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Wyoming Mining Spokesman: Coal Production Up, Being Sent Domestically

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By Ellen Fike, Cowboy State Daily

Wyoming’s coal producers are not yet seeing the impact of a European ban on the import of Russian coal, according to an industry official.

However, the state’s coal producers have seen significant increases in demand for their product domestically, said Travis Deti, executive director for the Wyoming Mining Association.

“With the ban on importing Russian coal, it doesn’t impact Wyoming much at all,” Deti told Cowboy State Daily. “Our prices are a little bit higher than where we traditionally are, around $16 a ton, which is about $4 higher than our typical prices, but we’re not in the $100s like the national prices.”

The low sulfur content of Wyoming’s coal means it has a lower energy content, so it sells for less than coal from other areas of the country.

According to Bloomberg, U.S. coal prices topped $100 a ton for the first time in 13 years last week as the Russian war in Ukraine upended international energy markets and an economic rebound from the pandemic drove up demand for fossil fuels.

Russian coal accounted for almost 18% of global exports in 2020, according to Bloomberg.

Deti said traditionally, Wyoming has not exported coal internationally. He added the trend may continue because of logistical issues and the question of whether Europe would want Wyoming coal.

However, Powder River Basin mines, which produce most of Wyoming’s coal, have had to hire 300 coal miners in order to keep up with domestic demand, he said.

“Our mines are pretty much sold out right now, we are using so much of our coal domestically,” Deti said. “So if there was a market to ship coal to Europe, we would staff up further and also get more people in more trains to move the coal.”

Deti said the increase in the price for Wyoming coal has been driven by rising natural gas costs. He said that anytime natural gas goes over $3, Wyoming coal becomes competitively priced.

There is an opportunity to ship coal to Europe, but Deti said certain logistical pieces have to fall into place and European buyers will have to determine whether a purchase of Wyoming coal would be economically sound.

Deti said the increase in prices and production shows that coal is still very important to the United States’ energy supply.

“We can’t put all our eggs in one basket, whether it natural gas or renewables,” Deti said. “Coal is really the only energy source which is readily available and reliable, and we’re seeing that now. We’ve seen a shift back to coal because gas prices have gone up.”

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Wyo Mining Association: Climate Coal Agreement Is Meaningless to Wyoming

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By Ellen Fike, Cowboy State Daily

Despite claims to the contrary, the climate agreement made in Scotland this month will have little effect on Wyoming or the rest of the country, according to the president of the Wyoming Mining Association.

According to the Associated Press, almost 200 nations accepted a compromise deal reached during the United Nations climate change conference that was intended to fight global warming. However, a change promoted by India saw the agreement revised to have countries “phase down,” rather than “phase out” their use of coal.

“You know, these things come and go, but they don’t mean much,” WMA Executive Director Travis Deti told Cowboy State Daily on Tuesday. “I think what you could take away from the watered-down language on coal was that there are some people out there that understand that the world needs coal.”

Deti said that in order for a developing nation to move into a modern economy, it needs coal as an energy source.

According to the U.S. Energy Information Administration, about 477 million short tons of coal were consumed in the nation last year. This was equal to about 10% of the total U.S. energy consumption.

Coal has long been identified by those who say the world’s climate is changing as a source of greenhouse gases that trap heat around the globe.

According to Reuters, scientists say warming beyond this point could unleash irreversible and uncontrollable climate impacts.

Officials at the climate conference attempted to uphold the goals set in the 2015 Paris Agreement, keeping global temperature from rising beyond 2.7 degrees Fahrenheit, by drafting an agreement calling for an end to the use of coal.

The change championed by India, however, called for a reduction in the use of coal rather than its elimination as a power source.

Deti said that the climate agreement would have no effect on Wyoming’s coal operation, or really on any facet of life in the state. He does expect the trend to move away from coal to continue, but doesn’t see that having an adverse effect on the state at least for a few years.

He also noted that when gas prices are high, the prices of coal also rise. He noted that coal prices in the Powder River Basin doubled in the last week and that the state’s mining companies have basically committed to sell all the coal they produce until 2023.

“We’re gonna have a pretty good couple of years on the coal side in Wyoming,” Deti said. “The world needs coal. The world needs fossil fuels. You’re not going to power developing economies or mature economies with wind and solar. You need that reliability that comes from fossil fuels, and coal in particular.”

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Geologist: Wyoming’s Coal Production Bump Is Good, But Not Sign Of Recovery

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By Elyse Kelly, The Center Square

After years of decline, Wyoming’s coal industry recently saw a bump in production.

Powder River Basin (PRB) coal producers reported a 6% increase in production from January through June of 2021, the Associated Press reported. PRB put out 107.9 million tons of coal this year compared to 101.85 million tons during the first half of 2020, according to AP.

Kelsey Kehoe, coal geologist for the Wyoming State Geological Survey, said the market is complicated, but credits a return to pre-pandemic levels of electricity demand for the bump.

“As 2021 has seen fewer stay-at-home orders and economic shutdowns, electricity demand is recovering,” Kehoe told The Center Square. “Additionally, natural gas prices are currently higher than they’ve been over the last five to six years, which makes the cost of coal-generated electricity more competitive with electricity produced from natural gas.”

But she is realistic about the increase.

