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Rocky Mountain Power Asks for Residential Rate Increase

in Energy/News
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Rocky Mountain Power is seeking state approval for a rate increase that would boost residential energy prices by 4.7 percent while providing a 0.8 percent rate cut for its industrial customers, it announced Tuesday.

The company, Wyoming’s largest energy provider, said in a news release it will use much of the extra income from its first rate increase in five years to finance its renewable energy initiatives.

“That’s the direction our customers are asking for,” spokesman Spencer Hall said in an interview. “As a company, we’ve made it clear there are huge benefits to providing power from no-fuel-cost sources.”

If approved by the Wyoming Public Service Commission, the rate increase would take effect on Jan. 1, 2021.

Under the proposal, the costs for residential users would increase by an average of $3.69 per month, Rocky Mountain Power’s news release said.

The cost for commercial users would go up by 4.1 percent, while rates for industrial users would drop by 0.8 percent.

The decline for industrial users is based on the fact that power consumption by such users is easy to predict, Hall said.

“Supplying always-on industrial users is one thing, we know pretty much what the usage will be,” Hall said. “Commercial customers come in, turn on their lights, do work and go home at night. It’s more volatile.”

The added revenue from the rate increase will cover implementation of the company’s “Vision 2020” renewable energy initiative, as well as the refurbishment of wind turbines at the company’s Foote Creek Wind Farm near Arlington. Other items to be paid for with the increase will include the conversion of a coal-fired energy plant near Kemmerer to burn natural gas and the installation of catalytic reduction equipment on some power generating units.

The changes will help Wyoming stay in the forefront of the energy industry, Hall said.

“Its a great opportunity for Wyoming as the industry changes and moves away from coal,” he said. “We want Wyomign to continue to be the center of the energy exporting world.”

The company’s news release noted Rocky Mountain Power has invested in its Wyoming operations for the last five years without asking for a rate increase. It also said Rocky Mountain Power’s average electric rate is 10 percent lower than the average price in Wyoming and 34 percent lower than the national average.

Rocky Mountain Power provides electric service to more than 146,000 customers in the state. It is part of PacifiCorp, which serves more than 1.9 million customers in six states.

Gordon Slams FTC Attempt To Block Joint Coal Venture

in Energy/News
Mark Gordon file photo
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An attempt by a federal agency to block a joint venture between two major coal companies was criticized by Gov. Mark Gordon on Wednesday as “wrongheaded.”

Gordon’s comments came in response to the Federal Trade Commission’s decision to file an administrative complaint challenging the joint venture between Peabody Energy Corp. and Arch Coal.

“I believe this complaint by the Federal Trade Commission is a wrongheaded attempt to drive a nail into an industry which is struggling to adapt to a rapidly changing marketplace,” he said. “It could also result in significant impacts to the workforce of the North Antelope Rochelle and Black Thunder coal mines.”

The two companies announced last summer they would merge their assets in Wyoming’s Powder River Basin and in Colorado. The move was seen as a way to allow both companies to better compete in the ailing coal industry.

The FTC, in its complaint, alleges the transaction will eliminate competition between the two companies and lead to higher coal prices for power utilities and ultimately, energy consumers.

But Gordon said the complaint does not take into account the competitive forces already at work in the energy sector.

“Today’s energy marketplace is broad and includes wind, solar, natural gas, hydroelectric and geothermal, all of which have become more competitive since 2018,” he said. “The FTC appears to have ignored this fact and seems intent on extending the uncertainty facing coal companies in the Powder River Basin. I don’t believe the broader energy marketplace will benefit from a challenge to this merger.”

Natural Gas Faces Difficulties as Market is Flooded with Cheap Product

in Energy/News
Jonah Field
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By Ike Fredregill, Cowboy State Daily

A victim of its own success, Wyoming’s natural gas industry has faced plummeting prices in recent years, leaving only one operator with active rigs in the state, the Petroleum Association of Wyoming (PAW) reported.

“There are 23 active rigs in the state, and of those only two are natural gas,” said PAW Communications Director Ryan McConnaughey. “There are a lot factors impacting natural gas, but a big one is sustained low prices.”

More than a decade ago, natural gas experienced a surge in popularity with the advent of hydraulic fracturing, or fracking, that boosted production, but a University of Wyoming researcher said the mining process was almost too successful.

“In the last decade, we’ve become so good at getting oil and gas out of the ground through unconventional methods — fracking and horizontal drilling,” said Rob Godby, the director for UW’s Energy Economics and Public Policies Center and an associate professor for the College of Business. “Prices have fallen through the floor. There’s just too much natural gas on the market.”

In 2008, national natural gas prices were around $7 per 1,000 cubic feet (MCF), Godby said. The price as of Wednesday was $1.77 per MCF.

“It’s only gone one direction, which is down,” he said. “The other thing that’s scary about that price is we’re in the middle of winter, and if you’re going to have a coldest month, it’s February.” 

As energy companies switch over to renewable power sources for electricity generation, natural gas and coal have stepped into backup roles to ensure the lights stay on during major winter storms. Previously, natural gas prices spiked to around $150 per MCF during these events, but Godby said those instances are becoming less frequent.

