Category archive

Energy - page 2

Gordon Releases Study Showing Benefits Of Coal Plant Retrofit

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

Gordon Releases Study Showing Benefits Of Coal Plant Retrofit

Equipping some Rocky Mountain Power coal-fired generating plants with carbon capture technology would provide greater benefits than simply retiring the plants as the company plans, according to a study released Thursday.

However, the power company questioned the conclusion reached by Leonardo Technologies in its study unveiled by Gov. Mark Gordon and officials from the U.S. Department of Energy during a news conference Thursday.

During the news conference, Gordon and the others said the study showed how Wyoming can take the lead in carbon capture technology.

“Aggressive (carbon capture, utilization and storage) initiatives could establish Wyoming as a world leader in that technology,” said Steve Winberg, assistant secretary of Fossil Energy for the DOE. “That effort would pay large and increasing dividends to the state as (carbon capture, utilization and storage) becomes one of the dominant economic and energy technologies of the 21st century.”

Rocky Mountain Power, in its 2019 integrated resource plan, announced that it would retire nine power units at its coal-fired plants in Wyoming by 2028. One unit, at the Naughton plant in Kemmerer, was retired in 2019.

The company said by moving toward natural gas and renewable energy, it would be able to reduce carbon dioxide emissions and power costs for its customers.

In response, Gordon asked the U.S. Department of Energy to conduct a study to determine whether putting carbon capture, utilization and storage technology the plants would reduce carbon emissions while allowing for the continued use of Wyoming coal and the related employment.

In addition, Wyoming’s Legislature adopted a bill in 2020 prohibiting utilities such as Rocky Mountain Power from recovering the costs of retiring plants through rate increases and allowing the utilities to collect a surcharge from customers to pay for the retrofitting of plants with carbon capture technology.

Leonardo Technologies, in its study of power units at the the Jim Bridger plant in Rock Springs, Naughton plant in Kemmerer and Dave Johnston plant near Glenrock, said the retrofitting of the plants would result in lower carbon emissions, lower power costs and a lower loss of jobs than if Rocky Mountain Power followed through with its plans to retire the plants. The study also concluded that local and state revenue from coal taxes and royalties would be higher if the plants were equipped with carbon capture technology.

But Rocky Mountain Power, in a reaction to the study’s release, said the study failed to take several factors into account, such as the cost of extending the lives of the power plants long enough to make the investment in carbon capture technology worthwhile.

“PacifiCorp (Rocky Mountain Power’s parent company) continues to examine the study’s assumptions and calculations to properly evaluate its conclusions, but the list of items missed by the study’s analysis is very long,” the company said. “This type of calculation ignores so many elements (all but capital), and should not be relied upon for making the kinds of decisions required of a regulated utility.”

Among the missed costs, according to the statement, were “everything associated with how a utility’s costs flows into rates,” including fuel costs, costs from market purchases, property taxes and net power costs.

The statement said Rocky Mountain Power considered retrofitting the plants before making the decision to retire them.

“Given the current high capital costs of implementing carbon capture on coal-fired generations, as well as other barriers, carbon capture has not been considered a viable option to date, which is why it has only been installed at a single facility nationwide,” it said.

That one facility was mothballed earlier this year because of economic concerns, the company said.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Cheney Pleased With Interior Decision to Open Arctic To Oil & Gas Development

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

U.S. Rep. Liz Cheney welcomed Monday’s news that energy development would be allowed in the Arctic National Wildlife Refuge (ANWR).

The Department of Interior announced on Monday its intention to allow oil and gas development in roughly 10% of the area.

Predictably, the announcement caused a schism between both parties with Cheney signaling her support by tweeting the Wall Street Journal article which had the story first.

“Today’s announcement by Secretary Bernhardt approving drilling in ANWR is another promise kept by President Trump that will boost our country’s domestic energy production while also returning power to state and local officials where it belongs,” Cheney said on Twitter.

Although Democrats predicted environmental doom if the area was developed, the handwringing may be premature.  

The issue has been a political football for more than 30 years, and as the New York Times reported on Monday “any oil production within the refuge would still be at least a decade in the future” if it ever happens.

Already one group is ready to sue the administration over it.