“In Wyoming, the slight rebound in production is positive, but the demand is still much lower than it was a few years ago,” Kehoe said. “Anecdotally, we are hearing stories of mines hiring more workers, an uptick in rail shipments, and an uptick in rail traffic.”

Last year’s production marked a 22.5% decline in thermal coal, AP reported. This year’s uptick is not likely to turn things around, Kehoe observed.

“For thermal coal production (as opposed to metallurgical), it appears that this is a relatively short-term phenomenon,” she said. “The broader issues driving reduced demand still exist – primarily, the decline in electricity generation from coal-fired power plants.”

Forecasts from the U.S. Energy Administration and Wyoming’s Consensus Revenue Estimating Group (CREG) both project a drop in coal production for the nation and Wyoming respectively next year following the current bump, Kehoe noted.

“The US has significantly fewer coal-fired power plants in operation now than it did a decade ago, due to plant retirements and conversions to other fuel sources,” she said. “The largest annual decreases in coal-fired capacity occurred in 2015, 2018, and 2019. Having fewer plants in operation has reduced the demand for thermal coal year after year.”

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New Campbell County Attorney Vows To Go After Former Blackjewel CEO Jeff Hoops

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By Jennifer Kocher and Mark Christensen, County 17

New Campbell County Attorney Mitch Damsky is making good on his promise to look into some of the dealings of out-of-state coal companies, setting his sights first on former Blackjewel CEO Jeff Hoops.

On top of leaving the county on the hook for $16 million in ad valorem taxes after the company’s bankruptcy in 2019 that exposed the tangled – and allegedly deceitful – underpinnings of his fossil fuel empire traversing 32 mines, several states and an undisclosed number of shell companies, Damsky said that Hoops left a lot of ruined lives in his wake as he and his family profited handsomely.

For this reason, Damsky said he will take a closer look at potential criminal activity on the part of Hoops, whether that be fraud, theft or other crimes with the goal of procuring enough evidence to empanel a grand jury investigation in Campbell County.

“Let’s put it before the people and let them decide whether or not any criminal activity has been done,” he said. “If anyone has first-hand knowledge of secreting, diverting or subverting funds, we’d like to hear from them.”

Damsky feels there’s enough evidence based on his preliminary investigation, as well as the many red flags that continue to be unearthed through the complicated unlayering of the company itself, to justify a grand jury. 

He pointed to a July article in a publication by the Sightline Institute detailing what reporter Clark Williams-Derry described as seven bombshells. 

Of interest most pointedly to Damsky was Hoops’ own admission of the tight cashflow back and forth between Blackjewel and affiliate company Revelation Energy between 2013, during which they racked up hundreds of millions in unpaid bills, which Williams-Derry said either pointed to business failure or outright fraud.

This on top of Hoop’s breaking ground on a $30 million resort called the Grand Patrician, complete with a 3,500-seat arena modeled after a Roman coliseum, that was unimpeded by the bankruptcy filing.

Equally troubling to Damsky was bombshell No. 4 in the article which described the $79 million in transfers between Blackjewel and other bank accounts under his control, including his own personal accounts. 

In one instance, Hoops transferred $45 million into Blackjewel before extracting $34 million, which by Hoops’ accounting meant he was still owed $11 million among other discrepancies.

In short, Damsky would like to take a closer look for potential wrongdoing.

“It’s like a Chinese house with a 1,000 doors,” Damsky said, which he views as part of a larger pattern by other out-of-state coal companies who ‘blow and go’ through bankruptcies before selling to the next highest bidder – or the next company willing to take on reclamation liabilities – at the expense of the people of Campbell County.

A snake oil salesman

Rory Wallett, for one, was happy to hear that the county attorney is planning to delve into Hoops’ affairs. It’s about time somebody step up and do some investigating, he said.

Fresh off the night shift from Belle Ayr early Thursday morning, Wallett, a production technician, sipped an iced chai at The Local coffeeshop in downtown Gillette, as he recounted the stress that he and the 600 other local miners went through following the layoffs two years ago.

As a result of the layoff, Wallett lost his house and recalled the strain on both his family and his marriage. He knows of at least a handful of marriages that broke up as a result of those rocky times and just as many of his former friends and colleagues who were forced to take work elsewhere and move as a result of Hoops’ shady and inept business dealings.

This is the guy who flew out to Gillette, stood among workers in the breakroom and shook all their hands.

“He’s definitely a snake oil salesman,” Wallett said. “He knows how to sell the product he’s selling.”

A house of cards

On July 1, 2019, Blackjewel abruptly entered Chapter 11 bankruptcy along with its affiliated companies (County 17, Jul. 1, 2019). The filing caught many within the community by surprise, not because of Blackjewel’s financial status, but because of the chaotic nature of the process.

When the bankruptcies of Arch Resources, Peabody Energy, and Cloud Peak Energy had been announced, the firms simultaneously said they’d already secured debtor-in-possession (DIP) financing (a form of financing used by lenders in Chapter 11 bankruptcies that gives them priority over older debts). 

Those companies entered bankruptcy, but for employees and the community very little initially changed. The workers continued working, their paychecks continued coming and the companies continued relationships with vendors.

Blackjewel was different. Based upon conversations with Blackjewel employees, the morning of the bankruptcy, mine managers told employees about the bankruptcy, but said that things would continue as had been the case with the bankruptcies of the other PRB coal companies – their employment would continue and the operations would carry on producing coal.

