop work on the bill after its Spent Fuel Rods Subcommittee, formed to examine the issue, met in September.

Sen. Jim Anderson, R-Casper, a chairman of both the committee and subcommittee, told committee members that based on what the subcommittee heard during its meeting, legislative authorization for the state to enter into negotiations over spent nuclear fuel storage is not needed

“I have prepared a bill as the chairman if the committee to give the governor’s office authority to negotiate with (the federal Department of Energy) on this subject,” he said. “I found out that we really don’t need to give the governor’s office the authority, that they have the authority right now. So at this time, I would like to withdraw that bill from the docket.”

Members of the Legislature’s Joint Minerals, Business and Economic Development Committee during their meeting in Casper on Tuesday.
Members of the Legislature’s Joint Minerals, Business and Economic Development Committee during their meeting in Casper on Tuesday. Committee members were to have reviewed a bill that would authorize the state to negotiate with the federal government over the storage of spent nuclear fuel rods, but a subcommittee formed to examine the issue decided to pull the bill from consideration. (Photo by Tim Mandese, Cowboy State Daily)



Anderson also told the committee that any negotiations could take five to nine years to complete.

The idea of storing spent nuclear fuel in Wyoming has surfaced several times over the last three decades and each time, it has generated strong opposition.

Opponents to the plan were on hand for Tuesday and said they were prepared to argue that any rewards from accepting spent nuclear fuel would be outweighed by the risks.

 “The biggest issue for me and the state of Nebraska, who says they don’t want a dry cask storage place to get the transportation coming through, it’s the transportation,” said Coleen Whalen, a spokesperson for Wyoming Against Nuclear Dumps. “It’s going to get off on I-80 and I-25 on our teeny little highways“

Whalen said she was pleased the committee killed the bill, but unsure of how the issue would unfold going forward.

“The bill kind of came up quick and the withdrawal of it, I’m glad they are not telling the governor to negotiate, but it could be that they are just moving it out of the public eye,” she said.

Anderson noted that there are no plans for Gov. Mark Gordon to open negotiations with the Department of Energy about the waste storage.

What if coal production drops to zero? Legislature looking for new revenues

in Energy/Government spending/News/Taxes
Electricity
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By Laura Hancock, Cowboy State Daily

Coal production in Wyoming has dropped by over 100 million tons in the past decade, and state Sen. Cale Case doesn’t think the downward slide is close to finished.

“There isn’t a scenario where it turns around, where the decline stops,” said Case, R-Lander, a co-chair of the Wyoming Legislature’s Joint Revenue Committee. “No one can articulate that.”

That will likely spell trouble for state coffers, which are dependent on coal revenue to pay the bills.

What if coal production trickled down to zero? It’s not entirely a hypothetical question these days, considering PacifiCorp’s recently announced draft plan to retire coal plants early.

Fueling state accounts

Wyoming coal producers pay severance taxes, federal mineral royalties, coal lease bonus revenues and ad valorem taxes at various points of the mining process, which flow to different state, education and local government funds. But each revenue source has decreased in the past 10 years:·      

  • Severance taxes: In 2009, mining companies paid the state $273.3 million. In 2018, they paid $198.8 million. In 2024, state projections show they could pay $185.9 million.·      
  • Federal mineral royalties, which are divided between the federal and state governments by 51% and 49% respectively: Wyoming received $262.5 million in 2009 and $198.1 million in 2018. Federal data didn’t contain royalty projections for the future.·      
  • Coal lease bonuses, which have funded Wyoming’s ambitious school construction program, were $213.6 million in 2009 and $5.3 million in 2018. From 2019 to 2024, the state estimates $0 from the bonuses, collected when mining companies pay for expanding operations on federal land. There are no expectations that mines will expand operations in the near future. ·      
  • Ad valorem taxes, assessed on the value of coal and paid a year after the assessment: Coal companies paid taxes on $3.8 billion in 2009 assessed valuations. They are expected to pay taxes on $2.8 billion in 2018 assessed valuations. By 2024, state projections show valuations falling by another $100 million to $2.7 billion.