“In real terms, taking inflation into account, we’re essentially at the lowest point in gas sales history,” he said. “Operators are having a very hard time making money with natural gas.”

Permian Basin 

The hydraulic fracturing process is not selective, so when oil operators frack, they often capture natural gas as a free and marketable byproduct, Godby explained.

“People often think of oil and gas drilling as a jelly donut, and operators are trying to get that jelly out,” he said, crediting the analogy to Mark Watson, the Wyoming Oil and Gas Conservation Commission director. “But, it’s really like Tiramisu.”

Operators horizontally drill through layers of rock containing oil and gas, then pressurize the hole with water and other additives, which fractures the rock and releases both oil and gas.

“In the last year or so, the U.S. just became the largest producer of oil, and all that oil growth brings with it a lot of natural gas,” Godby said. “And the most prolific field where this is happening is in the Permian Basin on the eastern half of New Mexico and Western side of Texas.”

Natural gas producers in Wyoming are typically producing only natural gas while competing with oil producers, whose get their natural gas essentially free.

Further complicating the situation, McConnaughey said Wyoming’s tax on natural gas is higher than New Mexico’s.

“Wyoming’s tax rate on energy production is not competitive with our peers,” he said. “It’s typically about 4 percent more than other states, and New Mexico takes 4.5 percent less than Wyoming does.”

Coronavirus

With less extraction comes less revenue for the state, a major challenge when considering mineral revenues paid for more than 50 percent of the state’s budget in 2017, the Wyoming Taxpayer’s Association reported.

Coal’s decline is well documented in Wyoming, but Godby said natural gas is not far behind.

Since 2015, Wyoming’s projected natural gas production declined by 18 percent, and natural gas severance tax payments have dropped 19 percent, UW documents state.

“Our economy has gone from riding a tricycle with coal, natural gas and oil to a bicycle with natural gas and oil, and now,” Godby said, “we’re down to riding a unicycle with oil, which is the most volatile of the three.”

Oil production is projected to increase 14 percent from levels in 2015, bringing the state a 9 percent increase in oil severance tax, but that income might not be reliable, he said.

“Oil production could rise and offset some of the declines,” Godby said. “The problem is oil is still the most difficult commodity to forecast for, and as the transportation industry moves away from fossil fuels in the future, it will become even more volatile.”

China is one of the two largest oil consumers in the world, and the coronavirus epidemic has “slowed their economy to a crawl,” decreasing their energy demand, Godby said.

“This is why gas prices at the pump are so low,” he explained. “Oil prices right now are really low, because demand has dropped.”

Industry Leader: Wyoming Uranium Industry on ‘Its Death Bed’

in Energy/News
Uranium
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By Ike Fredregill, Cowboy State Daily

A potential addition to President Donald Trump’s budget for the purchase of domestic uranium might not be enough to save Wyoming’s uranium mining operations, an industry leader said.

“The uranium market has been extremely depressed for a number of years,” said John Cash, Ur-Energy’s vice president of regulatory affairs. “So much so that is not profitable to sell into that market at this point.”

After speaking with White House adviser Larry Kudlow, Gov. Mark Gordon recently announced the president is slated to add $150 million to his budget for replenishing the nation’s military supply of uranium.

But Cash said even if the funds were approved, new uranium enrichment facilities would need to be built, which could take up to 10 years — precious time the industry might not have.

“The uranium industry is on its death bed,” said Cash, whose company operates a uranium mine in south-central Wyoming. “We’re already shutting down most everything. We can’t wait any longer.”

Domestic market

Wyoming leads the nation in uranium production with about 665,000 pounds produced in 2018, which was about 78 percent of America’s production, the Wyoming Mining Association (WMA) reported.

Unfortunately, Cash said that production was down to about 200,000 pounds in 2019.

“At one time, the U.S. produced 30 million pounds of uranium a year,” he said.

RELATED: Wyoming radio personality Glenn Woods explores former uranium town Jeffrey City

Humans have used uranium for centuries in products such as paint pigments, but today, most uranium is used to generate electricity at nuclear power plants. 

Militaries use uranium to create high-density, armor-piercing projectiles, armor plating for tanks and to power naval vessels. 

On the civilian side, uranium radioisotopes are used in smoke detectors and ballasts for yachts and airplanes, according to the WMA. 

The U.S. is home to 98 nuclear power reactors and houses the world’s largest fleet of nuclear-powered naval vessels, but Cash said the nation doesn’t produce enough uranium to power even one nuclear reactor for more than a few months.

“America’s nuclear reactors consume about 50 million pounds of uranium each year,” he said. “Each one of those requires about 500,000 pounds of uranium a year to operate.”

Flooding the market

Uranium is most commonly sold as the compound U3O8 and fetches about $25 a pound on the global market, WMA Executive Director Travis Deti said. 

“The problem is a pound costs about $35 to $45 to produce here in Wyoming,” Deti explained. “Countries like Russia, China and Kazakhstan have basically flooded the market with cheap uranium, because they don’t have the same regulations American companies do, and their operations are heavily subsidized by their governments. They’ve effectively driven the U.S. out of the domestic market.”

Further complicating the issue is the fact the uranium potentially purchased for military use by the U.S. if Trump’s budget addition is funded would need to be converted and enriched. 