Hoops was portrayed initially as Blackjewel’s savior, indicating that he and his family, and their entities, would provide the DIP financing Blackjewel desperately needed. Hoops delivered cashier’s checks by private jet from his West Virginia bank to PRB employees for the most recent payroll they hadn’t received.

Hoops’ proposal to the bankruptcy court for Blackjewel’s DIP financing would provide the company with $8,963,068.

The proposed loan, however, secured by the DIP priority and basically all of the Blackjewel assets, was for $20 million. 

The new cash would come from Hoops and a company he controlled. The proposed order, prepared by Hoops’ attorneys, took money that he had previously loaned personally and through other entities and categorized it as having been used “for valid business purposes” and noted that it was a revolving line of credit, not an equity contribution (important for priority in a bankruptcy, where equity is traditionally gone) and that the entire amount should be treated as DIP financing.

Hoops also included a reimbursement for the use of his private aircraft to fly the cashier’s checks to Wyoming at a value of $16,800.

Classification of all of the money as DIP financing would give Hoops and his companies super priority over other creditors, vendors, employees and local governments like Campbell County.

As the day drug on, no announcement on the DIP financing was made. Employees were finally told they were being laid off and to go home. Chaos at the PRB mines ensued as many employees had not been paid by Hoops for the current period and had never seen deductions from their checks for 401(k) accounts and health savings accounts (HSA) deposited for their benefit.

Judge Frank W. Volk of the Southern District of West Virginia held a hearing on July 1, but no decision was made. The hearing including many hours of testimony from Hoops and hearings were held the following day too.

It appeared to most that after alleged mismanagement and potentially fraud, Hoops was looking to use the bankruptcy to put himself above others and guarantee himself a payout. He also took the opportunity to imply to employees that the lack of approval of the DIP financing was because of a number of creditors, not serious concerns with his proposal.

On July 3, Volk denied the proposed emergency motion for post-petition financing (County 17, Jul. 3, 2019). In his ruling, Volk said that Blackjewel and the other Hoops entities failed to meet their burden of proof under Chapter 11.

“Moreover, I find that the proposed terms of the debt facility would unduly prejudice the rights of other parties and interests, in the majority of which have not had an opportunity to be heard, given the unusual circumstances that have been presented,” Volk said.

The same day he denied Hoops’ proposed post-petition financing arrangement, Volk signed an interim order granting emergency DIP financing priority for a $5 million loan from Riverstone Credit Partners (County 17, Jul. 3, 2019). Riverstone was already a Blackjewel creditor and their loan would address urgent needs at the mines in Campbell County – mainly fire watch since coal at rest and open to the elements can combust. As a condition of Riverstone’s loan, it moved to the top of the list of creditors.

Volk required one other thing. Hoops and his family were out of Blackjewel’s management.

The ramblings of a delusional man or a fraud who had run out of time?

One day after the Volk ruling on the emergency funding, Hoops sent a letter to Blackjewel’s 1,800 out-of-work employees (County 17, Jul. 5, 2019).

By this time Blackjewel’s PRB employees had missed a paycheck (those in the eastern U.S. were behind on multiple payroll payments) and found out that money withheld from their checks for 401(k) contributions and HSAs had never been deposited. Court records confirmed that more than $1 million in contributions had not been made. They were also unemployed with no sign of when some normalcy would return.

“No one is hurting more than me,” Hoops wrote in capital letters in a letter to employees, citing threats being made against him, his family and “anyone associated” with him “as a result of the misinformation.”

In his July 4 letter, Hoops vehemently denied any wrongdoing, and instead claimed that Clearwater Investments, which is owned by a Hoop’s Dynasty Trust “with many investments,” had loaned Blackjewel more than $11 million since January of 2019 due to flooding and missed shipments out West.

Hoops’ letter, written in all capital letters with long run-on paragraphs, read more like a desperate plea for apology than an explanation for employees who had worked hard for Blackjewel.

Mobilization of resources

While the bankruptcy court began digesting the Blackjewel case, Campbell County and Wyoming stepped in to help on the mine sites. The Wyoming Department of Environmental Quality (WDEQ) on its first visit to the site found explosives that had not been properly stored, shovels in precarious positions, and coal which had been sitting in a silo for too long. WDEQ acted, with the assistance of some Blackjewel employees, to make the mines safe (Wyofile, Jul. 3, 2019, reprinted on County 17).

Those who first visited the mines said it reminded them of the eerie photos seen after the Chernobyl nuclear meltdown, where a once active community was suddenly evacuated, leaving in place a full city, cars, clothes and parks with no people.

As employees chaotically left after being “laid off,” they vacated the two PRB mines in a similar eerie state. The mines’ huge shop doors, large enough to perform maintenance and work on giant haul trucks and other equipment were left open. All of the lights were on. Music from the shop speakers could be heard by those walking in front of the building. Coffee pots were left on, where a small amount of coffee that had been remaining evaporated and left a dark layer in the bottom of the pot.

Wyoming Governor Mark Gordon and his executive team, including the directors of WDEQ and the Wyoming Department of Workforce Services (WDWS), traveled immediately to Campbell County to offer support.

Gordon held a joint meeting with Campbell County Commissioners and Gillette Mayor Louise Carter-King, where the elected officials took questions from Blackjewel employees.