The total income from severance taxes, federal mineral royalties and coal lease bonuses dropped from $749.4 million in 2009 to $402.2 million in 2018.

Case notes these figures don’t include sales and use taxes companies pay for items small and large — ranging from paper for copiers to tires for haul trucks.

“We don’t get the sales tax on stuff they buy,” he said. “Because they’re not buying much anymore.”

Replacement revenues

As Revenue Committee co-chair, it’s Case’s job to consider ways to make up for lost coal revenue.

“That’s a big lift,” he said. “It’s a lot of money.”

True, oil and gas continue to bring Wyoming revenue – but not enough to replace coal. And it’s entirely possible, with market concerns about global climate change, that new restrictions could kill demand for those fossil fuels.

Among proposals before the Joint Revenue Committee:      

  • The committee advanced a proposal in September that would create a corporate income tax of 7 percent on companies with at least 100 shareholders – in other words, businesses not generally headquartered in the state. The revenue created would be around $20 million to $25 million a year, Case said. It’s not a replacement for coal, but a start. A similar measure failed earlier this year in the Legislature.
  • Changes to property taxes, including: An increase in the statewide mill levy for schools, increases in some property taxes, and creating a new property tax class for multi-million dollar homes.
  • Wyoming taxes wind $1 per megawatt hour. Case would like to see it increased. Case would, in general, like to impose an electricity export tax. “Wyoming’s biggest export is electricity,” he said. At this point, there is no bill draft before lawmakers.

Many conservatives have said they want to see cuts to state government before looking to raise taxes.

“Here’s what I tell people: you’ll get your cuts,” Case said. “We’re going to have to cut like crazy. And we’re still going to need revenues. This is very serious. We’ve never faced anything like this.”

Ongoing discussions

The Wyoming Taxpayers Association, which represents many of the companies that would be affected by a corporate income tax, didn’t support the idea in the Legislature earlier this year. Its leadership hasn’t yet decided on its position on the bill currently under consideration, said Ashley Harpstreith, the organization’s executive director.

The Wyoming Taxpayers Association will be discussing the state’s revenue picture at its annual meeting next month. 

“The point is we’re going to have to have those hard conversations,” Harpstreith said. “It’s coming to a head. Industry has been paying the bills for a long time.”

Wyoming filmmaker looks at plan to use nukes in fracking

in Community/Energy/News
Atomic Fracking in Wyoming
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By Seneca Flowers, Cowboy State Daily

A Wyoming filmmaker will soon share the results of several years of document research and interviews to tell a story many people have never even heard of—atomic fracking.

Greg Asay’s documentary “Atomic Fracking in Wyoming: The Story of Project Wagon Wheel” is a visual exploration into a slice of Wyoming history often forgotten. It will air on Wyoming PBS on Nov. 19.

Asay originally learned about Project Wagon Wheel while he attended law school. It was the story of how atomic fracking was nearly put into practice in Wyoming, and it ignited his interest.

After law school, while working in Cheyenne, Asay found time to go to Laramie to explore the forgotten history of atomic fracking in the state.

He spent about two years rifling through various boxes in the American Heritage Center searching for anything that gave him clues, examining thousands of historic documents.

“The whole thing was so gradual,” Asay said. “I just kept getting a little bit more and then, a little bit more.”

He eventually discovered about 2,000 photos and a slew of documents. He journaled his findings. As much as he enjoyed the process, there were times when he had to take breaks—up to months. But he always went back. 

Eventually, after nearly exhausting his search, he stumbled upon the last box that would hold the cornerstone of his video—eight original audio interviews of people directly involved with the project recorded by writer Chip Rawlins. These cassettes would begin to tell the story of atomic fracking in Wyoming.