“It all starts off the same when we mine it and process it into yellowcake, or U3O8,” Cash said. “From there it has to be converted into UF6 uranium hexaflouride. The U.S. has only one conversion facility in Metropolis, Illinois. And that facility shut down in 2017.”

After conversion, the uranium is enriched to increase its concentration of the isotope uranium-235, needed to sustain a chain reaction. 

The natural concentration of uranium-235 in ore is usually less than 1 percent.

For commercial nuclear reactors, the uranium-235 content needs to be about 4.5 percent, for military applications, it needs to be above 90 percent.

“We have no domestic enrichment facilities anymore,” Cash said. “At this point, we have no physical structure (in the U.S.) to enrich uranium for our military.”

One uranium enrichment facility does exist in New Mexico, but it is owned by foreign governments, which are legally prohibited from enriching uranium for U.S. military uses, Cash explained.

“The story is there is effectively no uranium mining in the U.S. — the numbers in 2020 will be near zero — our one conversion plant is shut down and we have no enrichment facilities at all,” he said. “Our ability to supply our military or nuclear power plant fleet domestically is gone.” 

Congressional efforts

In 2018, Ur-Energy and Energy Fuels, another uranium producer, asked the U.S. Commerce Department to investigate the effects of foreign-owned firms’ uranium imports on America’s national security.

In support of the request, U.S. Sen. John Barrasso led congressional efforts to press for the investigation, a spokesman for a Senate committee said in an email.

When the Commerce Department determined the imports did pose a threat to national security, President Trump created the Nuclear Fuel Working Group to look into uranium producers and the nuclear energy industry.

Serving as chairman of the U.S. Senate Environment and Public Works (EPW) Committee, Barrasso was among several Republican senators who sent a letter to Kudlow calling for the Nuclear Fuel Working Group to help America’s uranium producers, EPW Communications Director Mike Danylak wrote.

“Barrasso has been personally engaged with the White House throughout the Nuclear Fuel Working Group’s process to highlight the important role uranium mining plays in Wyoming,” Danylak said. “Maintaining a vibrant American uranium industry is a critical economic issue in Wyoming and a vital national and energy security issue for our entire country.”

With help from Barrasso and the Trump administration, uranium could make a comeback, but Cash said the industry will need time.

“At $150 million a year, that could support about 2.5 million pounds of uranium production annually,” he said. “It’s likely Wyoming mines would get a pretty good percentage of that.”

But with no conversion or enrichment facilities available, the U.S. would need to purchase and store the uranium.

“I think what would happen is the conversion facility would be incentivized to open back up and convert the uranium, so it could be stored,” Cash speculated. “And it would need to be stored until an enrichment facility could be built.”

Without the revenue from annual purchases, Cash said the U.S. uranium industry would collapse before an enrichment facility could be built. 

Deti said the president’s budget addition could revive Wyoming’s uranium operations, but nothing is set in stone.

“We haven’t passed a budget in this country for years,” he explained. “Where the rubber hits the road is whether Congress authorizes and appropriates the money. It’s a good step in the right direction, but we’ll have to see if Congress follows up.”

Energy Development Part of Complex Problem in Wyo Mule Deer Decline

in Energy/News/wildlife
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By Ike Fredregill, Cowboy State Daily

Research indicates energy development played a role in declining mule deer populations, but it’s only one part of a complex problem, a University of Wyoming researcher said.

“When mule deer are present on winter range, we tend to see movement away from energy development,” said Kevin Monteith, a UW assistant professor of natural resource science. “And, when they are near development they tend to be more vigilant and less interested in feeding. I wouldn’t say (energy developments) are the primary factor of declining populations, but with certainty, I can say they are contributing factors.”

In a draft plan for mitigating Chronic Wasting Disease, Wyoming Game and Fish reported the state’s mule deer populations are down about 40 percent since the 1970’s, and for years, researchers across Wyoming have tried to answer the question of why.

Working through the Wyoming Cooperative Fish and Wildlife Research Unit, Monteith’s team researches how large ungulates such as deer, moose and pronghorn interact with their habitat. 

Using data collected since the 1990s, Monteith and fellow researchers were able to determine deer traveling from their winter range to their summer range ate less than usual when traveling near oil and gas well pads. 

“We’ve known for sometime that deer tended to avoid energy development on winter range,” Monteith said. “But on the surface, there wasn’t a great connection between that behavior and the population declines.”

From 2015 to 2017, Monteith gathered data on mule deer in the Upper Green River Basin with the intent of drilling down on the connection between habitat usage, energy development and population flux. 

The study did not yield a definitive connection, but rather expanded on the scientific community’s understanding of mule deer behavioral patterns near well pads. 

“We tend to see (the deer) are not making as complete use of food on land near energy development as they are in other places,” Monteith said. “Food is that ultimate building block. If we lose food on the landscape, we would expect a population decline to occur thereafter.” 

In response to his research, many people pointed out an abundance of deer traveling near developed areas.

“These results are not counter to those observations,” Monteith said. “Our results are not saying the animals we monitored were never next to a well pad. They absolutely were.” 

But after comparing all the places they lived throughout the winter, his team determined the deer didn’t eat as much when near to energy developments.