One miner asked the group, “Has anyone had contact with Hoops?”

Gordon and WDEQ director Todd Parfitt both said that they had not heard from the then reining CEO.

“I look forward to his call,” Gordon had said.

WDWS began working with employees on unemployment. Representatives from the Wyoming Community Development Authority (WCDA) were sent to help miners who might miss a home loan payment looking at options and potentially restructure their loans.

The earlier bankruptcies of Arch Resources, Peabody Energy, and Cloud Peak Energy, and their earlier layoffs, had a positive effect on the Blackjewel bankruptcy – the state had learned how to step in to help employees quickly.

The bankruptcy and previous behavior by Blackjewel had left many in Campbell County hurting – from employees to small business owners who were vendors of the company (WyoFile, Jul. 10, 2019, reprinted on County 17). Much of the hurt was a result of Hoops alleged double-dealing – a topic to be visited in depth by County 17 next week – and possibly Damsky’s best chance for prosecuting the former CEO.

But while Campbell County hurt, a big question came to the front of many people’s minds. What would happen to the two mines? Would they be reclaimed or would they remain as they were left? The discussion of reclamation brought another of the PRB mines’ previous operators back into the equation, Contura Energy.

A path forward?

Contura was born out of Alpha Natural Resource’s 2015 bankruptcy. Alpha’s senior creditors formed Contura to take the “lucrative” Wyoming mines off Alpha’s books, while Alpha continued operating mines out east (County 17, Dec. 11, 2017).

In December 2017, Contura announced the sale of its flagship Belle Ayr and Eagle Butte mines to Blackjewel, LLC, which was known only as a “private company based in the Kentucky Appalachians.”

Contura was to receive deferred compensation and some royalty payments. The biggest gain for Contura, however, was the requirement for Blackjewel to assume all permits and reclamation requirements associated with the PRB mines.

In what ended up being a stroke of luck for state leaders, the transfer of the mine permits and reclamation bonding for Belle Ayr and Eagle Butte from Contura to Blackjewel was never completed because of a challenge by the Powder River Basin Resource Council (PRBRC) (County 17, Nov. 29, 2018). Because of the hangups in transferring the mine permits, Contura still had responsibility for the mines and bonding in place.

As the bankruptcy case moved slowly, Wyoming’s Environmental Quality Council (EQC) delayed a decision on who held the mining permits for Eagle Butte and Belle Ayr pending information from the bankruptcy court.

As state Sen. Micheal Von Flatern, whose area includes the City of Gillette stated, “Thank God they didn’t [approve the permit] and kept Contura on the hook,” (WyoFile, Jul. 16, 2019, reprinted on County 17).

As Contura was still on the hook for reclamation at the two mines, which had been estimated to cost upwards of $250 million, the bankruptcy took an unexpected turn. Contura, who had only two years earlier happily sold off its PRB mines to place more focus on metallurgical coal, became the backup buyer for Belle Ayr and Eagle Butte after Judge Volk approved the stalking-horse agreement between it and Blackjewel. Parties interested in the assets could bid on them, but if no buyer came forward, the stalking-horse agreement terms would prevail (County 17, Jul. 26, 2019).

Under the agreement, Contura agreed to purchase what was referred to as the Western/Pax Assets including the Belle Ayr and Eagle Butte mines in the PRB and the Pax mine in West Virginia. The deal included an $8.1 million purchase deposit plus $12.5 million in additional cash to, in effect, finance the sale process.

That deal never happened. Riverstone Credit Partners, the firm who had provided the initial $5 million DIP financing for Blackjewel and jumped to the head of the line as a creditor, leveraged Contura’s reclamation obligation, to push the deal up to nearly $34 million (WyoFile, Aug. 13, 2019, reprinted on County 17). After initially making a loan to Blackjewel in 2017 at a 15% interest rate, the private equity firm would leave the ordeal largely unscathed, with remaining creditors, vendors, and local governments left out in the cold.

Enter Eagle

On September 18, 2019, Contura announced again the sale of its Belle Ayr and Eagle Butte mines. The owner this time would be Eagle Specialty Materials, LLC (ESM), an affiliate of FM Coal, LLC (County 17, Sept. 18, 2019).

“We’ve been clear that operating long-term in the PRB was not in Contura’s strategic plans, and that the best possible outcome for all interested parties would be for another responsible operator to step up that was interested in doing just that,” said David Stetson, Contura’s chairman and CEO. “We are extremely pleased that this deal outlines a path to relieve Contura from any go-forward liabilities related to these assets, while also providing long-term employment opportunities for hard-working miners and ongoing revenue to local, state, and federal governments.”

Under the terms of the deal, Contura agreed to pay ESM $90 million cash for taking over the two mines. Contura also agreed to pay Campbell County $13.5 million for back ad valorem taxes, though $15 million was due and assessed in Contura’s name exclusively (County 17, Oct. 1, 2020). ESM agreed to pay the county half of the tax debt owed by Blackjewel over a five-year period.

Happy endings?

Wallett was lucky, he said. He and his wife weathered the rocky times, and Wallett was among the first crew to be rehired that fall by ESM with a $2 per hour raise. In recent weeks, he said, some of his former coworkers have also begun returning.

So far, so good, Wallett said, when it comes to the mines’ new owner.