After World War II, the U.S. Atomic Energy Commission explored peaceful and useful ways to expand the use of nuclear energy in the United States. In cooperation with El Paso Natural Gas Company, the commission used nuclear explosives to extract natural gas from sandstone formations at test sites in New Mexico and Colorado in the 1960s and ‘70s, Asay said. These tests were to play a large role in the company’s gas extraction future.

When El Paso Natural Gas wanted to conduct tests 19 miles south of Big Piney at the Wagon Wheel site, some community members held a meeting to discuss the project and learn more. The town hall meeting drew about 1,000 people to the town with just a few more than 500 residents.

Some of the residents assumed if the government was part of the project, it was probably safe; but some community members weren’t so trusting, said Ann Chambers Noble.

Noble is a historian who included a chapter about Project Wagon Wheel in her book “Pinedale, Wyoming: A Centennial History, 1904-2004.” Not only has she researched the topic in-depth, but she also remembers first-hand how the town had concerns for the nuclear fracking. In her middle school years, while the project was under consideration, she and her family would spend summers in Pinedale. She noted area residents were curious as to what atomic fracking would truly mean to them.

In 1971, locals formed an exploratory group called the Wagon Wheel Information Committee to learn more about how the El Paso Natural Gas Company would extract the gas. The committee was comprised of non-experts, such as ranchers, looking to understand more about the process, Asay said. 

After learning more about the project, members the committee began to feel uneasy about it. By 1972, area residents opposed the project by a 2-to-1 margin as tallied by a local straw poll, according to Asay.

Eventually, the controversy and delays caused by the committee’s work quelled support for the project.

Asay kept researching the committee’s journey and how members helped stop a potentially dangerous practice in their community. His narrative, actually the community’s narrative, began to take its first crude form. During the process, Asay found Noble’s book and contacted her.

Noble said she wasn’t sure what to think of his inquiry at first.

“You get a lot of these random emails as a historian,” she said. “and Greg sent me a cold email.”

At first she didn’t think much of it, but Noble said she began corresponding with him. It wasn’t until she realized Asay fully grasped the significance of the committee that she began to take him seriously. She shared with him photos and stories, which became part of the final version. Eventually, Asay shared his first rough cut of the video with her — nearly two and one-half hours, he said.

Noble reviewed a draft of the film and gave feedback to Asay. She said he really tried to achieve a correct depiction of the community and include subtle but accurate details. He wanted his film to be the community’s story.

“I love what he did,” Noble said. “I feel he really captured the story.”

Asay said he went through a couple of edits before finally polishing the 60-minute product that will soon air on PBS.

The story has become a part of Asay, One that he is compelled to share even on the road.

“There’s a turnoff near Pinedale,” Asay said. “I always point to it.”

Atomic Fracking in Wyoming: The Story of Project Wagon Wheel” airs on Wyoming PBS Nov. 19.

Hits to coal prompt leaders to look elsewhere for development

in Economic development/Energy/News
As revenue from coal continues to decline, many people around the state are looking at new ways to use the state’s rich resource and think outside of the coal box for future portfolio diversification.
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By Seneca Flowers, Cowboy State Daily

As revenue from coal continues to decline, many people around the state are looking at new ways to use the state’s rich resource and think outside of the coal box for future portfolio diversification.

Many people watching renewable energy expect it to eliminate the need for coal, but they are often not thinking out of the box, according one state representative.

State Rep. Mike Greear, R-Worland, said people are often neglecting coal’s future possibilities. Greear is co-chair of the Legislature’s Minerals, Business and Economic Development Committee. He said the state has many developments it is exploring that still involve coal.

Greear said the University of Wyoming is continuing research on carbon capture sequestration and the utilization of the C02 for enhanced oil recovery. He visited the Petra Nova carbon capture and sequestration facility in Houston and believes Wyoming facilities would be great candidates for the same technology.

