Facing A Reckoning, Wyoming Wrestles With A Transition From Fossil Fuels

Feb 10, 2021
Originally published on March 23, 2021 4:20 am

Not many American towns the size of Pinedale, population roughly 2,000, can boast that they have a $22 million aquatic center, with a beautiful lap pool, water slides, yoga rooms and a three-story climbing wall.

Then again, most rural towns this size probably haven't had the steady pipeline of tax revenue from natural gas pumped off nearby federal land to pay for it. The opening of the center, more than a decade ago, convinced its now director Amber Anderson to move back home after college in 2018 as a young professional.

"I would not have come back to Pinedale had it not been for this facility, and my family's all here and I love the outdoors and stuff but there just wasn't a lot to offer in Pinedale," says Anderson.

The Jonah Field is one of the most productive federal drilling lands in the country. But in the last few years, things have gotten tough. When prices were high, companies drilled a lot, but now there's a glut. Prices tanked and the pandemic has made that even worse. Locally, people are getting laid off, and Anderson recently had to cut the aquatic center's budget by almost half.

"It's kind of scary, living in that," she says. "Some diversification would probably be a positive thing."

Pinedale's three-story climbing wall, inside a $22 million aquatic center, was largely funded by tax revenue from the fossil fuels industry.
Kirk Siegler / NPR

Calls to diversify

The Biden administration's new climate agenda is forcing a reckoning for states that are dependent on fossil fuels, like Wyoming. Much of its economy — and its state budget — is built on exporting coal, oil and gas to the rest of America. The state is now expected to sue over President Biden's ban on new oil and gas leasing on federal land.

Wyoming's history is one of wild swings between booms and busts, but some have been saying that the state needs to diversify for decades.

"The money is so good, that people's eyes just glaze over," says Linda Baker, an environmental activist in Pinedale who also spent five years working in the oil patch.

For Baker, the latest bust feels different though. Wyoming, the least populated state in the US, is on the financial brink, and now the Biden administration is trying to wean the country off fossil fuels due to the climate crisis.

"We have a little breathing room to establish alternative energy sources throughout Wyoming," she says.

It will be tough, she suggests, even without the influence of politics.

While the state is developing renewable energy, it's currently only a fraction of the tax revenue that fossil fuels bring in. Economists say you'd have to increase wind energy production by 100 times just to match what Wyoming currently brings in from coal alone. State lawmakers are poised to make draconian cuts to state services, with public schools bearing the brunt at up to a forecasted $100 million in losses.

"It's time that we really face up to these facts," said Wyoming Gov. Mark Gordon at a press conference late last year. "Without improvements in our revenue picture these cuts will most likely be permanent."

"Draconian" budget cuts

The governor recently directed the state's lone university to partner with community colleges to modernize workforce training and diversify the economy. But a few days later, he also ordered state agencies to report what the financial impacts of President Biden's leasing ban will be, indicating he'll sue the White House.

Joel Bousman, a commissioner in Sublette County, which includes Pinedale, fears the worst from that new executive order.

"This is happening so fast," Bousman says.

About 90% of all of Sublette County's budget comes from taxes on fossil fuels. And he wishes the new administration would have signaled a willingness for more dialogue and a slow 'winding down' of drilling. Instead, he says, the new leasing moratorium was handed down in the first few days after President Biden took office.

"There has been no information whatsoever coming out of the federal government to say, you know, we're thinking of a moratorium," Bousman says.

Industry scaling back

But even before the ban, companies were scaling back from drilling in western towns like Pinedale, if not pulling out all together because it's cheaper to do business on private land in states like Texas or North Dakota.

A few years ago, a truck stop near the Jonah Field would have been humming with roughnecks, company bosses, and gas well maintenance crews. Instead, it's been mostly deserted for months, says the manager, Roxanne Kroeger. She is trying to work out how much longer she can hold on: "It's very uncertain, nobody knows what's going to happen, now that President Biden's in there."

