Westkott, Marcia (2021, PRBRC chair)

Marcia Westkott, chair, Powder River Basin Resource Council

Dear Wyoming leaders,

With deep concern for Wyoming’s future, we need your focus on the critical issues and facts facing our state.

Coal, oil and gas production will continue to decline.

Coal funded our government services for decades. Wyoming production peaked at 466 million tons in 2008 and has dropped to less than half that amount today. Legislative schemes to require a carbon capture based portfolio standard can never make a dent in this problem. Only 5% of coal produced in Wyoming is consumed by in-state power plants. Most of that power is exported to neighboring states that are transitioning to cleaner energy sources. Only 2% of Wyoming coal production generates electricity for in-state loads.

Oil will not rescue our state budget. Wyoming accounted for less than 2.3% of U.S. oil production in 2019. North Dakota’s Bakken Formation, the Permian Basin and the Eagle Ford shale are North America’s low-cost oil producers. North Dakota produces five times as much oil as Wyoming, and Texas 18 times as much. Globally, Saudi Arabia is the low-cost producer. A recent price war with Russia created an oversupply and lowered world oil prices. These national and global realities ensure that Wyoming, a minor producer, will always be first out in declining markets.

Worldwide, oil supplies are increasing, and demand is dropping. Markets for petroleum-based transportation fuels will shrink with today’s rapid rise in electric vehicle sales. Already, Tesla has a market capitalization per dollar sales 50 times higher than General Motors, reflecting the investment community’s bet on the future of EVs. Even GM has announced plans to phase out internal combustion engines in 14 years.

Although natural gas will temporarily provide some replacement power for coal, it is likely that gas-fired generation will decrease as prices rise. It will also decline as renewable sources of energy and battery storage provide lower-cost power and add resiliency to the grid. In the end, gas will likely fuel only generating plants providing peaking power and backup to renewable energy sources.

Carbon capture and sequestration technology is experimental, unproven and prohibitively expensive.

There are no successful CCUS projects in the United States. All projects attempted have been abandoned due to skyrocketing costs (Kemper) and economics (Petra Nova). Requiring Wyoming power producers to use carbon capture on old coal plants is prohibitively expensive, will destroy market pricing and will lead to higher bills for utility ratepayers. The break-even price of compressing and pipelining carbon dioxide for enhanced oil recovery exceeds today’s market price for oil.

Wyoming’s overreliance on declining revenues from fossil fuels leaves us with a budget crisis that threatens our health, safety and future prosperity.

Proposed cuts of 10% in education and health services, on the heels of repeated cuts since 2017, will exact a heavy toll. Additional cuts of $100 million in K-12 funding, $35 million in University of Wyoming funding and $25 million in community college funding will degrade the viability of these institutions, the economic health of their host communities and the future quality of our workforce.

The next biennium calls for a $138 million cut in the Wyoming Department of Health budget, including a $49 million loss in federal matching funds. This deprives tens of thousands of uninsured or disabled Wyoming residents of health care. Cumulative state budget cuts exceeding 20% will diminish the quantity and quality of public services, cause loss of jobs and economic activity in our communities and make us less attractive to new businesses.

Decline in mineral revenues does not render Wyoming unable to afford quality education, health services and other public infrastructure.

Our state’s per-capita tax burden is one of the lowest in the nation. According to the Wyoming Taxpayers Association, the average household paid $3,000 in total taxes and (before the budget cuts) received public services costing $30,000. Our free ride is over.

Most Wyoming residents choose to live here for the state’s quality of life, not a tax structure that disproportionately benefits large corporations and the state’s wealthy at the expense of cuts to basic and essential social services. We believe that Wyoming workers and small businesses are amenable to an equitably applied increase in tax revenues commensurate with the government services they desire and depend on.

Wyoming workers and communities need state leaders who will work to recruit diverse industries, restructure our tax code, and seek funding from the new federal administration to provide job retraining and recruitment opportunities.

We offer our support to move forward to reinvent and reinvigorate Wyoming. We need your leadership.

Marcia Westkott is the chair of the Powder River Basin Resource Council. The Resource Council, founded in 1973, is a family agriculture and conservation organization in Wyoming. Resource Council members are family farmers and ranchers and concerned citizens who are committed to conservation of our unique land, mineral, water and clean air resources.

comments powered by Disqus