“The Trump administration’s so-called review process for their shameless sell-off of the Arctic Refuge has been a sham from the start. We’ll see them in court,” said a statement from Lena Moffitt, the Sierra Club’s senior director of its Our Wild America campaign. 

Plus, with energy prices so low, the business climate for development could be an obstacle.

“Current market forces weigh against the industry trying to sink new wells in such an expensive and inhospitable place, and that consumer pressure against such moves will be considerable,” wrote Scott Martelle of the Los Angeles Times.

Oddly, President Trump didn’t tweet anything about the news on Monday but told FOX News that he would “take a look” at the Dept of Interior’s decision.

“ANWR is a big deal that Ronald Reagan couldn’t get done and nobody could get done,” Trump said.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Wyoming Teams Up With MIT to Explore Energy and Climate Solutions

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Representatives from the Wyoming Governor’s Office, University of Wyoming School of Energy Resources, and Wyoming Energy Authority are exploring future avenues for collaboration with faculty and researchers from the Massachusetts Institute of Technology (MIT) to strengthen Wyoming’s energy economy while lowering CO2 emissions

“This moment in time presents us with an opportunity to seize: creating a strong economic future for the people of Wyoming while protecting something we all care about—the climate,” said Wyoming Governor Mark Gordon. “Wyoming has tremendous natural resources that create thousands of high-paying jobs. This conversation with MIT allows us to consider how we use our strengths and adapt to the changes that are happening nationally and globally.” 

The two dozen participants from Wyoming and MIT discussed pathways for long-term economic growth in Wyoming, given the global need to reduce carbon dioxide emissions. The wide-ranging and detailed conversation covered topics such as the future of carbon capture technology, hydrogen, and renewable energy; using coal for materials and advanced manufacturing; climate policy; and how communities can adapt and thrive in a changing energy marketplace.

The discussion paired MIT’s global leadership in technology development, economic modeling and low-carbon energy research, with Wyoming’s unique competitive advantages: its geology that provides vast underground storage potential for CO2; its existing energy and pipeline infrastructure; and the tight bonds between business, government and academia.

“Wyoming’s small population and statewide support of energy technology development is an advantage,” says Holly Krutka, executive director of the University of Wyoming’s School of Energy Resources. “Government, academia and industry work very closely together here to scale up technologies that will benefit the state and beyond. We know each other, so we can get things done and get them done quickly.”

“There’s strong potential for MIT to work with the state of Wyoming on technologies that could not only benefit the state, but also the country and rest of the world as we combat the urgent crisis of climate change,” says Bob Armstrong, director of the MIT Energy Initiative, who attended the forum. “It’s a very exciting conversation.”

The event was convened by the MIT Environmental Solutions Initiative as part of its Here & Real project, which works with regions in the U.S. to help further initiatives that are both climate-friendly and economically just.

“At MIT, we are focusing our attention on technologies that combat the challenge of climate change—but also, with an eye toward not leaving people behind,” says Prof. Maria Zuber, MIT Vice President for Research.

“It is inspiring to see Wyoming’s state leadership seriously committed to finding solutions for adapting the energy industry, given what we know about the risks of climate change,” says Laur Hesse Fisher, director of the Here & Real project. “Their determination to build an economically and environmentally sound future for the people of Wyoming has been evident in our discussions, and I am excited to see this conversation continue and deepen.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Campbell County Man Believes In Second Life For Powder River Basin Coal Ash

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jennifer Kocher, County 17

Good news is hard to come by today with regard to Wyoming’s lagging energy industry, particularly in the Powder River Basin, but at least one man is optimistic about the county’s future.

Where there’s a bust, Phil Christopherson believes, there’s a boom to follow, which may come as early as 2022.

His glass half-full mentality stems in part from his work as CEO of Energy Capital Economic Development (ECED), where the crux of his job is to attract new businesses to Campbell County, and ignite and revive local industries.

He looks to the long-term with regard to driving economic diversity to keep the economy robust, regardless of downturns in energy.

Generally speaking, he noted, the county has a lot going for it. Lots of space, for one, as well as easy access to Interstate 90, rail and commercial jet transportation, business-friendly regulations and taxes as well as top-notch recreation and business incubator facilities.

He sees several promising opportunities on the horizon, including a pretty hefty investment on behalf of the U.S. Department of Energy (DOE), the University of Wyoming’s School of Energy Resources (SER), ECED as well as funding from both city and county governments among other developments currently in the works.