Gadget science

Much of Monteith’s work is made possible by advances in GPS technology since the turn of the century, said Hall Sawyer, a wildlife biologist who published research papers with Monteith in 2017 and 2019.

“There’s two tools that have certainly revolutionized the way in which we collect animal movement data,” Sawyer said.

The first is GPS tracking collars. 

Sawyer conducts research similar to Monteith’s, but for the private sector through Western Ecosystems Technology (WEST), Inc., based in Laramie.

To help with Monteith’s winter range studies, Sawyer shared data his company collected since the late ’90s.

“GPS collars get better every year,” Sawyer said. “Before GPS, people used VHF collars. You’d have to go out with a big ol’ antenna and listen for an animal.”

The results were varied, and at times, inaccurate, he said.

“Fifteen years ago, we had collars that could collect a couple hundred locations and would last about six months,” Sawyer said. “Nowadays, we have collars that can collect locations every hour, 24 hours a day for several years at a time.”

The second significant advancement is the use of helicopters and net guns to capture animals prior to collaring.

“The challenging part is you have to put those collars on the animals,” Sawyer explained. “Before helicopter-net gunning, the techniques were really labor intensive and not very efficient.” 

With the help of these advancements, wildlife research entered a new era of understanding animal behavior.

“If you’re going to manage any wildlife population you need to understand when and why animals move,” Sawyer explained.

What’s next?


While neither Sawyer’s nor Monteith’s research determined energy development played a primary role in mule deer population declines, it will serve to educate the scientific community and help wildlife managers mitigate potential damage future developments could cause, Monteith said.

“The hope is this sort of research can help wildlife managers make more informed decisions,” he said, explaining managers have to sign off on development permits. “The unknowns and uncertainty can create tension between different groups.”

Speculation can slow or even halt the permit process, causing problems between the permitting authority and the applicant. With an in-depth analysis of cause and effect in hand, Monteith said he hopes his research can benefit everyone involved in the energy development process.

The field work on winter range may be complete, but the research continues, he said. Monteith is currently working to publish another paper related to his findings.

“Now that we understand the effects, the next step is to develop better strategies for habitat management,” he explained. 

Sawyer said the research conducted by WEST, UW and the Cooperative Fish and Wildlife Research Unit helped developers create a pipeline for liquid waste removal which reduced herd disturbance. And the studies showed directional drilling from a single well pad also mitigated some of the unproductive behaviors exhibited by mule deer near well pads.

“Directional drilling multiple wells from a single pad and liquid gathering systems are really good practices,” Sawyer said. “But while they help minimize disturbances, they do not eliminate them.”

Wyoming, Montana to Sue Over Coal Export Terminal

in Energy/News
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By Bob Geha, Cowboy State Daily

Wyoming and Montana will join forces to sue the state of Washington over its refusal to allow the construction of a coal export terminal, Gov. Mark Gordon announced Tuesday.

Gordon, during a news conference, said the two states are asking the U.S. Supreme Court to determine whether Washington’s decision to block construction of the Millennium Coal Export Terminal amounts to a violation of the U.S. Constitution.

Specifically, Wyoming and Montana officials feel Washington’s decision violated the Interstate Commerce clause, which gives only the federal government the authority to regulate the flow of goods between states, Gordon said.

“This case is about the right of states to conduct commerce,” Gordon said. “A question as old as our Constitution. In the case of Washington state’s actions, we believe Washington has offended that right and we seek to restore all the rights afforded to the states by our Constitution.

The coal port terminal, seen as a way to provide Wyoming coal with access to overseas markets, was rejected by Washington officials under terms of the Clean Water Act.

However, Gordon said Washington’s actions amount to an embargo coal from Montana and Wyoming mines.

“In denying the Millennium Bulk Coal Terminal, Washington officials used political considerations to block our ability to export one of our state’s greatest natural resources,” he said. “Using this same logic and tactics, Washington could block access to foreign markets for almost any product we or any other state might wish to export.”

Gordon also said Washington refused to let the company proposing the terminal address the state’s concerns.

“In effect, Washington’s actions indicated there was no way way, no how that Washington would work with the applicant,” he said. “The state just didn’t want the project to export commodities from the interior West and was willing to use any tactic it could find to make sure.”

Wyoming Coal Decline Could Continue, but Developments Might Help Industry’s Future

in Energy/News
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By Ike Fredregill, Cowboy State Daily

As coal markets continue to decline around the country, Wyoming’s energy industry could be in for a rough year, a University of Wyoming economist said.

“From 2018 to 2019, Wyoming coal production was down 10 percent, which is just a little shy of 31 million tons,” said Rob Godby, the University of Wyoming director of the Energy Economics and Public Policies Center. “I expect we’ll continue to see that trend in 2020.”

Wyoming produced about 270 million tons of coal in 2019, a low not seen since the 1970s, Godby said. 

“People will think the Blackjewel LLC closure was the sole reason, and it was a factor,” he explained. “But if you look at mines across the state, production was down throughout the year.” 

Power producers nationwide are turning to natural gas and renewable energy sources, and Godby said they likely won’t look back.