The Petra Nova facility is currently the only existing American coal-fired power plant using the carbon recapture technology, according to the U.S. Energy Information Administration. The facility captures the C02 from the plant, liquifies it, and then injects it into oil fields. 

The process causes oil to swell, increasing the oil recovery volume. The process has reduced C02 total emissions at the Petra Nova facility by 33 percent.

Rob Godby, director for the UW’s Center for Energy Economics and Public Policy, said the state is actively helping develop new products for coal to maintain tax revenues. He said once promising technologies become developed, companies are more willing to adopt them. 

He pointed as an example to pipelines in Wyoming delivering C02 from natural sources to enhanced oil recovery operations. If C02 captured from coal-fired plants could be sold, the revenue could offset the overall cost of coal-generated electricity and make it more competitive with natural gas. 

Not a coal problem

However, if the state continues to focus only on coal as a large revenue source, leaders may be missing other great possibilities, according to one person working directly with growing businesses.

Fred Schmechel, assistant director of the Wyoming Technology Business Center, works at the UW in a program that helps businesses grow with a goal of bringing more revenue to the state and employing residents. So when state revenues decline, he sees the results directly in his workplace. Yet, he cautions everyone who considers this a “coal problem.”  

“Wyoming doesn’t have a coal problem,” Schmechel said. “Wyoming has a revenue problem. When we reframe it like that and figure out how we pay for our services, that opens up much broader funnel of possibilities.”

 Schmechel sees diversification of the economy and expansion of revenue streams as vital to the future growth of the state.

“If we keep trying to sell to the same 10 people, none of us are going to get rich, but if we broaden our scope and sell beyond our borders, bring that cash here, that’s where we increase our lot,” Schmechel said.

Schmechel said if wages increase, people can pay more for services and make the state less dependent on coal revenue. He also suggested that getting businesses to use services based in the Cowboy State can help expand revenue streams. 

“If we continue to focus on developing companies that solve problems outside of Wyoming and bring more revenue in, that ultimately brings more cash on hand to play with,” he said.

Greear also thinks the state needs to explore alternatives to coal, but bringing new business to Wyoming is easier said than done.

Severance taxes or bust

“We are going to still be mineral reliant in this state so long as we hold onto our current tax policy,” Greear said. 

He added he does not see the tax policy changing, but that he believes a policy change is needed. 

Change, however, would alter the dynamic and culture of the state. That places Greear at odds with some of his constituents who simply aren’t ready for change. As an elected official, Greear said he must listen to them.   

“Most people understand the changes with society,” Greear said. 

He added it is easier to push those concepts in towns like Laramie and Cheyenne because of their proximity to Fort Collins and Denver, but such changes might not fly in a town like Worland. 

Towns are also dependent on larger populations to attract and sustain more tech and business, leaving smaller towns out of the mix. It also makes it unrealistic to apply a one-size-fits-all approach to the issue, he said.

Holding out for the youth

Schmechel also said he wants to keep young people in the state and create jobs for them so they can to “plant their roots” for future generations.

Schmechel sees economic diversification and development as a way to expand a town’s culture, not diminish it.

“There are lots of people who look at anything that we are doing like this and assume we are losing our culture of Wyoming, and I think those people are mistaken,” Schmechel said.

“We don’t have to be Boulder or San Francisco. We are never going to be those communities. We have found in Laramie, Casper and Sheridan, where we have our three incubators for the WTBC, that each of those communities bring on their own feel.” 

As those communities grow and develop, their core values are moved forward, growing and strengthening their existing culture.

Godby also sees the need for diversification as necessity to independence.

“Do we need to diversify more, yeah,” Godby said. “The problem is when you rely on energy, you are going to be bound by energy cycles that are out of your control and typically driven by things outside of your state.”

The Blackjewel effect

Rick Mansheim, manager of state Workforce Centers in Gillette and Newcastle, has watched the Blackjewel layoffs from the front row. He has a lot of conversations with the workers and businesses around the state. He also believes Wyoming needs more jobs outside of energy.

