CHEYENNE, Wyo. — New signs of life in the fossil fuels extraction industries mean Wyoming has weathered an economic storm and better days lay ahead, Gov. Matt Mead said at an economic form Wednesday.
An economist was less optimistic Wyoming is making a full comeback after the latest downturns afflicting coal, oil and natural gas.
“At best we’re at a new normal. More likely we’re at a slow decline,” Rob Godby, director of the Energy Economics and Public Policies Center at the University of Wyoming, said when asked about the governor’s assessment.
Wyoming officials continue to adjust to falling state revenue from fossil fuels — down by almost 20 percent from four years ago. Still, Mead struck an optimistic tone at the annual Governor’s Business Forum hosted by the Wyoming Business Alliance.
“A difference a year makes is incredible. And I’m confident when I say that Wyoming has weathered the storm. We were at bottom and we’re coming back,” Mead said.
Wyoming is the top coal-producing state and Mead pointed out three major coal companies — Peabody Energy, Arch Coal and Alpha Natural Resources, which has been restructured in Wyoming as Contura Energy — are now out of bankruptcy.
Wyoming’s economy also relies heavily on petroleum development and Mead said oil and gas activity is up after drilling all but stopped.
“In visiting with oil and gas companies, the investment they are making now and the investment they are going to make next year is going to right the ship in the state of Wyoming,” he said.
Even so, Mead said, Wyoming shouldn’t always be bracing for the next economic bust but look to technology to diversify its economy.
“Let’s once and for all take away any doubt that Wyoming can control its destiny,” Mead said.
President Donald Trump has positioned himself as a champion of the coal industry, stopping a federal coal-leasing moratorium and undoing plans to regulate greenhouse gases from power plants. Mead, a Republican, didn’t mention the policy changes or Trump in his speech.
An October state economic forecast was slightly more optimistic than one in January but predicted a downturn in state revenue that began in 2015 would continue through 2020. The assessment means Wyoming lawmakers who will draft a budget for the 2019-2020 biennium this winter will need to make tough choices, especially about funding a K-12 public education system facing a deficit in the hundreds of millions.
The revenue pinch is probably here to stay as long as natural gas prices remain weak and gas competes against coal as a fuel source to generate electricity, Godby said.
Coal also faces global uncertainty because of its contribution to greenhouse gas emissions and climate change. The outlook hasn’t fundamentally improved just because coal companies that were bankrupt have shed their liabilities and short-term trends have boosted mining, Godby said.
“Whatever we can do to get away from the boom-bust cycle of the energy economy is crucial. What we see now doesn’t look like a temporary downturn in the energy cycle,” said Godby.
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