“All Wyoming coal is used pretty much for electricity generation, and coal use in electricity generation has halved,” he explained. “Coal is no longer competitive with natural gas and renewables. The cost of renewable electricity development has plummeted in the past decade, and natural gas is currently the cheapest fossil fuel.”

The short-term outlook may be bleak, but he said there are several developments underway in 2020 which could impact the industry’s long-term outlook.

Governor’s Initiatives

Gov. Mark Gordon said coal may be in decline, but it is still an essential ingredient in U.S. energy production and could one day become something more.

“The national conversation talks about climate change, talks about renewables, talks about new technology as if there is no bright future for coal,” Gordon told Cowboy State Daily. “We have a solution to all of those things. We have carbon capture sequestration. We have the opportunity to move to bio energy carbon capture technology. And we’ll continue to make coal a viable commodity in the future.”

There is a demand for coal the state can count on, so the decline is less of a cliff and more of a plateau, he said.

Gordon started the Power Wyoming planning effort in 2019 to forecast multiple scenarios for future energy markets and this year he is requesting $25 million from the legislature for the Energy Commercialization Program.

“In Wyoming, there are a lot of little pieces that are all part of solving the puzzle,” Gordon said. “My effort (with the program) is to demonstrate our commitment to this to attract investors and build confidence in the private sector.”

The money is being requested from the Strategic Investments and Projects Account, and could be applied to providing a focused approach to researching new coal-reliant technologies in collaboration with UW and counties supportive of alternate coal-usage research.

Carbon capture research occurring throughout the state could be instrumental to securing Wyoming’s future coal production, Gordon said. But he added it will take time to reap the benefits of those studies.

Looking at 2020 as a whole, Gordon said the situation is dire, but not without hope.

“I don’t think (the coal decline) is going to be decimating to Wyoming,” he said. “But, it’s going to be concerning.”

Sovereign immunity

One item high on Godby’s watch list is the unprecedented case of a coal company owned by a sovereign nation operating mines on U.S. soil.

The Navajo Transitional Energy Company (NTEC) was created by the Navajo Nation to operate mines within its boundaries.

But in 2019, the company acquired Cloud Peak Energy’s Cordero Rojo and Antelope mines in the Powder River Basin as well as mines in Montana.

At the Powder River Basin Resource Council, an organization dedicated to advocating for responsible energy development in the basin, staff attorney Shannon Anderson has kept a close eye on the NTEC situation.

“There’s a real concern and a practical problem for those of us in Wyoming with this company operating the mines and potentially owning them,” Anderson said. “If they maintain sovereign immunity, it may block legal redress on the part of citizens, neighbors, workers and government entities trying to collect taxes and royalties.”

While the Wyoming Department of Environmental Quality has yet to approve permits for the company, NTEC is operating the mines under Cloud Peak’s permits, which Anderson said is problematic as well.

“Cloud Peak is in bankruptcy right now, doesn’t have any assets and isn’t really a company that can be held responsible either,” she explained. “(NTEC) can kind of operate under Cloud Peak’s permits forever.” 

Despite being created by the Navajo Nation, the nation announced last year it will not back NTEC’s $400 million reclamation liability for the mines.

Too many mines

Despite experiencing a major decline in coal production, no Wyoming mines have closed, Godby said.

“If you look at the Powder River Basin, it’s like a Wile E. Coyote moment,” he said. “We’ve already run off the cliff, and we haven’t realized it yet. We’ve got the same number of mines chasing fewer and fewer customers, which is not a sustainable outcome.”

Two companies — Peabody Energy and Arch Coal — control more than 50 percent of the basin’s production. In 2019, the companies announced a joint venture to consolidate their Western operations.

Wyoming Coal: Are Export Facilities the Answer?

in Energy/News
2723

By Ike Fredregill, Cowboy State Daily

Wyoming coal producers have an eye on foreign markets as stateside coal demand decreases, but exporting coal comes with a new set of challenges, a Wyoming Mining Association (WMA) spokesperson said.

“When we look at the coal industry going forward in 2020 — it’s a simple fact — domestic markets are declining,” said WMA Executive Director Travis Deti. “However, Japan, Korea and Vietnam have a growing interest in buying our coal.”

Developing countries in the Asian Pacific are ramping up their coal-generated electricity operations and in some places like Japan, coal is replacing nuclear energy, he said. 

“Coal is still the cheapest alternative globally to bring your country into the 21st century,” Deti explained. “These countries want what we want, and Wyoming coal is desirable because they want to meet their emission goals, too.”

The problem is getting it to them. 

To export Wyoming coal, companies currently have to ship it north to the Port of Vancouver, British Columbia, Canada. The journey is long and costly, making the international exporting business unattractive to Wyoming companies.

“Right now, the amount of Wyoming coal being shipped is almost zero,” Deti said. “Maybe a few hundred thousand tons, but that’s next to nothing when you consider we’re shipping nearly 300 million tons annually inside the country.”

Closer to home, developers are working on expanding the Millennium Bulk Terminal in Longview, Washington, but the project is mired in court battles.

“What’s been happening over the last five to six years is you have these projects in the Pacific Northwest to expand existing ports,” Deti said. “About six years ago, there were five projects — going right through the heart of environmental movement. And one by one, these projects have fallen by the wayside because of protests.”

