Can Wyoming Reinvigorate the Coal Industry?

by Bob Shively, Enerdynamics President and Lead Facilitator

Open Pit Coal Mine

Texas and Wyoming are perhaps the two states most associated with fossil
fuels production – Texas with its oil and natural gas, and Wyoming with its coal. Concerns about global warming, evolution of new low-cost natural gas and renewable electric generation, and growth of electric vehicles are putting pressure on economies dependent on fossil fuels.

Texas has been able to hedge its energy bets by developing a robust renewables industry, leading the Wall Street Journal to recently pen a front-page article titled “Texas’ Latest Gusher: Wind and Sun”[1]. Meanwhile in Wyoming, numerous renewable projects are in development stages including a 3,000-MW wind project by the Power Company of America. However, Wyoming has struggled to rapidly grow renewable energy production. Barriers include Wyoming’s remote location, lack of transmission to carry power to loads in other states, and, in some cases, lukewarm political support by a state where the coal economy is estimated to make up 14% of state GDP and 11% of state government revenues[2]. 

texas-vs-wyoming-renewables-production

Source: EIA

Opportunities to Market Coal in the U.S. Appear to be Declining

Since its peak in 2008, Wyoming coal production has fallen by almost 20%. 

wyoming-coal-production

Source: EIA

The fall in production is not due to lack of supply in Wyoming, because reserves and productive capability remain robust. Instead it is driven by lack of demand as the U.S. generation fleet transitions from a dominance of coal to rapid growth in natural gas and renewable capacity.

history-of-generation


Wyoming Attempts to Buoy Coal’s Future

Given the importance of coal production to Wyoming’s economy, the trends are not promising. Coal producers in Wyoming have attempted to develop export markets to sell coal to Asia but have been hampered by environmentalists’ opposition to developing West Coast ports to allow more exports as well as the costs of shipping coal far distances[3]. Wyoming Governor Matt Mead is focused on the issue and realizes that without addressing coal’s environmental barriers, the future will continue to look bleak. 

In April of this year, Gov. Mead, state officials, and utility executives broke ground on a new $21 million research center in Gillette, Wyo., next to the Dry Fork coal power station. The center will provide a real-life laboratory for scientists to design and test technologies that remove carbon emissions for the plant’s emission stream.  Participating scientists will be buoyed by the opportunity to win a $10 million prize offered by the XPrize Foundation and awarded to the team that can best achieve two goals: 1) remove the greatest amount of carbon from the stream; and 2) turn the carbon into a product with the largest commercial value[4]. The governor also recently signed a cooperation agreement with the Japan Coal Energy Center, a consortium of 120 companies, for research associated with clean-coal technologies[5].

According to the governor, the hope is to find a game-changing technological breakthrough that will again make coal a favored fuel. It won’t be easy, as other research associated with removing carbon emissions has resulted in technologies that work in laboratories but have yet to prove economic in power plant applications. Time will tell whether coal can continue to support Wyoming’s economy or whether Wyoming should look to Texas’ example of finding new ways to grow a more prosperous energy future.  


Footnotes

[1] Wall Street Journal, August 29, 2016

[2] See: The Impact of the Coal Economy on Wyoming, available at  http://www.uwyo.edu/cee/_files/docs/wia_coal_full-report.pdf

[3] See for example: Think Progress,The Plan to Revive Big Coals Fortunes Isn’t Panning Out,   https://thinkprogress.org/the-plan-to-revive-big-coals-fortunes-isn-t-panning-out-cc6300b1e715#.r2wbuq62r

[4] For more details, see: The Casper Star Tribune, Wyoming, hoping to save coal, breaks ground on a new test center,  http://trib.com/business/energy/wyoming-hoping-to-save-coal-breaks-ground-on-new-test/article_53e3cadb-502e-5429-9c7f-5cc7c1fa15f4.html

[5] See:  The Seattle Times, Wyoming Partners with Japanese Companies seeking coal, http://www.seattletimes.com/business/wyoming-partners-with-japanese-companies-seeking-coal/

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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