Moreover, as a Wyoming native, Christopherson wholeheartedly believes in the tenacity, grit and resourcefulness of its people, particularly those in Campbell County.

He points to its long history as the nation’s leading energy provider and reveres it as home to several world-class companies like Liebherr, Cyclone Drilling and L&H Industrial. Yes, times are a little hard, he admitted, but there are equally lucrative days to follow.

The future site of Atlas Carbon near the new Highway 59 buildout (left).
The future site of WyIC, near HWY 59 buildout.

Sitting at a table in his corner office of the Energy Capital Building in south Gillette last Tuesday, Christopherson slid a press release across the laminated surface, detailing news about a new pilot-scale production facility currently in the design phase at Energy Capital Economic Development’s Wyoming Innovation Center (WyIC).

It’s scheduled to open next year as part of the exploratory project, where scientists will attempt to extract rare earth elements from coal ash.

The $1.62 million project is funded through a partnership between the city, county, university and federal agencies including a federal grant from the Department of Energy (DOE) Technology Commercialization Fund earmarked for helping to develop promising energy technologies.

The three-year project entails a partnership between the National Energy Technology Laboratory (NETL) in conjunction with UW’s SER and will entail identifying and extracting rare earth elements and other critical metals from feedstocks in the PRB to test efficacies and economic value.

Currently, Christopherson’s ECED team is in the process of finalizing the designs for the facility, which they hope to have nailed down in August or early September.

“This project is an important step forward in diversifying and expanding Wyoming’s economy through value-added coal projects,” he said.

The project has already garnered the sign-off from Gillette Mayor Louise Carter-King, who touted both the partnership as well as the potential for the project.

“We always knew that this was the perfect site, and it is gratifying to know that others recognize the potential of the Powder River Basin to assist our nation,” Carter-King said in an ECED release announcing the project.

Quoting studies that have shown the PRB coal has had high extractable REE content compared to other coal ash sources in other parts of the country, Christopherson also touted the high volume of available coal ash stocks with up to 270 to 690 tons produced by a single power station per day.

“This project is an important step forward in diversifying and expanding Wyoming’s economy through value-added coal projects,” he said. “We are proud to host the NETL rare earth elements project at our WyIC facility.”

Securing energy independence

Rare earth elements (REEs) are a part of a group of 17 metal elements that occur naturally and are typically found in varying proportions in the same ore deposits, according to the Wyoming State Geological Survey (WSGS), and are used in a variety of products from nuclear reactors, cell phones, magnets and camera lenses among several other products. They’re also key to renewable technologies such as wind turbines and electric cars.

For the past two decades, China has dominated the REEs market, accounting for about 95 – 97% of the world’s supply.

Currently, the United States is wholly dependent on imports for 21 of these critical materials, according to the U.S. Geological Survey (USGS), and 50% dependent on imports for an additional 28 more.

In recent days, as the Trump Administration ratchets up tensions with China surrounding trade and national security issues, including closing down the Chinese Embassy in Houston over accusations that the communist nation is pirating U.S. intellectual property and stealing research and industry secrets, many in government like Wyoming Senators John Barrasso and Mike Enzi see the country’s critical minerals dependency as a matter of national security as well as an opportunity to revive the fledgling coal sector.

In May, both senators sent letters to the secretaries of defense and the interior asking for them to invest in national efforts to build our own REE stockpile. Last week, Sen. Barrasso further sent a letter to the DOE, urging the agency to set up a satellite office in Wyoming to build on efforts to bolster statewide energy research, development and commercialization.

Given the country’s and world’s reliance on these REEs, demand for them only continues to rise. The global rare earth market is estimated to grow in value from $8.1 billion in 2018 to more than $14.4 billion by 2025, according to Zion Market Research, a company specializing in cutting-edge informative reports.

“Right now,” Christopherson said, “we’re relying on China for our Rare Earth Elements. This project is an important step forward in the United States developing our own sources of REE, while diversifying and expanding Wyoming’s economy through value-added coal projects.”

Many in the county and state are interested in tapping into PRB coal ash as the next panacea.