Of the five, Millennium Bulk is the only viable option left for Wyoming, he said.

A spokesperson for Gov. Mark Gordon said in an email the governor is exploring the option of filing a lawsuit against the state of Washington for its role in blocking the port expansion.

If the project moves forward, Deti said it could open new shipping lanes in phases.

“During the first phase, there is a potential for shipping 8 million to 9 million tons (annually) through Millennium Bulk,” he explained. “But the second phase could see as much about 30 million tons of coal being exported.” 

Clear eyes

In 2008, Wyoming shipped more than 460 million tons of coal to customers around North America. 

By 2018, that number was down around 300 million — a trend that continued into 2019 and contributed to the closures of the Belle Ayr and Eagle Butte mines following Blackjewel’s bankruptcy.

At the University of Wyoming, Rob Godby, the director for the UW’s Energy Economics and Public Policies Center and a college of business associate professor, keeps a mindful tally on the coal decline.

“Oftentimes, when people talk about the problem we have with the coal industry in Wyoming, I get the feeling they think it is we can’t get our coal to market,” Godby said. “I’m under the impression they think coal ports would be the answer to the current downturn.”

If approved and completely built out, Millennium Bulk’s full capacity would be about 10 percent of Wyoming’s current production value. 

Godby said at best, the terminal could slow the decline of coal production, but it wouldn’t reverse it.

“Revenues from exports are very volatile, volatile means uncertainty, and uncertainty is exactly what the coal companies don’t want right now,” he said.

Additionally, it is unlikely Wyoming will be able to capitalize on the terminal’s full capacity. While coal from the Powder River Basin burns cleaner than coal mined elsewhere, it has a lower energy value, which makes it harder to sell across the Pacific Ocean.

Coal mines in Montana, meanwhile, have access to ample high-energy coal and are closer to the proposed port, further reducing their shipping costs, Godby explained.

“I’m not trying to throw cold water on this opportunity, but let’s look at this with clear eyes,” he said. “It’s not a reason to not invest, but to hear some talk about it — it’s as if they think it will be the slam dunk coal needs right now, and I don’t believe it will.”

Follow the leader

Millennium Bulk might not save Wyoming coal, but it could pave the way for other port expansions, said Jason Beggar, the Wyoming Infrastructure Authority executive director.

“The key is adding additional capacity,” Beggar said. “There are a lot of projects waiting to see what happens with Millennium Bulk.”

The authority works independently under the umbrella of state government to facilitate infrastructure development beneficial to Wyoming industries such as coal. 

“The global market is so hungry for coal,” he said. “There’s an incredible demand in Japan.”

While Asia Pacific buyers get most of their coal from Indonesia and Australia, Beggar said there is a need for a stable supply.

“We’re at a generational transition with utilities in the U.S. — a lot of this stuff was built in the ’50s and ’60s, and it’s served its lifespan,” he explained. “But that’s not the case with Asia.”

Many new coal-generated power plants are being built across the Pacific Rim, and Beggar said they will likely be in operation for the next 40 to 50 years. 

Regardless of the market, Deti said for now, the best the coal industry can do is watch and wait. 

“We’re going to wait and see how some of these court cases play out,” he said. “Domestically, 2020 is going to be tough as those markets (in the U.S.) continue to decrease.”

Deti said he doesn’t believe expanding export terminals would prevent the coal decline, but it’s still worth fighting for.

“Are you ever going to make up that difference overseas — probably not,” Deti said. “But, every little bit helps.”

Year of the Pig sees Wyoming cut the fat, celebrate equality, go gaga for choo-choo trains

in Agriculture/Business/Energy/Jobs/News/Transparency/wildlife
Year of the Pig
2613

By Ike Fredregill, Cowboy State Daily

In 2019, Wyoming celebrated the 150th anniversary of women’s suffrage, welcomed back members of the Black 14 and bemoaned the worsening coal crisis.

Cowboy State Daily was there to cover it all.

Here’s some of our top stories from throughout the year.

Coal

Mineral extraction in Wyoming could enter a slump in the next four years, and the coal industry is slated to experience the worst of it, according to a report produced by Gov. Mark Gordon’s Power Wyoming initiative.

Some of the initiative’s scenarios predicted a recovery period in two years, but most, and the most likely, predicted a devastating decrease in both Wyoming’s total employment and population.

For the residents of coal country, those predictions could be life changing.

“The coal jobs have historically been the stable jobs,” said Alison Gee, a Gillette attorney. “Now, we’re shifting to an environment where we have to look to oil and gas to try and provide some of the stability for our families. And as you know, the oil and gas markets just aren’t that way. They’re very volatile because of the world economy.”

Although several hundred miners returned to work at the Eagle Butte and Belle Ayr coal mines after Eagle Specialty Materials assumed ownership from the bankrupt former owners, Blackjewel, the reverberations of 600 coal miners being laid off in one fell swoop earlier this year are still being felt statewide.

Corporate income tax

Despite dying in the Senate during the 2019 Legislative Session, a legislative committee is once again studying a proposal to impose an income tax on so-called “big box” stores.

The Legislature’s Joint Revenue Committee listened to testimony in September regarding a 7 percent corporate income tax on companies with more than 100 shareholders.