Biden is pledging to retrain and support traditional fossil fuels workers in states like Wyoming during the transition. Meanwhile, an editorial in Wyoming's largest newspaper pleaded that the country not turn its back on Wyoming workers, especially after all the cheap energy that's been produced and exported out of here for decades.

The possibility of a transition is forcing a question that even just a few years ago might have been considered unthinkable: What is Wyoming without fossil fuels?

Thinking "outside the box"

"The state faces financial ruin," says Justin Farrell, who grew up in Cheyenne and is now a sociology professor at Yale. "In times past it could get by on coal, oil, natural gas production, but those are just not attractive markets any longer."

Farrell's recent book, Billionaire Wilderness, exposes one big new market in Wyoming: luxury real estate. The ultra wealthy are moving to resort areas like Jackson Hole drawn by their beauty, but also their tax shelters. There's no state income or corporate income tax and pretty lax residency requirements.

The mayor of Pinedale, Wyo., Matt Murdock started an alternative energy company in efforts to push the state beyond the fossil fuels industry.
Kirk Siegler / NPR

"Wyoming is happy to tax these similar billion dollar industries like oil and gas," says Farewell. "Why won't they tax this new billion dollar luxury real estate?"

This migration trend has only accelerated during the pandemic, and it has spread to places near Jackson, like Pinedale.

"It is going to require that the state reinvent itself again," says Pinedale Mayor Matt Murdock.

He is trying to push his home state to think outside the box if fossil fuels really are on their way out. Recently, he started an alternative energy company that aims to recycle waste from landfills or even old defunct oil wells and turn it into gas.

"Change has always challenged the status quo," Murdock says. "So we need to do our best to try to steward that and try to direct the change in a way that helps people to make the shift."

National Desk intern Hadia Bakkar adapted this story for the web.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

SACHA PFEIFFER, HOST:

The Biden administration's new climate agenda is forcing states dependent on fossil fuels to do some major rethinking. And we're going to spend some time next in one of those states, Wyoming. Much of Wyoming's economy and budget is built on exporting coal, oil and gas to the rest of the country. The state is expected to sue over President Biden's ban on new oil and gas leasing on federal land. But as NPR's Kirk Siegler reports, the problems there are a lot bigger than what a lawsuit might fix.

KIRK SIEGLER, BYLINE: Not many American towns the size of Pinedale, population 2,000, can boast that they have a $22 million aquatic center, with a beautiful lap pool, waterslides, yoga rooms, this three-story climbing wall - most all of it paid for by tax revenue from natural gas pumped off nearby federal land. The Jonah Field is one of the most productive in the country. The center's opening convinced its now director Amber Anderson to move back home after college as a young professional.

AMBER ANDERSON: And I would not have come back to Pinedale had it not been for this facility. And my family's all here. And I love the outdoors and stuff. But there just wasn't a lot to offer in Pinedale.

SIEGLER: But in the last few years, things have gotten tough. When prices were high, companies drilled a lot. Now there's a glut. Prices tanked. And the pandemic has made that even worse. Locally, people are getting laid off. Anderson had to cut the aquatic center's budget by almost half.

ANDERSON: Yeah, it's kind of scary living in that when we're so heavily dependent on one. Some diversification would probably be a (laughter) positive thing.

SIEGLER: Wyoming's history is one of wild swings between booms and busts. People have been saying for decades that the state needs to diversify.

LINDA BAKER: But the money is so good that people's eyes just glaze over.

SIEGLER: This is Linda Baker. She's an environmental activist here in town. She also spent five years working in the oil patch. For her, this latest bust feels different. Wyoming, the least populated state in the U.S., is on the financial brink. And now there's a new administration in Washington trying to wean the country off fossil fuels due to the climate crisis.

BAKER: And we have a little breathing room to establish alternative energy sources, for example, throughout Wyoming and to convince (laughter) the Wyoming legislature that that's a good idea.