Regaining ground

At one point, the United States was a leader in REEs. Between the 1960s and 80s, the country had the largest market share, mostly mined at Molycorp’s Mountain Pass Mine in California, according to a 2017 DOE report. The open-pit REE mine of the Mojave declared bankruptcy in 2015. In Wyoming, Bear Lodge outside of Upton, had held promise in past years but fell flat under poor market conditions and also closed in 2015.

Meanwhile, China, which has the world’s largest known REE deposit, the Bayan Obo deposit, continues to dominate the market after beginning REE production in the 1980s, per the report.

Currently, the DOE is hoping to find new pockets of minerals with its sights set on two predominant coal-producing areas of the country – the West and Appalachia – where DOE and NETL assessments estimate a potential REE reserve of 6 million metric tons (MT) of potentially recoverable minerals from coal and coal byproducts in Montana, Wyoming, Colorado, Utah, New Mexico and Arizona with another estimated 4.9 MT from four eastern states, including Pennsylvania, West Virginia, Kentucky and Virginia.

In Campbell County, the three-year joint project between NETL and UW’s SER will focus on extracting REEs from coal ash from nearby utility companies.

Scott Quillinan, director of research at the UW’s SER, is also optimistic about the potential of the DOE/NETL project in the PRB.

PRB coal collected from the University of Wyoming coring program for REE analysis.
PRB coal collected from the University of Wyoming coring program for REE analysis. (H/t UW SER)

The first year-and-a-half will consist of onsite lab work between researchers at UW and NETL, who will collaborate from their Pittsburgh lab to fine tune extraction technologies. Once the WyIC facility is up and running, Quillinan said, the entities will join forces in-house for the remaining 18 months.

In terms of REEs, researchers at SER are particularly excited about the high concentrations of two critical, middle and heavy elements, Dysposium and Neodymium, in the PRB’s sub-bituminous coal.

“Neodymium in particular is a very important element,” Davin Bagdonas, research scientist at SER’s Center for Economic Geology Research and SER’s principal investigator on the REE pilot project, said.

“PRB coal/fly ash is a great potential resource for it in high volume,” he said.

The light REE, Neodymium, is used to make hard drives in laptop computers, headphones and hybrid engines among other uses. Dysposium, which is a heavy rare earth, is used primarily to make permanent magnets and hybrid engines.

The area also has high concentrations of Praseodymium, a critical mineral used for magnets and hybrid engines, Bagdonas added, as well as Cesium, a soft, silvery, extremely reactive metal.

Though the PRB is rich in these elements, Quillinan noted, the tricky part is extracting them both safely and economically, which entails digesting the coal with acid to differentiate the elements from the coal ash.

A second snag is that currently further processing of the minerals once extracted generally occurs overseas. This is also true of manufacturing. Most of the products that require rare earth elements in the process are made elsewhere, he said.

Regardless, Quillinan remains optimistic about the quality of the feedstocks as well as the technology, which if proved economically viable, may spur private investment into building an extraction and processing facility in Wyoming or elsewhere where the US might regain its prominent spot as the leader of REEs.

“It looks promising,” he said, noting the volume of available coal ash at the ready as well as the high calcium content, which makes coal ash more easily to digest with acid.

That said, the project is for naught if it’s not economically feasible. The techno-economics will be evaluated per DOE-approved economic models as part of the project.

“We know we have high-potential feedstocks and promising technology and know the demand is there,” Quillinan said, “but we have to figure out if it makes sense economically. If it doesn’t pencil, private investment will never come.”

However, he noted, if the United States continues to trend toward renewable energy sources, these rare earth minerals are imperative, and he’d like to see Wyoming take the lead.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Converse County Oil, Gas Project One Step Closer To Approval

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

A proposed major oil and gas development project in Converse County moved one step closer to federal approval with a release of the final environmental impact statement on the project.

The U.S. Bureau of Land Management on Thursday, in its final impact statement on the project that could see more than 5,000 new wells drilled in the next 10 years, continued to select the full development option as its preferred alternative for the project.

The release of the statement triggered a 30-day protest period, after which the BLM will issue a record of decision on the project.

Five energy companies have proposed drilling on about 1.5 million acres of land in Converse County: Occidental Petroleum, Chesapeake Energy Corp., Devon Energy, EOG Resources Inc. and Northwoods Energy. Plans call for about 500 wells to be drilled each year over 10-years.