For the first time that he can remember, Wallett and staff will receive a $500 year-end bonus and ESM has also donated $20,000 to local community groups. Their signal, in his mind, that they intend to be part of the community. The company just celebrated its first year in the PRB in October with a company-paid dinner and stocking caps and gifts cards for all employees.

Despite the otherwise happy ending, Wallett was pleased to hear that charges may potentially be brought against the former Blackjewel CEO who had once sidled up to them as one of their own, while in his mind, lying directly to their faces.

He’s happy to spread the word that the new county attorney is looking into potentially pressing criminal charges. Anyone with information is asked to contact either the Campbell County Sheriff’s Office or the Campbell County Attorney’s Office.

If nothing else, Damsky would like to send a message to Hoops and others like him that Campbell County isn’t planning to sit still and take it anymore.

His message: Don’t screw Campbell County.

“I’m not afraid of his (Hoops’) money,” Damsky said. “If there’s any criminal activity of his part, I’m going to go after him with a vengeance.”

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Gordon Releases Study Showing Benefits Of Coal Plant Retrofit

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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.

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Wyoming Coal Bankruptcies: Who is Responsible for Reclamation?

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By Ike Fredregill, Cowboy State Daily

Since 2015, six coal companies operating in Wyoming have filed for bankruptcy, causing some to question who will be responsible for reclaiming the defunct operations’ mines. 

However, Wyoming coal mining rules that recently underwent a significant update will protect the state against having to foot the bill for any reclamation left uncompleted should a mine simply walk away from its obligations, state officials said.

Shannon Anderson, a staff attorney with the Powder River Basin Resource Council, said her organization has concerns about future reclamation, given declines in the coal industry.

“With potential coal mine closures, we’re concerned a lot of that reclamation yet to occur won’t have funding,” she said. “Coal mine economics continue to deteriorate. Coal generation is at its lowest level since 1975, and these are trends that are probably not going to reverse.”

The resource council was founded in 1973 to advocate for responsible energy development, and Anderson said tracking reclamation efforts was a top priority for the organization in 2020.

“We’re three to four decades into coal mining now,” Anderson said. “And, there’s still a lot of land that hasn’t been reclaimed yet.”

According to a report released by the Western Organization of Resource Councils, more than 234 square miles of coal-disturbed land is unreclaimed across the West with Wyoming, Montana and North Dakota accounting for the vast majority of the unreclaimed lands.

“Luckily, Wyoming has been revising its bonding rules,” Anderson said. “But, we still have a lot of work to do.” 

Contemporaneous reclamation

Coal reclamation is the recovery of mined land for use by other industries and the public, said Kyle Wendtland, a Department of Environmental Quality Land Quality Division administrator. 

As companies move their mining operations forward, they reclaim previously mined areas, which lowers the cost of reclamation, Wendtland explained.

“For surface coal mines, reclamation is concurrent with the mining, or contemporaneous,” he said. “As you expose the coal through creation of a pit and extraction of the resource, that pit advances, and then, the prior pit is backfilled.” 

After backfilling and contouring a previously mined tract of land, mining companies add top soil and seed it as the first phase of the reclamation process. By phase two, the land is often already back in use, Wendtland said.

“Typically, most of this land will go back to agricultural production of some sort,” he said. “In phase two, you’re usually seeing it used for some sort of livestock or wildlife grazing or hay production.” 

The land must be in phase two for at least 10 years before it is eligible for release in phase three, DEQ spokesperson Keith Guille said. 

“Ensuring the companies follow the reclamation procedure is our responsibility,” Guille said. “We have inspectors go out to these mines once a month to ensure they’re meeting requirements.” 

All Wyoming mines are currently in compliance with the DEQ’s reclamation standards, he added.

Bonding process

To receive a mining permit from the DEQ, a company must post a reclamation bond, a performance obligation guaranteeing the permittee will return the land to a natural state. 

“The idea is the bond itself is a financial number of what it would cost for a third party to reclaim the mine,” Guille explained. “It’s like insurance.”

The most common form of bonding is a surety bond.

“Many companies pay premiums to a surety company, which in turn says they will cover them for this much of the bond if by chance they were to walk away,” Guille said. 

In 2019, Wyoming tracked more than $2.4 billion in surety bonds for coal and non-coal reclamation, according to DEQ documents. 

Self-bonding is the second most popular bonding method in Wyoming and concerns organizations like the resource council most. 

“Self-bonding is when you have a company that has a really high credit solvency,” Wendtland said. “And, they’re saying they have sufficient assets in the company that even if they fail, they’ll pay for the reclamation.”

Wyoming tracked more than $400 million in self bonds for coal and non-coal reclamation in 2019 of which $297 million was designated specifically for coal, DEQ documents state. 

Prior to 2015, the state held more than $2 billion in self bonds for coal.

Following guidance provided by the governor’s office, Wendtland said the DEQ reviewed its bonding policies when coal mines started filing for bankruptcy.

“We took the ‘hard look’ at our rules and did a rewrite,” he said. “Gov. Mark Gordon signed that new rules package in May 2019. Right now, Wyoming is the only state that’s undergone the rigorous process of doing that.”  

Under the new rules, self bonds can be used for up to 75 percent of a company’s bond amount and are accepted based on a credit rating rather than the previous system, which used on-balance sheet ratios. 

