California has Silicon Valley. Wyoming’s Powder River Basin wants to be known for the element one row up the periodic table. “Carbon Valley” is a vision of the future for America’s largest coal-producing region. The basin’s officials dream of a high-tech place where thick seams of coal are turned into graphene, aircraft fuselages, wind turbine blades and the black granules in water filters. The move is an act of desperation as much as inspiration.
Wyoming thermal coal, which is burnt to generate electricity, has now followed the rest of the US industry into irreversible decline.
The basin’s annual output has dropped by more than a third in the past decade to estimated 300m short tons in 2019, as US utilities demolish coal-fired power plants in favour of natural gas, wind and solar energy (a short ton is equivalent to 2,000lb). In a state with no income tax, where coal was the fiscal bedrock of the budget, politicians are now having to make hard choices.
“We need new economic engines,” says Mark Christensen, a commissioner in Campbell County who is helping lead the Carbon Valley initiative. “Does that mean we have to abandon the energy sector? No. We need to find new uses for the products we have.”
Coal-dependent economies such as Wyoming would be crushed if the US took aggressive action against the greenhouse gases that cause global warming. A steadily escalating carbon dioxide tariff starting at $25 a ton would reduce Powder River Basin production by 95 per cent by 2030 by rendering coal too costly, as it has the highest rate of carbon pollution among fossil fuels, according to government estimates analysed by Adele Morris of the Brookings Institution.
This threat underscores why many lawmakers in coal precincts oppose policies to tackle climate change and why Wyoming voters gave President Donald Trump his greatest margin of victory of any state in 2016. Mr Trump made reviving the industry central to his campaign. He has since ended a moratorium for new coal leases on federal land and issued rules that would push coal-fired plants to run more often.
Wyoming is suffering despite that support. The pain is especially acute for 578 local employees of Blackjewel, a mining company that filed for Chapter 11 bankruptcy on July 1. Workers on its Eagle Butte and Belle Ayr sites were ordered out. Gates were locked, and have not been reopened.
A court-approved transfer of the open-pit mines back to their former owner, Contura Energy, has stalled as the federal government seeks $60m in unpaid royalties. Campbell County is claiming another $37m in back taxes.
Blackjewel collapsed amid a darkening fiscal backdrop for the state. Annual receipts from Wyoming’s coal severance tax, paid when the mineral is removed from the ground, have shrunk by more than $100m from a peak of nearly $300m in 2011, with government forecasters eyeing further declines in the years to come. Coal royalties are also $100m lower.