Other options for the project considered by the BLM included allowing no development and allowing the development of all the new wells, but limiting the number of well pads that could be built in the area.

Gov. Mark Gordon, in a prepared statement, said he welcomed the release of the report and noted Wyoming officials had worked extensively with federal officials to make sure the development followed certain measures to protect wildlife and the environment in the area.

“The State of Wyoming worked long and hard to weigh in on issues such as year-round drilling that would still provide appropriate measures to protect wildlife, including raptors as well as Greater sage-grouse,” he said.

He noted the project will involve the use of new drilling technologies that will reduce surface disturbances.

“It reflects what can be accomplished when ingenuity, science, technology and common sense management policies are used to promote energy development and preserve our wildlife,” he said.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Gordon Pleased That Ruling Allows Flaring Litigation to Resume

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Gov. Mark Gordon said Tuesday he is pleased about a federal district court ruling that will soon allow the state to resume its legal challenge of a rule that would force energy companies to capture and use natural gas rather than vent or flare it.

Last week, a California federal district court set aside the U.S. Bureau of Land Management’s current rule governing venting and flaring of natural gas on public lands, allowing the Obama-era rule to be reimposed in 90 days. As a result, a federal court in Cheyenne lifted a stay on legal action the state of Wyoming and other states had taken against rules on flaring and venting adopted by the Obama Administration.

According to the U.S. Environmental Protection Agency, flaring is the controlled burning of natural gas and is a common practice in oil and gas exploration, production and processing operations. Flares generate heat and noise. Venting is the direct release of natural gas into the atmosphere.

The Obama Administration rule required oil and gas companies operating on public lands to capture more of that natural gas and use to to produce energy. Energy producers argued that it was cheaper to flare or vent the gas than to process it for energy production.

The Trump Administration worked to nullify those rules with its own, but the California district court rejected those rules.

“In a thorough, but thoroughly incorrect ruling, the judge rejected the Trump Administration’s commonsense approach to the management of waste gas,” Gordon said in a news release. “The Trump Administration recognized and respected Wyoming’s longstanding and effective regulations, while the Obama administration sought to impose a one-size-fits-all mandate that imposes tremendous costs on oil and gas producers to save small amounts of natural gas.”

Before the Trump Administration rules took effect, Wyoming and other energy states were in the process of challenging the validity of the Obama-era rule in federal court in Wyoming. Those proceedings were paused when the Trump administration replaced the rule.

The Wyoming court lifted a stay on the case on Tuesday, allowing Wyoming, Montana, North Dakota and Texas to proceed with their challenge to the Obama rule before it goes into effect and causes substantial harm.

“Wyoming will be reviewing its options to appeal the California decision, but in the meantime we will do all we can to avoid the harm that the Obama-era rule will cause in this particularly difficult time for Wyoming’s energy industry,” Governor Gordon said.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Laramie Protest Over Wind Energy Regulations Slated For Wednesday Morning

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

A group of Albany County residents seeking a change to the county’s rules for wind energy projects plans to hold a peaceful protest rally at the county courthouse at 8 a.m. Wednesday.

The protest is set to take place one hour before a special Albany County Planning Commission meeting where members will discuss the need to change current county regulations.

The rally is a response to plans to build two industrial wind plants in the county. Organizer Paul Montoya described the development of such projects as an “onslaught…that have engulfed neighboring counties such as Laramie County and Carbon County.”

Montoya told Cowboy State Daily that the Roundhouse project outside of Cheyenne was a major factor behind the rally, noting that it’s an eyesore that can be seen from as far away as Albany County. Construction on the project, which will consist of up to 120 turbines, began in 2019 and is expected to be completed at the end of this year.

A project proposed for Albany County that is being opposed by Montoya and others is the Rail Tie Wind Project, which is to be built around Highway 287 near Tie Siding.

Montoya is quick to clarify that he’s not against wind projects, but is more frustrated with the current regulations in place and the three county commissioners’ “lip-service” regarding the raised concerns.

“We just want some updated regulations and mapping of where these plants should go,” Montoya said. “We’re really wanting them to look at what Sweetwater County has done regarding its regulations for wind and solar projects, because they’ve done a fantastic job. We don’t want to be like Teton County and not allow any sort of project like this, but we want to ensure it doesn’t impact the quality of life of the people of this community.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Black Hills Energy Gives Back to Wyoming Communities

in Energy/News

Black Hills Energy is much more than an energy company. The company believes in investing in local economies, helping families in need, and supporting the communities employees work and live in. 

