Wyoming: Rock-ribbed Republican; loudly conservative; free-market advocates; pushes small government. Huh?
Wyoming’s economy for the past 40 years has relied on revenues from the low-sulfur, low-BTU steam coal from the Powder River Basin (which also extends into neighboring Montana). The state benefitted enormously from the early federal clean air rules, which displaced eastern, high-BTU, high-sulfur coal from domestic power markets.
The Cowboy State is now the nation’s largest coal producer, producing nearly 40% of U.S. coal, far surpassing the previous leader, West Virginia. The small town of Gillette (“sharpest town in the west”) has become the driver of the state’s economy.
But lately, as the federal government, the environmental movement, and the electric economy have pushed out coal in favor of natural gas, solar, and wind power for generation, Powder River Basin coal has fallen out of favor. Despite Donald Trump’s braggadocio about how he would save coal, which was hollow, the coal industry nationwide and in Wyoming in particular, is losing thousands of jobs.
Coal production in Wyoming is down 21% since 2019, according to the Wyoming State Geological Survey.
What to do? How about a turn to big government and an abandonment of free markets?
The Associated Press reports that Republican Gov. Mark Gordon in early April signed a new state law that allocates $1.2 million to fund legal challenges to states that have blocked coal-fired generation (can you spell CALIFORNIA?) in favor of other technologies. A spokesman for Gordon said, “Wyoming is sending a message that it is prepared to bring litigation to protect her interests.”
Is this potential exercise of government-mandated markets workable? University of Maryland environmental law professor Robert Percival told the AP, “I don’t think they have a leg to stand on.” The U.S. Constitution’s Commerce Clause bans states from blocking imports from other states. It doesn’t ban state important bans of particular commodities from multiple states.
But Wyoming’s action is more likely aimed at domestic politics than actual accomplishment, according to University of Wyoming economics professor Rod Godby. He told The Guardian, “In many ways this legal fund sounds crazy, like a Flat Earth idea. But for people in Wyoming, there is no other industry. It’s not just people losing their livelihood but also their culture – people here were proud they kept the lights on across the US. It’s very difficult to go from the hero to the villain.
“The lawsuits will fulfill that rhetoric because it will look like the state is pushing back against the leftists. But it’s symbolic, the fight is over – even if you win a court case it’s a pyrrhic victory because no one really wants the coal. The losses to the state are going to be so large that the rationale is to try to postpone that for as long as possible.”
–Kennedy Maize
A disclaimer. My late father in the early 1950s was a key official in an undergound coal mining company located in Sheridan, Wyo. I went to the Sheridan elementary school. I loved Wyoming and still do. The business failed as the Union Pacific railroad switched from coal to diesel for its locomotives.