The changes are working well, Guille said, and the DEQ is confident the state will not have to cover bankrupt companies’ reclamation costs in the future. 

“We strengthened the rules to protect the taxpayers, the state and the companies,” he explained, adding no further changes are in the works. “We believe we’re at a point that we don’t need to be changing things around anymore.”

By the numbers:

The Wyoming Department of Environmental Quality reported about 184,000 acres of land in Wyoming are listed as disturbed by coal operations. 

Fixed facilities — shops, haul roads and rail spurs — account for approximately 38,000 of the overall acreage.

Active mining pits account for about 40,000 acres. 

Leaving approximately 107,000 acres in various phases of reclamation.

The DEQ reported all coal mines are in compliance with Wyoming’s reclamation requirements.

Wyoming, Montana to Sue Over Coal Export Terminal

in Energy/News

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

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

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.”

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

in Energy/News/Taxes
Silhouette of a Pump Jack

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

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.”

Hits to coal prompt leaders to look elsewhere for development

in Energy/Economic development/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.

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 Energy/Economic development/News

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.”

Blackjewel closures bad, but not the worst, officials say

in Energy/News
Gillette Wyoming coal

By James Chilton, Cowboy State Daily

GILLETTE – It’s been nearly a month since Blackjewel LLC abruptly shuttered its coal production operations, locking some 600 Gillette-area miners out of the Eagle Butte and Belle Ayr coal mines. And as Blackjewel continues to hammer out its fate in U.S. Bankruptcy Court, Gillette searches for silver linings to this latest economic cumulonimbus.

For as threatening as the Blackjewel storm cloud may be, the city has seen worse; and not all that long ago, either. Mayor Louise Carter-King said that during the Peabody Energy and Arch Coal bankruptcy proceedings in 2016, oil and natural gas prices were also bottoming out, leaving displaced energy sector workers with few places to turn locally for employment.

“Three years ago oil was down, natural gas was down, coal was down. It was like a perfect storm and it hit us very hard,” Carter-King said. “This time it was more due to (Blackjewel’s) mismanagement rather than the underlying economy, because both of these mines were profitable.”

While she expects the mine layoffs to have a ripple effect on the city’s sales tax revenues, it will be some time before that impact is seen because state remittance of sales taxes are backdated by two months. But Carter-King said she doesn’t expect any impact to be especially long-lived this time around, thanks to a stronger job market that’s provided fall-back opportunities for those who can’t afford to wait for the mines to reopen.

“I know some employees are holding out for that, but those who can get jobs that are equal or better are jumping ship,” she said. “The good news is, a lot of people have been able to find jobs.”

Rick Mansheim with the Wyoming Department of Workforce Services said the DWS Employment and Training office in Gillette took immediate steps to get information out about resources available to the displaced miners, as well as to address some of their most urgent economic questions. In addition, DWS called upon its community and statewide partners to swiftly assemble a job fair that brought in employers from across Wyoming and the Mountain West.

“Five days after the (mine) closings, we had a big job fair at Gillette College where we had 40 employers, not just local, but from Colorado, Utah, Arizona, Montana,” Mansheim said. “They saw over 450 people in one day; and I know a good percentage of people were actually offered jobs that day. So if there’s a bright side at all to this layoff or whatever you want to term it, it’s the fact there were jobs available and a lot of these people were able to find employment relatively quickly.”

For the rest, Mansheim said DWS has been helping walk people through applying for unemployment benefits and ensuring they know how to maintain their health insurance coverage.

“A lot of these people have never gone through something like this, so we’re helping them understand the unemployment process – because it is a process, it’s not something where you just come in, type in your name and that’s it,” Mansheim said. “We’ll probably do another job fair if we hear something about whether the mines are going to be bringing people back or not, and we keep in contact with the city and the county to make sure we’re on the same page.”

City Communications Manager Geno Palazzari said Gillette has also been working with nonprofits and social service agencies to marshal assistance in the aftermath of the mine closures. One of the first calls, he said, was to the Food Bank of the Rockies to enlist the aid of that group’s mobile food pantry, which will set up at Family Life Church, 480 S. Highway 50, from 1 p.m. to 6 p.m. July 29 and Aug. 19.

“They’re already mobilizing to get trucks up here,” Palazzari said. “We’ve also reached out to some of the social service agencies in the community we fund … to make sure they didn’t need an advance on the funding we provide them to make sure they can make it through these times.”

While Blackjewel has been an important contributor to the city’s tax revenue base, Palazzari and Carter-King said they don’t expect these latest closures to impact city services. That’s mainly because the city has been extremely conservative with its spending since the 2016 downturn, when it had to cut nearly four dozen positions and $60 million out of its budget.

“Those were tough days. We had to lay off people and we looked at everything with a microscope,” Carter-King said. “Three years ago woke us up and taught us that we’ve got to be prepared for things like this.”

Prior to 2016, the city had enough cash in reserve to keep things running for 90 days without any new revenues. In 2016, the city council voted to increase that to 120 days, and then to 150 days in September 2018.

“There’s approximately $14 million (of operating reserves) budgeted for Fiscal Year 2020,” Carter-King said. “Now, if not another dime came into this city, we could make it 150 days.”