“The key is diversification,” Mansheim said. “We need to broaden our scope.” 

He believes internships and early career path exposure is key to getting young workers involved in that effort.

Greear believes economic development around the state is productive, but often suffers from growing pains.

“There are some really good economic development organizations within communities,” Greear said. “But it’s kind of the hand your dealt. Cheyenne is going get a lot more looks at things you are not going to get in Worland.”

 He added that state leaders sort of had tunnel vision attracting specific types of businesses that were not fits for every community. 

“What is going to work in Cheyenne is not going to work in the Big Horn Basin,” Greear said. 

ENDOW’s impact across industries

But he believes creative ideas are still important. He cited the Economically Needed Diversity Options for Wyoming — ENDOW — initiative as helping leaders think outside of the box. 

ENDOW was created in 2016 to diversify and expand the state economy.  Greear said ENDOW challenged people to think outside of the box and pursue opportunities such as value-added agriculture, which is changing a product to enhance its value through niche marketing, uniqueness or improving a supply chain.

Schmechel, whose organization assists many businesses with incubator programs and creative solutions, sees both existing and new economic sectors as exciting opportunities for business growth.

He added Wyoming’s vast spaces would be great for autonomous vehicles and drones. In addition, he suggested exploring UW’s cache of intellectual property for application in industries such as agriculture and making sure it is being used correctly.

He said the state’s agriculture community is doing great things and should be expanded upon.

Trade sector could use displaced coal miners, officials say

in Economic development/Energy/News
2129

By Seneca Flowers, Cowboy State Daily

Business and government leaders around the Wyoming are scrambling to make sure Wyoming workers remain Wyoming workers as the jobs in the coal industry subside.

In 2016, nearly 7 percent of the state workforce was employed in the extractive energy sector, which includes coal, according to the U.S. Department of the Interior. But with Blackjewel’s recent layoff of nearly 600 people, the state will feel the shockwaves on multiple fronts. The immediate issue is figuring out how to re-employ displaced workers. The good news is skilled trade workers are in more demand than many may think, according to some officials around the state.

Rick Mansheim, manager for state Workforce Centers in Gillette and Newcastle, has been in the front lines of trying to get the miners back to work. He said he has heard that more than 100 miners may have found new jobs, but his organization has no way to know the exact number.

“We have a whole gamut of training we can do,” Mansheim said. 

He said that some of the Blackjewel employees are taking commercial driver’s license and other college classes. He added that in the past, his offices have also been able to help people into the nursing and welding fields.

After Blackjewel’s two mines closed, the Gillette and Newcastle Workforce Centers held information sessions at the Gillette College Technical Education Center that attracted more than 300 people from the mines. The centers also held career fairs with employers from the region that attracted nearly 500 job seekers.

Help wanted in the trades

Mansheim said many companies heard of the layoffs and reached out to him directly looking to fill the void of trade workers.

State Rep. Mike Greear, R-Gillette, said the state needs more trade workers. Greear is the co-chair of the Legislature’s Minerals, Business and Economic Development Committee and also the president and CEO of Wyoming Sugar.

As a CEO, Greear said he cannot recruit skilled workers. They just aren’t there. So he must develop and continuously look for them. He said he has heard similar stories from other businesses in the state.

“I think it is an unintended consequence of the Hathaway (scholarship) program, which is a wonderful program,” Greear said.

He said many young people have chosen to pursue a college education rather than enter the trade sector.

As a company president, he is soliciting high school students and offering them trade jobs with possible future opportunities that include welding or machinist certifications for those who would like to remain in their communities.

But he can only do so much as a business leader. As a state leader, he is also limited.

“The Legislature can do good things—it can set policy, it can help guide us over some bumpy roads, but in the end, it’s got to be up to the industry to be able to attract them,” Greear said. “The government can’t do everything for everyone.”

