Economic Transformation in the Powder River Basin: What Is It — And Why Now?
By Rusty Bell, Director of Office of Economic Transformation, Campbell County
Since the very first day of the Office of Economic Transformation, in January 2023, there have been questions concerning what exactly the office is and what its goals are. The short answer to those questions is to eliminate economic vulnerability. The long answer, however, is found in this article.
First, let us look at the current economic climate in the Powder River Basin (PRB), specifically, Campbell County. As of June 21, there are six active coal-fired power plants and 12 active open-pit sub-bituminous coal mines. These coal mines produced 238 million tons of coal in 2022 and shipped that coal to 25 states and two continents. The June unemployment rate in Campbell County was 2.6%, with 2,000 job openings county-wide and only about 50 houses on the market. Campbell County also has the state’s second-highest average annual income (behind Teton County) which is around $81,000.
This staggering information again begs the question, why is transformation needed?
Economic transformation is needed for many reasons, with the most prominent being the lack of an overall national energy plan that considers affordable and reliable baseload power. We could refer to this nonexistent document as a guide for fossil-reliant communities to plan for the time when technology advances enough to ensure we have stored power when the wind doesn’t blow and the sun doesn’t shine; a plan that could incorporate carbon capture to address the world’s CO2 concerns. Instead of having an all-inclusive document with all forms of energy included, Americans are subject to the whims of election and agenda change from administration to administration.
Current reports show that 25% of thermal coal facilities will be offline by 2029. Due to the absence of any coal power generation construction currently or in the future, the decline will continue at an unknown rate until it dies around 2050-2060.
These are just a few reasons why Campbell County needs a transformation plan.
What Is the plan?
The Office of Economic Transformation was established in January of 2023. This U.S. Economic Development Administration (EDA) grant-funded office has a goal to eliminate economic vulnerability; to proactively engage in ending a boom-and-bust cycle and community mentality. Our office is going to work hand-in-hand with our local economic development office, Energy Capital Economic Development (ECED), to retain and recruit businesses and help them grow.
One of the best ways we can do that is to support the use of our valuable resources not only to continue to power America but to use it in other innovative ways such as coal to products. At present, coal to products is a small part of the overall coal use in the United States. We have a lot of encouragement from the coal industry to start using their product and infrastructure for more than just electricity. There are multiple companies looking at ways to make and market a value-added product made at a mine-mouth while using the available and affordable feedstock. Atlas Carbon is a fast-growing company in Campbell County currently doing this. They produce activated carbon for filtrations systems across the country. Atlas Carbon is an exceptionally good example of infrastructure reuse.
What Is Infrastructure Reuse?
Due to the drastic drop in the national use of thermal coal over the last decade, many of the coal production companies have facilities with infrastructure that is not being used to its full potential or being used at all. Combine that with coal companies that see an opportunity to be a partner to use that current infrastructure to make carbon products on-site and sell their own coal as feedstock. This could provide the ability to take the current coal mine infrastructure out of the mine reclamation bond that is required by the Department of Environmental Quality (DEQ).
This is an exciting opportunity for not only businesses that may be in research and development, but also companies that are ready to scale up to commercial carbon products. It is also a big win for the mining industry, mining service industry and the local economies that continue to depend on the tax base that the extraction industry provides. We are anxious to collaborate with any company that would like to use coal as feedstock for products, whether that product is a solid, liquid, or gas. There is an opportunity to partner with organizations that would have potentially seemed to have been opponents of coal production. One of the biggest supporters of coal infrastructure reuse is The Nature Conservancy. In Wyoming, they are working very diligently to help save the current coal infrastructure for alternative uses.
Why Is Now the Best Time for Transformation?
There is no better time than right now to start. As a former Campbell County Commissioner (2015-2022), I have never witnessed better partnerships with economic development and coal companies than now. Having a proactive, big-picture idea of moving the PRB and communities forward is critical.
While the coal industry has seen some challenging years in the last decade, coal has a definite future in many aspects of our economy. The global markets have shown that CO2 in the atmosphere is an issue they are going to invest in addressing. Campbell County and Wyoming have a regulatory framework and initial infrastructure to take advantage of this investment. Wyoming is one of two states that has Class VI primacy for underground sequestration of CO2. Campbell County is also home to Dry Fork Power Plant, which hosts the Integrated Test Center (ITC). The ITC is a carbon capture and carbon utilization test center. The center plays a key role in advancing the commercial readiness of carbon management technologies to help the world achieve its carbon goals.
Dry Fork is also home to the Wyoming CarbonSAFE Project, which stands for Carbon Storage Assurance Facility Enterprise. This is one of 13 original carbon capture, utilization and storage (CCUS) project sites in the United States funded by the Department of Energy (DOE) with the goal of ensuring carbon storage complexes will be ready for integrated CCUS system deployment. This, along with the Denbury CO2 pipeline, position Campbell County to be at the top of the list for CCUS potential. Recent Inflation Reduction Act (IRA) language also has incentives for companies looking to invest in energy communities. These additional investment opportunities coupled with the 45Q tax credits for CCUS efforts strengthen the reason to locate your company in the Powder River Basin.
To keep this amazing community thriving and create jobs for our workforce, we must work on economic transformation now. We cannot control the rest of the nation and how they view our natural resources, but we can and will help our community and the people by being proactive and using our resources to protect our way of life.