January 19, 2017
It’s a coal industry executive’s wet dream: At the same time some state lawmakers want to tax the wind energy industry out of existence, there’s also a push in the Wyoming Legislature to lower coal taxes by nearly $30 million a year.
For the rest of us, it’s a double nightmare. Our revenue-starved state government is foolishly trying to prop up a dying, planet-threatening fossil fuel industry by giving it a huge tax break, while purposely killing development of an abundant renewable resource and promising new industry.
Welcome to Wyoming, which too often proves the theory that for every idiotic action taken by state legislators there is an equal idiotic action in the opposite direction.
A bill to transfer wealth from Wyoming citizens to Arch and Peabody
House Bill 104 would lower taxes on coal. The bill has been assigned to the House Revenue Committee (see sidebar for contact information).
Rep. Scott Clem (R-Gillette), the bill’s sponsor, claims he’s simply trying to level the playing field for coal, oil and natural gas severance taxes. Coal is now taxed at rate of 7 percent, whereas oil and natural gas are taxed at 6 percent. Clem’s bill would lower the coal tax rate to 6 percent. In the process, he would choke severance tax revenue in Wyoming to the tune of $30 million a year.
There has been no discussion of leveling the playing field by raising oil and natural gas up to 7 percent to bring in more tax revenue to the state.
“Most coal contracts pass on the tax to the customers so the coal companies don’t take the direct hit,” Cheyenne attorney and lobbyist Lawrence Wolfe told the Casper Star-Tribune. “To the extent the severance tax is paid by the coal producer, under some contracts, this bill is just a direct transfer of wealth from the citizens of Wyoming to Arch or Peabody.”
When asked how the state would make up the $30 million it would lose from the coal tax break, Clem’s answer was predictable given the governing philosophy of many GOP lawmakers. He said the state would just cut government.
“I would rather see cuts,” he said. “Our government has grown. We still have the most government employees [per capita] of any state.”
Remember that Wyoming currently faces a $1.5 billion education budget shortfall over the next six years. After cuts of 8.5 percent or more from agency budgets last year, and at least 5 percent the year before, can you guess where Clem would like to take an additional $30 million to hand to the coal industry? Again, it’s predictable: When Wyoming lawmakers say, “we need to tighten our belts,” it typically means the legislature is going to strip public services from people who need them most.
A bill to ban renewable energy
Amidst all this coal coddling, Wyoming remains the only state in the nation that taxes wind generation. Still, Republican legislators want to raise the wind tax rate, from $1 to $5 per megawatt hour or higher. This is a horrible idea. But it pales in comparison to a new anti-renewable-energy law proposed by Wyoming legislators who are apparently excited that 2016 broke yet another record as the hottest year in history.
Senate File 71 would officially define what are “legitimate” and “illegitimate” energy sources in the state—fossil fuels, hydroelectricity, and nuclear are all okay, but if Wyoming utilities use wind or solar power to provide consumers with electricity, they would be penalized $10 per megawatt hour. Since wind is already taxed, and Wyoming has among the strictest laws limiting solar use, the law would serve as a de-facto renewables ban.
Other states provide incentives to utilities and customers to use renewable resources, but not Wyoming. In fact, Sen. Larry Hicks (R-Baggs), said he and others sponsoring the bill are legislating on behalf of coal because other states legislate against it. Talk about entrenching our state in the wrong side of history.
Wyoming is adamant about killing its wind industry
Despite the best efforts of fossil fuel-loving legislators—who refused tax credits for wind developers because they argued the industry was too heavily subsidized—wind projects have still been built here and more are on their way.
Unless legislators scare off the Power Co. of Wyoming that is building it, Wyoming will be the site of the largest on-shore wind farm in the nation. A total of 1,000 wind turbines are expected to be installed at the massive Chokecherry and Sierra Madre project in Carbon County. The BLM has approved about half the installations so far.
But the very existence of bills like SF 71 could negatively impact wind power development in Wyoming because of the uncertainty it creates about the cost of doing business here. Even though Wyoming has one of the most abundant sources of wind in the country, companies are understandably worried when they see Wyoming is adamant about killing the industry before it can become a major renewable energy player.
The staggering hypocrisy of anti-renewables overreach
Conservatives who preach the gospel of a free market tend to reserve a special exception for renewable energy. Chuck Mason, economist at the University of Wyoming’s Center for Energy Economics and Public Policy, told the Casper Star-Tribune, “This [renewables bill] strikes me as protectionism, and I don’t get it. We would want markets to be unfettered and vendors to have access to the cheapest, best sources of the things they are selling. If that happens to be wind or solar, then that will be wind or solar.”
Wyoming politicians have been blowing hot air for so long about “federal overreach” and allegedly unnecessary regulations to protect the environment that they could power their own wind farm. But these are the same people who want to prop up coal by using legislation to stifle solar and wind energy. The hypocrisy is staggering.
This state has a long history of shooting itself in the foot by rejecting attempts to actually diversify its minerals-based economy. This is doubly true when it comes to opposing energy development that doesn’t threaten the climate. Unless the people of Wyoming who are sick of the boom-bust economy and who don’t believe global warming is a hoax stand up against proposals like Clem’s coal tax cut and the renewables ban, the state will continue to blunder down the delusional path toward economic schizophrenia and ecological destruction.