A similar proposal, House Bill No. 220, referred to as the National Retail Fairness Act, was not considered by the Senate Corporations, Elections and Political Subdivisions Committee before a deadline in February.

Both measures were raised as state officials were faced with rapid declines in the state’s mineral tax revenues, historically the biggest contributors to Wyoming coffers.

Irrigation collapse

After an irrigation canal collapsed, leaving more than 100,000 acres of farmland in Goshen County and Nebraska without water for months this summer, officials are looking into ways to prevent similar incidents in the future.

Built by the Bureau of Reclamation more than 100 years ago, the Gering/Fort Laramie Irrigation Canal collapsed in July, causing the governors of Wyoming and Nebraska to declare states of emergency.

Although the U.S. Department of Agriculture later said crop losses would be covered by insurance, a previous economic analysis report produced jointly by the Nebraska Extension and University of Wyoming Extension originally estimated the collapse could cost both states about $90 million combined. 

Opening the books

After a years-long legal battle between Wyoming officials and non-profit organizations over state government transparency, Wyoming State Auditor, Kristi Racines released Wyoming’s checkbook  shortly after taking office in January.

The data dump contained approximately 4.9 million line items of expenditures made by state agencies during the last six years, but it does not include several spending categories such as state employee salaries or victims’ benefit payments.

Racines took transparency a step further and launched a website dedicated to providing the public with basic spending data for the state.

Using the data provided through both the checkbook and website, Cowboy State Daily covered a series of state spending stories including the Wyoming Office of Tourism’s sponsorship of rodeo teams, the Wyoming Department of Correction’s purchases of religious items and a look at Wyoming’s own air fleet

Big Boy

The largest steam engine ever built, the Big Boy locomotive, crossed Wyoming for the first time in 60 years, bound for Utah and the 150th anniversary of the completion of the country’s first transcontinental railway.

“A steam locomotive is a living, breathing piece of machinery,” said Bob Krieger, a former steam locomotive engineer who now runs the UP Historical Society in Cheyenne. “You can see its muscles. You can hear it breathe as it pulls a grade. All steam engines do that. The Big Boy is just the biggest.”

Train enthusiasts from all over the world flocked to Wyoming to witness the historic trip.

Capitol renovations

State agencies started moving back into the Wyoming Capitol building this summer as a $300 million renovation project neared its end.

The refurbishment of the 129-year-old Capitol was the centerpiece for the Wyoming Capitol Square Project that also involved updating the Herschler Building to the north and the space between them.

The reopening ceremony coincided with the celebration of Wyoming’s Statehood Day, and the unveiling revealed a Capitol building considered to be much more accessible to the public, with larger rooms, broader passageways and more open space.

“They’ve done a lot of stuff here that opened up the Capitol,” said Joe McCord, the former facilities manager for the Capitol. “The stairs going into the House and Senate are wide open right now. Downstairs, you’ve got the galley that’s wide open. The rooms are bigger. I just love it, what they’ve done. They’ve done a great job.”

Despite being mostly complete, many agencies were still working with temporary furniture towards the end of the year as the state worked out the details of new furniture request for proposal.

Taco John’s

There was a whole lotta Mexican goin’ on at Taco John’s 50th anniversary this year, some of which the company is taking to Minnesota.

While founded in Cheyenne half a century ago, the fast food chain announced in December it was expanding its corporate office to Minneapolis, where there are more than 200 Taco John’s locations within a few hours drive from the city. But for those readers who can’t get enough oles, the franchise is slated to remain headquartered in Wyoming. 

Women’s Suffrage

State legislators kicked off the 2019 Legislative Session by passing a measure setting aside a day to recognize Wyoming as the first state in the nation to give women the right to vote.

The measure declared Dec. 10 as “Wyoming Women’s Suffrage Day,” which marks the day in 1869 when Territorial Gov. John Campbell signed the bill giving women the right to vote in Wyoming.

Marking the occasion with music, the Wyoming Symphony Orchestra commissioned an original work from American composer Stephanie Ann Boyd. 

“Wyoming, of course, put through women’s suffrage about 50 years before everybody else, and so we’re taking the inspiration of that, and the stories of the women that were instrumental in that, and writing a piece about them, but also writing essentially a 25-minute minute love letter to Wyoming,” Boyd said.

On Dec. 10, women and men marched to the Capitol commemorating the newly declared holiday and highlighting instances of inequality that still need to be addressed.

Black 14 

Fifty years after the University of Wyoming expelled 14 members of its football team, known as the Black 14, for wearing black armbands onto the field, race relations are still strained in the Equality State, said Mel Hamilton, one of the Black 14.

“It’s a shame to say, but it’s pretty much the same as when I entered Wyoming in 1965,” Hamilton said, adding, “with one exception — it went underground.”

Adding diversity to the history books and teaching students how minorities contributed to growth of the U.S. as well as informing them how racism was cultivated by ignorance would be a strong step toward improving Wyoming’s future race relations, Hamilton said. 

“They must be allowed to learn what other races have given this country,” he said. “They are ready to lead the way if we — the old vanguard — just get out of the way and let them do it.”

Chronic Wasting Disease 

The Wyoming Game and Fish Department released a draft plan to address a fatal disease running rampant through the state’s wildlife population.

