Why coal-rich Wyoming is investing big in wind power
| Rawlins, Wyo.
It’s a sunny day in early November in southern Wyoming, but the wind is blowing so hard that opening a car door is a chore. Signs on the interstate warn of gusts topping 70 miles per hour, and semi trucks have pulled over all along I-80. It’s difficult to hear a word Bill Miller says as he steps out of his truck at the top of a rise on the Overland Trail Ranch to describe the development taking place on the expanse below him.
Of course, that fierce wind is exactly what makes this pocket of the West so desirable for that development. The Chokecherry and Sierra Madre Wind Energy Project is slated to become the largest wind farm in the United States once it’s up and running. And it’s causing some in Wyoming – a state whose economy has been devastated by the decline of its bedrock fossil fuel industries – to rethink their attitude toward renewable energy.
The 3,000-megawatt project near Rawlins is emblematic of a growing industry that is hitting its stride, and is fueled less by ideology than by economics. Gone are the days when wind power advocacy fell exclusively to liberals and environmental advocates. As the economics of wind power have become more viable, many staunch conservatives have come to view the industry as a fiscally responsible component of a diverse energy future. The Chokecherry and Sierra Madre project is bankrolled by Philip Anschutz, a Denver billionaire who made much of his fortune in the fossil fuel industry, is a major Republican donor, and is hardly a poster child for renewable-energy idealism.
“We’re in the resource business,” says Mr. Miller, a native Wyomingite with a trim grey beard who grew up on a ranch and has worked for The Anschutz Corporation for 37 years, mostly on oil and gas projects. He now runs both the Power Company of Wyoming and the TransWest Express Transmission Project, the two Anschutz subsidiaries behind the wind farm and the transmission line that will carry its electricity from the expanses of Wyoming to urban California and the desert Southwest. “I try to ignore the political, ignore the policy, and think about it from an economic point of view.”
Anschutz already owned the 500-square-mile working cattle ranch where the new wind farm is being built, and as Miller drives its bumpy roads, up to a plateau overlooking the site, with Elk Mountain rising in the distance, he points to the primary reason this project made sense: “This is, without exception, the best wind resource anywhere in the US.”
For a state with such strong winds, Wyoming has actually been slow to enter the wind market. That honor goes to the Plains states like Texas, Iowa, Oklahoma, and Kansas. Many of those states – which are generally conservative, and supported Donald Trump in 2016 – generate a significant portion of their power from wind.
When Kansas legislators voted two years ago to do away with its renewable portfolio standard mandating that 20 percent of the state’s electricity come from renewable sources by 2020, it was largely a symbolic action; more than 20 percent of Kansas’s power already came from wind energy by 2014. Today, about 30 percent of its electricity generation comes from wind.
“A combination of the [federal] tax credit and improving technology has made wind very cost effective,” says John Nielsen, clean energy program director at Western Resource Advocates in Boulder, Colo. One of the biggest barriers to development has been a lack of transmission and an antiquated grid system, but Mr. Nielsen and others say that once there’s more regional connectivity, wind can become an even larger player.
One key driver for the spike in wind has been the growing demand from companies and states looking for cleaner energy and climate solutions. That ideologically driven investment has propelled the industry toward an economy of scale that appeals to fiscal conservatives.
“In a lot of these more conservative states the driver is the economics,” says Nielsen. “Ten years ago, the barrier to renewables was that they were more costly. Now, the barrier to really large-scale penetration is the existing system, that it’s not as flexible as it could be to integrate these resources.”
Economic sense
Wyoming, despite its fierce winds, ranks 15th in wind capacity among US states. That’s a result of several factors: a lack of adequate transmission lines, particularly given that coal plants generally have the right of first transmission; ambivalence from residents who worry about the effect on treasured views or on the state’s iconic eagles; and marked antipathy from some Wyomingites who see wind as a threat to the coal, natural gas, and oil that have long been the bedrock of Wyoming’s economy. That antipathy is part of what drove the state to enact a $1-per-megawatt-hour tax on wind power – one of just two states to tax wind energy – and to repeal its sales-and-use tax exemption for utility-scale renewable-energy equipment. Between 2010 and 2016, when the US wind industry grew by more than 100 percent, wind in Wyoming grew by just 5 percent, with just one 80-megawatt project added.
But that’s changing. Along with the Chokecherry and Sierra Madre project, Rocky Mountain Power has announced plans to add at least 1,100 new megawatts of wind power by 2020, mostly in Wyoming. Viridis Eolia, a proposed wind farm near Medicine Bow, Wyo., just 50 miles east of Rawlins, would add nearly 2,000 megawatts of wind power if completed. The power company is also developing improvement projects to boost existing infrastructure and wind power capacity, including a new transmission line and a “repowering” of existing wind turbines with longer blades.