The disappearing coal job

For those workers who want to remain in their communities, finding coal jobs is going to be more difficult as the industry slows and transforms.

Economist Rob Godby, director for the University of Wyoming’s Center for Energy Economics and Public Policy, doesn’t see coal magically rebounding anytime soon because technology and the free market will naturally reduce coal’s demand.

“Coal is in real decline,” Godby said. “The (Blackjewel) bankruptcy this summer has demonstrated how disruptive that can be.”

Godby said he expects renewable energy sources such as wind and solar to become the dominant providers of energy in the future because of policy changes with climate change and technological advances that make renewable energy production more efficient.

Greear acknowledged renewables are part of an overall portfolio for energy, but they are often erroneously blamed for the decreasing coal demand.

“The real driver of coal moving out of being the more attractive option is low natural gas prices—plain and simple,” Greear said. 

He added that as coal’s share of energy production has declined, the share provided by renewable energy has increased. But renewables have revealed some reliability issues, according to Greear, so he sees natural gas as a more stable source of energy.

Godby said technology is to blame for cheaper natural gas, which he calls “the largest factor to coal’s decline.”

In addition, Godby said technological advances in natural gas production and renewable energy production have caused coal to lose its market share prominence. The impact will not likely reverse, he said.

“You can’t put those technologies back…you can’t put those genies in a bottle,” Godby said. “Once they are invented, they are really hard to forget. Technological progress happens all the time. It’s disruptive, and old technologies are replaced by new ones.

“Nobody’s building the coal-fired power plants,” Godby continued. “So eventually they are going to age out, be retired. And they are not being replaced with other coal-fired power plants.” 

Diminished local dollars from coal

Fewer coal-fired plants mean less revenue for the state and towns.

Coal production in Wyoming has declined 22.6 percent in last five years, 29.7 percent in last the 10 years, and 34.8 percent since its booming peak of 2008, according to the Wyoming Mining Association.

Coal is the second largest source of tax revenue to state and local governments, according to the WMA, with about $1 billion in tax revenue paid every year.

But the reality is that coal may not always be able to pay the bulk of the government’s bills—at least not in its current state.

Greear said state and local governments have some time to prepare for a downturn in revenues.

While coal-fired plants are shutting down, supply projections suggest production of 240 million to 260 million tons for the next 10 years.

Although Greear expects a slow, steady decline in production, he doesn’t count coal out of Wyoming’s revenue stream entirely.

Greear said there is demand for Powder River Basin coal among some Asian countries. However, efforts to build coal terminals in Washington that would allow shipments to Asian countries have failed.

Godby said even if the terminals were built, they wouldn’t likely be a long-term solution to the coal industry’s woes and may just prolong its demise.

He added even though a prolonged death may still be economically beneficial to the state in the short-term basis, the long-term outlook may not be positive.

“It’s far from guaranteed that the developing world is going to stick to coal for quite a while,” Godby said. “It is also the case that countries like China and others are turning to renewables and natural gas much more quickly than people expected.”

Subcommittee collects facts on nuclear waste storage

in Energy/News
Nuke Hearing
1973

By Tim Mandese, Cowboy State Daily

A legislative subcommittee formed to examine the possibility of storing spent nuclear fuel rods in the state is just collecting facts on the issue so far, its chairman said Thursday.

Sen. Jim Anderson, R-Casper, chairman of the Legislature’s Spent Fuel Rods Subcommittee, told listeners at the group’s first meeting in Casper that the committee would offer no opinions on whether nuclear waste should be stored in the state.

The Wyoming Legislature’s Spent Fuel Rods Subcommittee in Casper (photo credit: Tim Mandese).

During the hearing, committee members heard from members of the U.S. Nuclear Regulatory Commission, the U.S. Department of Energy and a retired nuclear physicist.

The committee’s questions focused on the type of waste to be stored, containment, storage, transportation and location requirements as well as the permitting process. Safety concerns and risk assessments were also discussed.