In 2019, the direct economic impact of Black Hills Energy in Wyoming totaled $144 million. This included compensation for employees, charitable giving, payments to suppliers, and property, sales and use taxes paid to communities.

As part of this, charitable impact totaled $345 thousand dollars, including financial support for nonprofits, economic development, low-income energy assistance, investments in trees, and support for United Ways – all making a positive impact in the hometowns of employees and customers in Wyoming.

Giving back is more than just writing checks. Black Hills Energy also supported communities in 2019 in other ways, including:

  • More than 2,400 customers participated in energy efficiency programs; saving energy costs.
  • More than 65 families received energy assistance funds as part of the Black Hills Cares program.
  • More than 50 community organizations benefitted from volunteer time shared by 40 employees.
  • Over 25 first responders learned emergency response techniques around natural gas and electrical lines.

“At Black Hills Energy we believe strong communities help make for strong companies. If our communities are not strong, we won’t be either,” said Linn Evans, president and chief executive officer at Black Hills Energy. “Our hearts go out to all those impacted by COVID-19, whether physically or economically. In addition to our community impact initiatives, as the pandemic became a reality in our hometowns this spring, we partnered with our communities to help fill basic needs by designating $375,000 for immediate relief efforts. And, we stand ready to partner with our communities as they emerge from the impact of coronavirus.”

“Seeing our company and its employees give back to so many communities and organizations, exhibits the Black Hills Energy’s culture at its finest, and it is something I am glad to represent every day,” said Mark Stege, Wyoming’s vice president of operations.

To learn more about all the ways Black Hills Energy is supporting communities please visit: and click on the Community section. 

About Black Hills Energy

Black Hills Corp. (NYSE: BKH) is a customer focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.28 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at and

Jonah Energy VP: Despite Hurdles, Natural Gas Industry Can Stabilize and Grow

in Energy/News

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ike Fredregill, Cowboy State Daily

A cleaner energy product could provide the ladder needed by Wyoming’s natural gas industry to climb out of a hole dug by years of low prices, high regulatory fees, and finally, the pandemic, an industry leader said.

“The challenges for natural gas producers have been growing for a number of years,” said Paul Ulrich, vice president of government and regulatory affairs at Jonah Energy LLC. “And, what we are facing today is clearly a perfect storm.”

With only two natural gas rigs operating in the state, Ulrich said Wyoming hasn’t seen natural gas rig counts this low since the 1940s.

Before the coronavirus pandemic, the U.S. natural gas market was flooded with cheap product. Oil producers in the Permian Basin, an oil field covering parts of Texas and New Mexico, drew up an abundance of natural gas as a byproduct of oil drilling.

“There was a glut of natural gas on the market,” Ulrich explained. “The price differential (to extract natural gas in Wyoming) puts us at a disadvantage in the marketplace.”

In Wyoming, natural gas producers drill for gas and pull up a small portion of oil as a byproduct, Ulrich explained.

Because Wyoming’s producers focus on natural gas production, their operating costs are higher, making it difficult to compete against oil producers, he said.

But when oil production slowed to a crawl in the U.S. as a result of a price war between Russia and the Organization of Petroleum Exporting Countries (OPEC) earlier this year, Ulrich said an opportunity opened for natural gas producers.

“I strongly believe that if we as a state collectively make smart and major decisions that remove financial and regulatory hurdles, we have the opportunity to not only stabilize, but grow the industry back to pre-2019 production rates,” he said.  

A key factor in regrowing Wyoming’s natural gas sector would be the willingness of producers to adapt to cleaner energy demands.

“The market is extremely interested in consuming more responsibly produced energy,” Ulrich said.

Taking part in a program designed to encourage the responsible production of natural gas, Ulrich said Jonah Energy qualified its product as low emissions and also reduced surface disturbances by working with state agencies and researchers on best practices.

The company earned a gold TrustWell rating, a score developed by the Independent Energy Standards Inc. to rank natural gas producers based on responsibility metrics across a range of risks and impacts. Jonah is also the first producer in the nation to receive TrustWell’s Verified Attribute for Low-Methane.