“(Chronic Wasting Disease) has been documented spreading throughout the state, and there are areas where its prevalence is high enough that we think it could be having significant impacts on some of our herds,” said Justin Binfet, one of the plan’s authors and a Game and Fish Department wildlife management coordinator. “The plan is based on recommendations that were developed through an extensive collaborative process.”

Dubbed a “suite of strategies,” the plan suggests managing the disease by installing wildlife feeding bans, potentially targeting mule deer bucks during breeding season, voluntary and mandatory submission of harvested animal samples and working with landowners, cities and counties to eliminate areas with unintentionally high concentrations members of the deer family.

Wyoming’s largest wind farm extends construction schedule

in Energy/News
Carbon County wind
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By Cody Beers, Cowboy State Daily

An approved change in the construction schedule of the largest wind farm in Wyoming doesn’t mean that the project south of Rawlins has been delayed.

Instead, it means the Chokecherry and Sierra Madre Wind Energy Project will take 11 years to complete rather than eight as originally believed, officials said.

The new construction schedule, approved in February by the Wyoming Department of Environmental Quality, would see installation of 500 wind turbines, capable of generating a total of 1,500 megawatts of power, between 2022 and 2024. Another 396 turbines, with a generation capacity of another 1,500 megawatts, would be installed in 2025 and 2026, according to Kara Choquette, spokesperson for Power Company of Wyoming LLC (PCW) and TransWest Express LLC. Both companies are separate affiliates of The Anschutz Corporation, the Denver-based company.

A megawatt is a unit for measuring power that is equivalent to one million watts. One megawatt is equivalent to the energy produced by 10 automobile engines. A megawatt hour (Mwh) is equivalent to the amount of electricity used by about 330 homes during one hour.

The Carbon County Commission approved the construction schedule extension following a July 2 public hearing in Rawlins.

“It’s not unusual to request extensions or permits,” Choquette said. “Meeting all the rules and regulations at the county, state and federal levels is difficult, but it ensures protection of the resources. The State of Wyoming is very good at making sure energy development comes with environmental conservation.”

“We really appreciate the great support we have received for the project from the stakeholders of Carbon County and across Wyoming,” Choquette said.

The 2014 permit for the wind farm, issued by the Wyoming Department of Environmental Quality’s Industrial Siting Council, required communication about any construction scheduling changes. 

In a January 2019 letter to Wyoming DEQ, PCW stated it had completed 49 turbine pads and 60 miles of roadways for the wind farm. But the letter also stated that the construction schedule needed to be amended because of market demands, workforce schedules and availability of construction materials.

“PCW’s proposed changes to the construction schedule are due to prioritizing the completion of these infrastructure elements for the entire project, Phase 1 and Phase 2, before moving to installation of the turbine and transmission components and balance of plant,” PCW Vice President Roxane Perruso wrote in the company’s letter to Wyoming DEQ.

PCW’s request was approved by Wyoming DEQ Director Todd Parfait in February, and the Carbon County Commission finalized approval at the county level following its early July public hearing.

The wind farm will ultimately triple Wyoming’s entire wind power generation capacity, Choquette said.

“This wind power plant will provide at least 3,000 megawatts of wind energy capacity,” she said. “Currently, Wyoming has about 1,500 MW of wind energy capacity installed in six counties, including Albany, Laramie, Carbon, Converse, Natrona and Uinta counties.”

Choquette said the Chokecherry and Sierra Madre Wind Energy Project (CCSM Project) is an estimated $5 billion investment.

“The long-term surface disturbance of the CCSM project is less than 1,500 acres of a working cattle ranch that will remain a working cattle ranch,” Choquette said.

Much of the surface disturbance involves the turbine pads – the graded areas of land where the turbines themselves will be installed.

Choquette said up to 200 workers will be needed in the first few years of wind farm construction, growing to a peak of almost 850 with construction of the turbines.

“This will increase business opportunities for local hotels, motels, RV parks, restaurants and other local service providers,” she said. “During operations, the CCSM project will create 114 full-time operations and maintenance jobs, which would make the project one of the largest non-governmental employers in Carbon County.”

Choquette said the CCSM project will provide significant property tax and sales/use tax revenue for Wyoming, as well as electricity tax revenue, totaling an estimated $850 million during construction and through 20 years of operation.

Choquette, also the communications director for Transwest Express LLC, said Transwest is an independent transmission developer. 

Transwest, she said, is a separate company from PCW that is “exclusively focused on developing interregional transmission to connect Wyoming to new renewable energy markets in places like California, Arizona and Nevada, while also adding capacity for the West’s power grid that connects all western states.

“The TransWest Express Transmission Project, as well as Rocky Mountain Power’s Gateway West Transmission Project and their Gateway South Transmission Project, all go through the northern edge of the CCSM project site south of Rawlins/Sinclair,” Choquette said. “So, there are multiple transmission options for CCSM electricity, and similarly, the Transwest project will have the capacity to deliver energy westward from multiple Wyoming generation projects.”

The Wyoming DEQ’s Industrial Siting Council unanimously approved a permit May 29 to construct and operate the transmission project. The transmission line is scheduled to for construction between 2020 and 2023.

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