Candidates Propose Different Paths Forward for Wyoming's Coal Industry

 

 

By Michael Illiano

August 11, 2018 - Discussions about economic diversification have featured in nearly every Wyoming race this election cycle, with candidates suggesting ways the state can decrease its reliance on revenues from the volatile energy sector.

At the same time, however, candidates are proposing solutions to the challenges facing the state’s energy sector and that sector’s most prominent commodity, coal.

Bill Dahlin, a Republican candidate for governor whose background is in the transportation and logistics of coal, said the biggest challenge facing the coal industry is competition from natural gas, which in the current market is proving to be a cheaper alternative to coal.

“I don’t see regulation in the coal industry as a major hurdle,” Dahlin said. “What we have in the coal industry is a lack of demand.”

Dahlin said most forecasts in the coal industry predict the demand for coal will remain relatively flat for the next 20 to 40 years, and because of that, one of the central planks in Dahlin’s platform is reducing the state’s reliance on coal revenues through economic diversification.

That doesn’t mean giving up on coal, however.

Even if demand for coal remains flat, the industry will continue to contribute to the state’s economy. But Dahlin said there are also potential innovations on the horizon that could change the forecast for Wyoming’s coal industry.

Dahlin said if export terminals on the West Coast start letting Wyoming ship coal to Asian markets, or the state finds technology to modernize its industry, such as carbon capture plants or the production of carbon fiber products, the outlook for Wyoming coal could change.

Several candidates running for office this election cycle are proposing plans they hope will achieve that change.

Dave Dodson, a Republican candidate for the U.S. Senate seat currently held by John Barrasso, said he sees opportunities to modernize and grow the coal industry, but taking advantage of them will require a change of course.

“I firmly believe that coal has a place in a green energy future, but we haven’t been supporting the technology in order to make that happen and we haven’t been making the argument with our coal exports,” Dodson said.

Japan and South Korea both signed the Paris Climate Accords and are currently trying to cut down carbon dioxide emissions to meet the emission reduction targets in the Accords. Currently, those countries import most of their coal from Australia and Indonesia but Dodson said Powder River Basin coal is cleaner and more compatible with the environmentally-friendly coal plants Japan and South Korea are building.

The reason Wyoming’s coal is not currently being exported to Asia, though, is the state does not have access to export terminals on the West Coast. The concerns blocking Wyoming from those terminals are primarily environmental, and Dodson said the state isn’t addressing them.

“We’re trying to get approval by sticking our finger in the chest of the people on the other side of the argument instead of working with them,” Dodson said.

Dodson argues Wyoming should be framing the export of coal through those ports as a project that would reduce global carbon emissions without displacing green energy.

In addition, Dodson said Wyoming needs to do a better job of demonstrating to communities surrounding the ports and along rail lines that coal is securely in trains and treated with chemical sealants so that it will not emit dust.

Mary Throne, a Democratic candidate for governor who previously worked as an energy lawyer, is advocating an approach similar to Dodson’s.

“I think we can make a much better case for our leading energy products if we recognize that the markets have changed and we have to advocate in a different way than we have in the past,” Throne said.

Specifically,Throne said the state needs to become a leader in researching and implementing carbon capture technology, which could modernize Wyoming’s coal and provide solution to climate concerns.

“We have to make Wyoming’s coal part of the climate solution, not the climate problem,” Throne said.

Because coal will continue to be used around the world, regardless of what the United States does, Throne said carbon capture technology will be necessary for achieving global reductions in emissions. At the same time, carbon capture technologies would make Wyoming’s coal more viable in a market that is increasingly influenced by climate concerns.

Dodson is also pushing for the state to find more resources for the development of carbon capture technology and criticized Barrasso for not securing more federal funding for development of the technology.

Throne sees a specific opportunity for the state to find federal funds 45Q tax credits, which were recently enhanced to offer more funding for carbon capture research.

She added that developing carbon capture technology would allow Wyoming to make a stronger argument to states like Washington when trying to convince them to let it ship coal through their export terminals.

Rep. James Byrd, D-Cheyenne, who is running to become Wyoming’s secretary of state said coal has the potential to be a stable and lucrative resource for the state going forward.

“We can continue to double down on burning coal as fuel and end up in the same place as the critters who made that coal — pretty much a fossil and a footnote in history,” Byrd said. “Or we can apply some intellect.”

One possibility for coal, Byrd said, is the development of synthetic fuels, or synfuels, which are fuels derived from coal through chemical conversion that can be used to create products for markets as varied as pharmaceuticals, paints, cosmetics and PVC plastics. But Byrd said the full potential of synfuels has not been realized yet.

“The breakthrough thing is probably going to be designed by some kid playing with Legos right now,” Byrd said. “We don’t even know everything we can do with this stuff, in all honesty.”

Byrd’s plan is for the state to essentially act as a venture capitalist by investing in a pilot plant that would prove the feasibility of the concept to outside investors. In return, the state would get a cut of the profits if and when that project bears fruit.

Once the concept is proven, Byrd said he is confident the state will be able to attract investors to expand synfuel production throughout the state.

 

Using coal to create products outside the energy industry could make coal a more resilient commodity. Energy downturns will not affect cosmetic or plastic markets, Byrd said, and by bringing in revenue from those more stable markets, the coal industry would be able to offset some of the volatility of the energy market.