Nuclear waste can take many forms, and come from many sources. Sources of waste include material from commercial power plants and non-power reactors as well as waste from medical, industrial, and academic uses of radioactive material. The primary focus of the meeting was on one type of waste, spent fuel rods used in nuclear power plants.

Spent fuel rods contain nuclear fuel that has reached the end of its useful life. Such fuel is physically hot and contains ionizing radiation and is held in a containment vessel or “cask”. The casks are made of several inches of lead or depleted uranium (which is not radioactive) sandwiched between inner and outer layers of concrete, to provide gamma ray shielding that reduces the radiation emitted to levels just above normal background radiation. The federal government is looking for a temporary storage spot for the waste pending congressional funding for completion of the Yucca Mountain Nuclear Waste Repository in Nevada.

Under consideration for Wyoming is an above-ground “Monitored Retrievable Storage facility,” or MRS that would hold a maximum of 10,000 metric tons of waste.

Currently, no applications for site permits have submitted, so no specific sites have been determined. Recommended locations for MRS sites would be near a rail spur and away from populated areas.

Mike Layton, director of the NRC’s Division of Spent Fuel Management, said waste would be transported by truck and rail in the casks, which are built to withstand drops onto hard surfaces, punctures, fire and water immersion.

According to the NRC, no casks have leaked in over 40 years of transporting nuclear waste.

Before a storage site can be approved, a lengthy permitting process — sometimes taking up to nine years — is completed by the NRC, said John McKirgan, chief of the NRC’s Spent Fuel Licensing branch.

The Wyoming Legislature’s Spent Fuel Rods Subcommittee in Casper (photo credit: Tim Mandese).

The process begins with the prospective licensees making a deposit of $800,000, according to the agency, and examines scenarios including earthquakes, floods, tornadoes and other natural disasters.

Pete Davis, a retired nuclear physicist who conducted a study into the impacts of a breech of the Yucca Mountain containment facility, told committee members the only scenario that would result in a leak of nuclear material would be the intentional crash of a commercial aircraft into the facility.

Parts of the aircraft engine and landing struts were found sufficient to penetrate the waste handling building during a crash, Davis said.

The study concluded that in such a disaster, 42 spent fuel assemblies would be impacted and all rods ruptured. All fuel pellets would be converted to powder by the resulting fire and 12 percent of the powder would be released into the atmosphere. The scenario also assumes the winds blowing to highest population sector or 100,000 people. The study concluded that about six latent cancer fatalities would occur as a direct result of such an accident, along with a 0.03 percent increase in cancer fatalities for the exposed population.

A big dam deal: Buffalo Bill Dam expansion celebrated

in Agriculture/Energy/News/Recreation
1888

By Cowboy State Daily

The anniversary of the completion of one of Wyoming’s most impressive engineering feats was celebrated recently as Cody marked the 25th anniversary of the expansion of Buffalo Bill Dam.

The $132 million expansion project launched in 1985 raised the dam’s height from 325 feet to 350, increasing its storage capacity by 260,000 acre-feet.

The “Great Dam Day” on Aug. 17 celebrated the completion of the project with a number of activities that gave visitors a chance to stop by the dam and its visitor’s center.

Among the attendees was Bill McCormick, who served as the project manager for the expansion.

McCormick said one of the most challenging parts of the job was removing a large section of a mountain to allow for the expansion.

Project officials soon figured out that rock from the mountain could be used as “riprap” to line the reservoir’s shoreline, he said, eliminating the need to bring in the material from elsewhere.

“So it seemed very logical,” he said. “We had good granite right here and (workers could) take the rock from here.”

While the project was originally supposed to be completed in five years, various developments delayed completion, McCormick said.

“The estimated five years for the project actually took 11 as things were modified or problems came up or the design changed,” he said.

The dam today provides irrigation water for more than 90,000 acres of land in the Big Horn Basin, along with a 6-mile long reservoir that serves as a recreation area.

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