SIEGLER: That'll be tough even if you take politics out of it. The state is developing renewable energy. But right now, it's a fraction of the tax revenue that fossil fuels bring in. Economists say you'd have to increase wind energy production by 100 times just to match what Wyoming currently brings in from coal alone. So state lawmakers are poised to make draconian cuts to state services, public schools bearing the brunt, facing up to $100 million in losses. Mark Gordon is Wyoming's governor.

(SOUNDBITE OF ARCHIVED RECORDING)

MARK GORDON: It's time that we really face up to these facts. Without improvements in our revenue picture, these cuts will most likely be permanent.

SIEGLER: The governor did recently direct the state's lone university to partner with community colleges to modernize workforce training and diversify the economy. But a few days later, he ordered state agencies to report what the financial impacts of President Biden's leasing ban will be, indicating he'll sue the White House. In Sublette County, which includes Pinedale, Commissioner Joel Bousman is fearing the worst from that executive order.

JOEL BOUSMAN: This is happening so fast, it just - I guess the statement I'd use, it blows my mind.

SIEGLER: About 90% of all of Sublette County's budget comes from taxes on fossil fuels.

BOUSMAN: There has been no information whatsoever coming out of the federal government to say, you know, we're thinking of a moratorium. We would like to slowly wind down natural gas and coal and fossil fuels and, you know, everywhere.

SIEGLER: But even before the ban, companies were scaling back from drilling here, if not pulling out altogether. It's just cheaper to do business on private land in states like Texas or North Dakota. The fallout looks startling.

(SOUNDBITE OF MACHINE HUMMING)

SIEGLER: A few years ago, this truck stop by the Jonah Field would've been humming with roughnecks, company bosses, gas well maintenance crews. Instead, it's been mostly deserted for months, says the manager, Roxanne Kroeger.

ROXANNE KROEGER: I know there's a number of businesses that have had to fold, which is sad.

SIEGLER: She's hunched over a small desk back in a tiny office trying to work out how much longer she can hold on.

KROEGER: It's very uncertain. Nobody knows what's going to happen now that President Biden is in there. Nobody knows.

SIEGLER: Biden is pledging to retrain and support traditional fossil fuels workers in states like this during a transition. In an editorial, Wyoming's largest newspaper pleaded that the country not turn its back on Wyoming workers after all that cheap energy that's been produced and exported out of here for decades. Now, all of this is forcing the question that even just a few years ago would've been unthinkable here, what is Wyoming without fossil fuels?

JUSTIN FARRELL: The state faces financial ruin. And, you know, in times past, it could get by on coal, oil, natural gas production. But those are just not attractive markets any longer.

SIEGLER: Justin Farrell grew up here and is now a sociology professor at Yale. He wrote a book exposing one big new market in Wyoming, luxury real estate. The ultra-wealthy are moving to places like Jackson Hole, drawn by the beauty, but also the tax shelters. There is no state income or corporate income tax and lacks residency requirements.

FARRELL: Wyoming is happy to tax, you know, these similar billion-dollar industries like oil and gas. So why won't they tax this new billion-dollar luxury real estate industry and the newcomers, you know, buying these $10 million properties and enjoying the natural resources?

SIEGLER: This trend has only accelerated in the pandemic. It's also spreading to places like Pinedale. The town's mayor, Matt Murdock, is trying to push his home state to think outside the box if fossil fuels really are on their way out.

MATT MURDOCK: It's going to require that the state kind of reinvent itself again.

SIEGLER: Murdock recently started an alternative energy company. It aims to recycle waste from landfills or even old defunct oil wells and turn it into gas.

MURDOCK: Changes always challenge the status quo. And that makes people uncomfortable. And they get mad. They get angry. Sometimes I think they beat their chests and they scream at things that they really have no power over. So we need to do our best to steward that and try to, you know, direct the change in a way that helps people to make the shift.

SIEGLER: Stewarding a transition in a state where fossil fuels and booms and busts are basically embedded in its DNA.

Kirk Siegler, NPR News, Pinedale, Wyo.

(SOUNDBITE OF ROB LEVIT'S "THE FORGOTTEN SONG") Transcript provided by NPR, Copyright NPR.