Miners face uncertainty of changing coal markets

in Energy/News

Miners left without jobs with the closure of two of Campbell County’s biggest coal mines are facing a changing reality in the nature of the coal industry, Gillette residents agree.

Residents said although the coal industry has traditionally been a stable source of income and employment, the dropping demand for coal has changed that.

“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.”

About 600 miners lost their jobs several weeks ago when Blackjewel closed the Belle Ayre and Eagle Butte mines. Efforts are being made to secure funding to return the mines to operation.

If those efforts fail, many of those who lost their jobs will probably leave the community, predicted Ken Anthony, a retired miner.

“You’ve got two to three kids at home and you’ve got a big old house payment and car payment and all of a sudden that stops,” he said. “It’s pretty scary. When they lose their jobs, it really makes a big effect on the whole county. If they can get the money and re-open (the mines), it will be fine. If they can’t, more than likely, most of (the miners) will leave.”

Gee noted that while some companies are offering jobs to Blackjewel’s former miners, most do not have the resources to offer the same level of salaries or benefits.

Tom Lubnau, a former speaker for Wyoming’s House of Representatives, said the mine closures show the state needs to work to offset the diminishing demand for coal.

“We have to, in some way, take control of our own destiny,” he said. “If we can boost the market in a certain way, develop the technologies that we need to use to market our resources, then we should do that.”

In the meantime, Gillette’s residents are doing what they can to ease the burden on the unemployed miners, said Trey McConnell, manager at the Railyard Restaurant.

“The people here, in bad times they bond together, they help one another out,” he said. “It’s one of these areas where you can kind of rely on your brothers and sisters. It’s just a very tight-knit community.”

Blackjewel layoffs could have ‘truly scary’ impact on economy

in Energy/News
Belle Aye Mine

By Ike Fredregill, Cowboy State Daily

With two of Wyoming’s largest coal mines closed pending Blackjewel LLC’s bankruptcy filings and approximately 600 laid-off workers warming the bench, legislators and state economists are contemplating the future of coal in Wyoming.

“Just because a coal mine stops producing doesn’t mean the demand for coal stops,” said Dan Noble, Wyoming Department of Revenue’s director. “Because most coal-fired power plants use Powder River Basin coal, those coal customers may switch to the other producers in that area. At which point, there’s not a significant drop off of coal produced.”

Wyoming Sen. Cale Case, R-Lander, explained coal-fired power plants tune their operations to coal products from specific regions of the world.

“Another mine (in the basin) might be able to pick up (Blackjewel’s) contracts,” Case said. “While that’s a reasonable story for the tax receipts, it’s not at all good for the laid-off workers.”

As the Senate chairman of the Wyoming Legislature’s Joint Revenue Committee, he said Blackjewel’s bankruptcy was concerning, but he pointed to the larger issue: The coal industry is withering away.

“We are looking at a general reduction in production of Powder River coal,” Case said. Revenue Committee House of Representatives Chairman Rep. Dan Zwonitzer, R-Cheyenne, added coal mining in Wyoming might grind to a halt in little more than 10 years.

“The modeling used to say we’d be good until 2050,” Zwonitzer explained. “Now, the modeling is saying 2030.”

The loss would be a major hit for the state, he said.

Reviewing only severance tax, which is imposed on the extraction of non-renewable natural resources intended for use in other states, Noble said coal production generated about $211 million in revenue for Wyoming in 2017.  

“The assessed value for all minerals in the state is (about) $10 billion,” he said. “And coal represents (about) 15 percent of all of the taxable value in the state.”

Labor force impact

While coal revenue could fill the state’s coffers for another decade, the Blackjewel layoffs might significantly hinder local economies in northeastern Wyoming.

“In May, unemployment (in Campbell County where the Blackjewel mines, Belle Ayr and Eagle Butte, are located) was down to 3.2 percent, which is pretty low,” said David Bullard, a Wyoming Department of Workforce Services senior economist. “We won’t have July’s numbers for a while yet, but just talking in round numbers, it could push unemployment (in the county) up to 6 percent.”

Wyoming’s average unemployment rate was 3.3 percent in May.

Campbell County’s labor force has trended downward in recent years with about 24,600 in May 2016 dropping to about 22,700 by May 2019, Bullard said.   

“In general terms, if these 600 (Blackjewel) jobs disappear, we would expect that to have a negative affect across the local economy, and to a lesser extent, the entire state,” he said.

With about 4,000 jobs catalogued by Workforce Services, mining is one of the largest employment categories in the county, and Blackjewel’s employees accounted for about 11 percent of the sector, according to the department’s data. If the company is not able to secure more funding for its Wyoming operations, Bullard said the community could suffer.

“I expect a significant number of (the laid-off Blackjewel workers) would move away for other opportunities in other areas,” he explained. “That would impact the local economy by lowering demand for services and retail as well as tax revenue for governments and schools.”

More than three decades ago, U.S. Steel closed its iron mine in central Wyoming, but Case said the memory is still fresh.

“I’ve been through it in Lander, and when the mine shut down, we lost 550 good-paying jobs,” he recalled. “It is a killer — these are good jobs. You got $70,000 (a year) household incomes coming out of those mines. That money is in those communities. It’s scary. It’s truly scary.”

The future

As coal revenue wanes, legislators are reviewing options to keep the state afloat.