“From our standpoint, the whims of the market are one thing,” Ulrich said. “But if we can provide a cleaner source of natural gas, a more responsibly produced natural gas, we believe there’s a place in the market for it.” 

Jonah is exploring options for opening another rig in July, which could bring the state’s count up to three, he added.

As the Wyoming Energy Authority’s vice chairman, Ulrich said he was working with the state to help position Wyoming once again as a competitive market for natural gas producers.

“The authority is envisioned as a one-stop shop for developers, who want more information and help finding opportunities in Wyoming,” he explained. “Natural gas is a tremendous feed stock for a myriad of manufacturing processes, and could be a tremendous opportunity to diversify our economy.”

Both the Legislature and Governor Mark Gordon’s office have been supportive of the industry, he said, but the state has some work to do before natural gas can return to its former glory.

“Our best path forward — as a state and energy producers — is working together toward a shared goal,” Ulrich said. “The most important thing we can do as a state is remove any and all barriers to capital investment as well encourage and incentivize Wyoming operators, whether drilling for natural gas or oil.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Wyoming Oil Production Decline ‘Catastrophic,’ Recovery Unlikely

in Coronavirus/Energy/News
Silhouette of a Pump Jack

By Ike Fredregill, Cowboy State Daily

EDITOR’S NOTE: This is the second of a two part series detailing the struggles of Wyoming’s energy sector in a post-pandemic economy.

Before COVID-19, Wyoming officials were hopeful the potential for increased oil demand could offset declining natural gas and coal revenues, but a foreign price war dashed those hopes this spring, a University of Wyoming economist said. 

“In April, there was a price war between the Organization of Petroleum Exporting Countries (OPEC) and Russia,” said Rob Godby, UW’s Energy Economics and Public Policies Center director. “Prices fell through the floor.”

Oil prices plummeted to less than zero — at a negative $37.63 per barrel — near the end of April. As of Thursday, the price per barrel rebounded to a positive figure of $35.60 per barrel, according to U.S. oil benchmark West Texas Intermediate, but prices are again trending downward as markets anticipate a second wave of COVID-19 cases. 

“Worldwide demand for oil collapsed by about 30 percent,” Godby said. 

Supply, demand

Before the pandemic, the world produced about 100 million barrels of oil a day, but international demand only called for about 70 million, he explained.

“It got to the point there was too much oil coming out of the ground and people didn’t have a place to put it,” Godby said. “They were paying people to take it off their hands.”

The U.S. was the world’s largest oil producer before COVID-19, but American producers struggle to make profits when the price per barrel is below $40. Diminishing income forced many producers in Wyoming and throughout the U.S. to cap wells.

“Capping wells is drastic, because it can damage (oil) reservoirs,” Godby said.

When producers re-start capped wells, the damage done to reservoirs can reduce the wells’ output.

“It’s not great,” Godby said. “But, it’s all you can do to stop the bleeding.”

Prior to 2020, Wyoming’s oil production never fell by more than 10% in a single year.

“We have very little data, but we expect oil production to decline in Wyoming in our baseline forecast by 45%,” Godby said, explaining the prediction was presented to the state in the latest Consensus Revenue Estimating Group report. “This is catastrophic.”

During the next five years, according to the report, Wyoming’s oil production rates are not expected to return to the levels seen in 2019, Godby added.

Will energy recover?

Given the unprecedented nature of COVID-19’s impact on the global economy, predicting post-pandemic energy demands is a lot of guesswork, Godby said.

But, few believe Wyoming’s energy sector will return to pre-pandemic production rates — which were on the decline — any time soon, he added.

“Some of the most rosy projections predict oil could come back, but the problem is the U.S. is a high-cost producer,” Godby said. “Where we think oil will come back is in newer fields, not in places like Wyoming.”

Most experts agree coal production will continue to decline, but determining the rate of decline is still up for debate.

Natural gas is poised for a rebound as oil production slows, decreasing the surplus gas flooding the market, but Godby said experts question whether Wyoming would be considered a prime location for new wells in the future.

“We don’t expect the increases in natural gas through 2024 to bring us back to where we were in 2019,” he said. “In the short term, there may be a price spike, drawing renewed interest. But it’s possible oil and gas development will occur elsewhere outside of Wyoming.”

Go to Top