With the 2015 legislative session underway in Cheyenne, Wyoming citizens are hearing a lot of concern about the falling prices of energy commodities and how our state government will have less revenue this year and in years to come. We should be concerned. Our state’s economy is entirely too dependent on taxing the extraction of mineral resources. Our ability to fund community services, education, and other needs hinges on the price of coal, natural gas, uranium and oil.
But instead of prioritizing economic diversification and devising ways to grow out of the boom and bust cycle, our state leaders are doubling down on minerals. Gov. Matt Mead boasts of his “bulldogged” determination to promote coal. Legislators hope by fighting federal regulations and pumping money into tax breaks and subsidies to energy companies that we can somehow do something the market can’t do: create a viable future for these minerals and the huge corporations that produce them.
This narrow thinking has put some foolhardy ideas in the spotlight at this year’s legislative session.
First among these fool’s errands is the idea that we should authorize the Wyoming Infrastructure Authority to use its multi-billion dollar bonding allowance for entirely out of state projects (in Washington for example). Doing this might help get a coal export facility off of the ground they figure. The coal industry is in trouble domestically because of pesky realities like climate change and the falling cost of renewable energy, but our “leaders” think if we help the companies send our coal to Asia — whether the market wants it or not — they’ll be able to keep stripping it out of the ground and pumping Federal dollars into our state.
What our leaders don’t seem to realize — or perhaps don’t want to acknowledge — is that financing is the least of the worries of these proposed coal ports. Billions of dollars of private equity capital are eager to invest in viable ports that make market sense and are welcomed by their communities. But the reality is that today’s markets might not support ports and that community opposition, including significant opposition from some Northwest tribes, has been stopping one proposal after another. The governors of Washington and Oregon have publicly opposed coal port projects in their states, following the quaint custom of putting their citizens’ wishes above corporate desires. Yet our legislators puff out their chests and presume to change reality by offering our credit.
As opposed to thinking about a “Plan B” to meet revenue needs in a future with reduced coal mining, our state leaders are opting to force themselves into states that aren’t so happy with our meddling in their affairs. We’re about as welcome in Oregon as the EPA is in Campbell County, but that fact somehow escapes the legislature.
Another scheme that should go back to the bottom of the idea pile is a proposal to spend up to $50 million providing mineral feedstock to a natural gas to liquids plant. If you haven’t heard of natural gas to liquids plants don’t worry, you are not alone. There is not a single one of these white elephants operating in the U.S. With facility price tags in the multi-billion dollars range, the Energy Information Administration’s 2014 Annual Energy Outlook did not foresee any large-scale natural gas to liquids facilities in the U.S. through at least 2040. And that was before oil prices fell more than 50 percent and it became even more obvious that these facilities will be uneconomic into the very long-term. Yet somehow our legislators believe that by inserting our state — and our state checkbook — into the market we’ll be able to crush local opposition and change market reality. Shouldn’t we just let the market be?
Maybe if we hold our breath, stomp our feet, and shovel subsidies with a dragline from our dwindling treasury into dying corporations and has-been and never-was technologies we can change the realities of economies beyond our borders. You think? Our “conservative” legislators seem determined to find out.
Instead, maybe they should consider another way to create a really viable future for Wyoming citizens. Maybe someone should realize that Wyoming is doomed to become the state of gun grips and buggy whips in the rapidly evolving world that is leaving us behind. And perhaps — just maybe — we should start investing for the future by diversifying our economy, better supporting the sustainable economies of our state like tourism and agriculture, and doing what we can to get our state out of the grips of a boom and bust economic cycle too beholden to minerals.
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