Wyoming energy gleanings

Another constitutional scholar dubious of the Wyoming plan to target Colorado with lawsuits

The Associated Press has rounded up another constitutional scholar who takes a dim view of Wyoming’s strategy to prop up its exports of coal and coal-generated electricity by suing other states, including Colorado.

Legislators appropriated $1.2 million in a law signed by Gov. Mark Gordon on April 6. In a story posted on April 1, Big Pivots identified the legislation as having a focus on Laramie River Station. The plant is partly owned by Tri-State Generation and Transmission. Tri-State has members in Wyoming and Nebraska, and power from that plant goes to both states, but most of the power from Tri-State’s interest in that plant is exported into Colorado.

Robert Percival, an environmental law professor at the University of Maryland, sees Wyoming’s case as being shaky.

“I don’t think they have a legal leg to stand on,” Percival told The Associated Press’s Mead Gruver.

This is from Big Pivots, an e-journal that tracks the energy and water transitions in Colorado and beyond. To subscribe, go to BigPivots.com.

The Constitution’s Commerce Clause prohibits states from barring goods and services based on their state of origin. States are free, however, to regulate or outright prohibit certain goods and services—coal and coal-fired electricity included—as long as they don’t intentionally target other states, Percival said.

Washington may be another target of Wyoming’s legal appropriation. Wyoming and Montana last year asked the Supreme Court to override a decision by Washington state to deny a permit to build a coal export dock on the Columbia River, to enable coal to be exported to Asia.

The Supreme Court hasn’t said yet if it will hear the case, but Wyoming’s new legal fund could help cover the cost of litigation, Michael Pearlman, spokesman for Wyoming’s governor, told AP.

The coal litigation fund followed a 2020 bill that established a $1 million fund to promote Wyoming coal. Wyoming is paying a nonprofit, the Energy Policy Network, $250,000 a year from the fund to contest plans in other states to shut down coal-fired power.

 

Buyers of Powder River coal get more picky about heating value

In the Powder River Basin of Wyoming and Montana, the shrinking continues of the once vast coal mining empire. What mine will be next to close?

WyoFile’s Dustin Bleizeffer reports that new analysis suggests that buyers are getting more picky about the heating value of the coal they buy and there’s a trend toward short-term contracts.

Powder River coal came on strong beginning in the 1970s and 1980s because of its low content of sulfur. This allowed power plants to burn it with less result of acid rain—and violating the Clean Air Act.

The downside was that the coal has less heating value than that produced in some other regions, with generally 8,400 to 8,800 Btus per ton.

New analysis by Dan Cohn, of the Sightline Institute, a research group based in Seattle, found that those mines with the coal of 8,400 Btu have fared more poorly as power plant operators have reduced their demand.

A coal train readies for shipment form the Coal Creek Mine south of Gillett on March 1, 2021. Top photo, the Laramie River Station near Wheatland on Feb. 28, 2021. Photo/Allen Best

That reduced demand continued in 2020. Even without closing coal plants, utilities are operating them at lower capacities.

“The implications of that continuing decline are likely to hit Powder River mines differently, based on a number of factors—including the heating value,” Cohn said in his report, “Planning for Coal Mine Closure in the Powder River Basin.”

Montana’s mine at Decker, a part of the Powder River Basin, closed in January. In February, Arch Resources said it is accelerating efforts to downsize operations at its Coal Creek and Black Thunder mines in preparation for closing. Coal Creek will likely ship its last trainload of coal this year.

All this is laid out in the example of the Scherer Power plant in Georgia. It’s the largest coal plant in the nation with a generating capacity of 3,500 megawatts—more than double that of Colorado’s two largest coal-burning complexes, Comanche at 1,635 megawatts and Craig at 1,283 megawatts.

In 2017, the Georgia plant purchased coal from six Powder River mines, the largest a contract for a 3.4 million tons. Last year, there were four contracts, the largest for 1.7 million tons.

“We’ve entered this sort of twilight phase in the Powder River Basin coal mining industry where it is no secret that some company will close their mine next,” said Cohn.

Arch and Peabody Energy, the largest and best financed among producers in the Powder River, have both said they will eventually leave the Powder River.

The companies also operate Twenty Mile Mine, near Steamboat Springs.

For the Sightline Institute report, go here.

For the WyoFile story, see “Report: Coal’s decline hits Powder River Basin  mines differently.”

More hope—and cash—for research into carbon capture technology

Hope continues that coal can remain a viable resource through improved technological innovation.

The U.S. Department of Energy in late April announced $99 million in grants to study technology that removes carbon from industrial exhaust and uses it for other purposes.

The federal agency gave $64 million of that to Membrane Technology and Research. The company is working at Wyoming’s Integrated Test Center near Gillette.

Another $3 million federal grant shepherded through Congress by Wyoming representatives is to be used to support Wyoming-based research “focused on expanding and transforming the use of coal and coal-based resources to produce coal-based products, using carbon or rare earth element and critical minerals.”

WyoFile took a hard look at the continued hope for what is sometimes called carbon capture and sequestration (or storage). Now it’s also being called carbon capture utilization and storage.

The most telling comments came from Clark Williams-Derry, an energy finance analyst for the Institute for Energy Economics and Financial Analysis.“… the technology is iffy and the subsidies aren’t high enough to make most projects pencil out,” he wrote in an e-mail to WyoFile.

The latest hope for carbon capture technology, at Petra Nova, a power plant in Texas, has ended badly. Others have also stumbled in the last decade. In the last 10 to 15 years, major investments in carbon capture at plants in Illinois and then Mississippi have been abandoned.

WyoFile reports new momentum. Congress has extended a tax credit seen as critical for carbon capture projects for another two years. And there’s a push for expanded federal research.

Is it enough?

“I really do believe that there’s a role for carbon capture, particularly in heavy industries (steelmaking, cement) that produce a lot of carbon as a process byproduct,” Williams-Derry said. “However, real world progress on financially and technically viable carbon capture projects has been poor.”

Colorado also sees a potential role for carbon capture in its energy future, as Will Toor, executive director of the Colorado Energy Office, pointed out in a presentation earlier this year.

In an upcoming issue of Big Pivots, look for a deeper study of the potential for carbon capture.

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Allen Best