“It’s revenue that Wyoming has depended on for over 100 years,” Zwonitzer said. “With that gone — it’s a sizable chunk of the budget. There’s a lot of concern in the revenue committee.” 

Increasing taxes on wind and solar energy is one possible avenue, but Zwonitzer said even the best estimates of potential revenue from renewable energy don’t come close to covering the gap left by coal.

“I think our two main options right now are a corporate income tax or a significant increase in property tax,” he added. “They may not be two good options, but they are the two palatable options right now.”

Case said some are looking to the oil and natural gas industries for answers.

“I’m just asking the question: what if oil were to go the same route?” Case posited. “We need to find a way to find long-term revenue for our state, our schools and our roads.”

As the era of coal-fired power plants nears its end, Zwonitzer said the revenue committee will continue to research ways of lessening the blow to Wyoming’s economy. But for now, the future is bleak.

“There’s no good news ahead,” Zwonitzer said. “It just keeps getting worse.”

Gordon vetoes call for state to sue over coal terminal

in Energy/News
shipping containers at export facility

By Cowboy State Daily

A bill that would have allowed the Legislature to sue the state of Washington over the denial of permits for a coal export terminal has been vetoed by Gov. Mark Gordon.

Gordon on Friday vetoed HB 251, saying if legal action was taken by the Legislature, it could interfere with court filings already submitted by the executive branch.

“Giving courts the impression that two branches of Wyoming’s government might be second-guessing one another — in fact potentially litigating over the top of one another — would be counterproductive to our best efforts to protect Wyoming’s interests,” he said in his veto message to Secretary of State Ed Buchanan. “Furthermore, dividing the limited resources of Wyoming’s Attorney General between two potentially contemporaneous cases would do a disservice to both at the expense of Wyoming.”

However, Rep. Chuck Gray, R-Casper, said the measure would have set up a cooperative effort between the legislative and executive branches.

“It’s going to take a team effort between the executive branches for there to be success on this issue,” he said in a prepared statement. “This bill created a framework for this team effort to occur, so that we have the best chance for success on this issue. The veto is detrimental to that effort.”

Washington officials have denied necessary permits to build a coal export terminal to export coal from Wyoming and other states to foreign markets. Lighthouse Resources, the company proposing the export terminal, is suing Washington over the denial, alleging the state is violating the U.S. Constitution’s Commerce Clause.

Wyoming and several other coal-producing states have filed “friend of the court” briefs in support of Lighthouse’s lawsuit in U.S. District Court.

Gordon wrote that while he supports the Legislature’s desire to protect the state’s economic interests, legal action taken by lawmakers independent of the executive branch could cause confusion.

“This bill … carves an unprecedented path — absent compelling reason — encouraging the Legislature to take a potentially different course from that that the state is already pursuing,” he wrote. “The obvious confusion this could engender is at best problematic and at worst fatal.”

Responsibility for such legal action rests with the executive branch, not the Legislature, Gordon wrote.

However, Gray said by taking up the issue, the Legislature would have sent a message to Washington officials.

“This bill shows the state of Washington that we are serious about this issue,” he said. “Also, the Legislature looking into this issue creates the environment where there is the best opportunity for success.”

Authorization to sue Washington clears Senate

in Energy/News

By Cowboy State Daily

Wyoming’s Legislature could launch legal action against the state of Washington over its refusal to allow the construction of coal export terminals under legislation approved by the Senate on Monday.

HB 251 was approved in its third reading on a vote of 22-7.

The measure gives the Legislature’s Management Council — lawmakers in leadership positions — the authority to file a lawsuit with or without the governor’s authorization and sets aside $250,000 for legal service.

The dispute stems over Washington’s denial of permits for Lighthouse Resources to build coal export terminals to ship American coal to Asian markets, which the bill maintains is a violation of the U.S. Constitution’s Commerce Clause. Wyoming in May joined five other coal-producing states in filing “friend of the court” briefs in support of a lawsuit against Washington filed by Lighthouse.

The bill calls for the Legislature’s Joint Judiciary Committee to study the feasibility of suing Washington for damages and then make a recommendation to the Legislature by Dec. 1. The money set aside to hire legal services could not be used until the Legislature approves the expense.At least one senator said she did not understand why the state needs to hire outside lawyers.

“My preference would be to use the talented lawyers we have working in the Wyoming attorney general’s (office) to do the bulk of that work rather than providing those dollars to outside attorneys,” said Sen. Affie Ellis, R-Cheyenne.

Ellis said she would also rather see the state team up with coal companies already suing Washington than start separate litigation.

Representative seeks cut in coal taxes

in News/Taxes

By Cowboy State Daily

A state representative is trying to bring coal taxes more in line with those assessed against oil and gas.

Rep. Tim Hallinan, R-Gillette, is proposing a cut in coal severance taxes from 7 percent to 6.5 percent, a reduction he said was warranted given the fact the coal industry has paid the state almost $1.2 billion in taxes in the last five years.

Hallinan said a 6.5 percent tax rate would bring coal closer to the 6 percent severance tax assessed on oil and gas.

“I saw this a an equity issue and a way we could strengthen the coal industry in my community,” he said.

The reduction would cut Wyoming’s severance tax income by an estimated $13.5 million per year, according to Legislative Service Office estimates.

Hallinan’s bill, HB 167, is awaiting a review from the House Revenue Committee.

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