“It is a necessary part of Wyoming’s economic future,” says Jerimiah Rieman, director of Economic Diversification Strategy and Initiatives in the Wyoming governor’s office.
Wyoming, in many ways, is at an inflection point economically. Its economy has been hit hard by the downturn in coal, at the same time as prices for oil and natural gas have also dropped.
“It was kind of a perfect storm,” says Jonathan Naughton, director of the Wind Energy Research Center at the University of Wyoming in Laramie, speaking about the forces hitting Wyoming’s economy. “And the thing that’s starker in Wyoming is how much of our economy is extractive-mineral-based.”
Against that backdrop, wind is one of the few potential bright spots. The two fastest-growing jobs in America are solar panel installers and wind turbine technicians. Both are projected to more than double in the next decade, growing more than twice as fast as any other profession. The construction of big new projects promises both direct and indirect jobs for the duration of the construction. And while the actual number of permanent jobs at new wind farms is relatively small – certainly not equal to the coal and gas jobs being lost in the state – it’s one of the few industries in Wyoming that promises any growth, and those jobs can make a big difference locally.
If 6,000 new megawatts of wind is added to Wyoming, it could mean upwards of $2 billion in new tax revenue over 10 years for the state, more than $10 billion in new investment, and about 50,000 new job-years of employment, says Robert Godby, an economist at the University of Wyoming who helped author a study on the potential impact of wind energy in the state.
“It doesn’t fill the gap that has been left by coal, but it’s not zero, it’s a significant amount,” says Professor Godby. “In places like Medicine Bow or Rawlins, it could make all the difference in the world.”
Seeing hope in the wind
In Wyoming's Carbon County – home to both those towns, and named for its former coal mines – wind turbines are already a common sight, dotting the horizon all around Medicine Bow, and spinning rapidly amid the strong gusts.
“They grow on you for sure,” says Laine Anderson, director of wind operations for Rocky Mountain Power, as he drives among the turbines at the company’s Seven Mile Hill Wind Project. Like most Wyomingites, he used to curse the wind, Mr. Anderson notes. Now, he sees it differently. “It’s pretty amazing to see them spin, and know they’re not polluting, not costing any extra for fuel.”
And in Rawlins, a town of just under 10,000 in high desert sagebrush country, some residents are hopeful about the jobs the new wind farms may usher in.
“We don’t want all our eggs in one energy basket,” says Shawn Dahl, the fast-talking owner of Buck’s Sports Grill, which features photos of local sports and history on its walls and a “wind turbine” burger on its menu. “If you’re not three years ahead, you’re already 10 years behind.”
Still, plenty of obstacles in Wyoming remain. Some residents are fiercely opposed due to the viewshed, the extensive range from which the soaring turbines can be seen. (Not only do the turbines shoot up 200-300 feet into the sky, but aviation rules require lights at night, which might be seen 50 or 100 miles away in these open spaces.) Others are concerned about threats to wildlife. Wyoming has critical greater sage grouse habitat, and the state has excluded wind development in those corridors, since the turbines can have a negative effect on breeding. There are also the birds killed by blades. “We’re not killing sparrows in Wyoming. We’re killing eagles and hawks,” says Professor Naughton. “The public places a higher value on raptors than other birds.”
Proponents argue that most of these issues can be dealt with through conscientious siting and conservation efforts. Miller notes that he’s redesigned the Chokecherry and Sierra Madre farms five times as he’s worked to get the permitting done. The process has taken nearly 10 years and has been far more onerous and expensive than he anticipated. Along the way, he has focused on minimizing viewshed disturbance, and gathering and using the best possible research and studies about sage grouse, raptors, and other wildlife.
“I would not call us environmentalists, but we’re really good conservationists,” says Miller.
An even bigger obstacle to wind development has been uncertainty around taxes. The generation tax levied on wind power in 2010, combined with the 2009 elimination of the sales-and-use tax exemption, will cost the project an additional $440 million more in taxes over its economic life, says Miller – more than twice what was anticipated. Periodic attempts by some state legislators to raise that generation tax from $1 per megawatt-hour to $3 or even $5 per megawatt-hour likely would have killed it. Those efforts were defeated, and Miller and others say there seems to be much broader recognition on the part of both lawmakers and the governor of the self-inflicted harm Wyoming would do to itself economically if they were to price wind out, but the debate is not over.
“The attitude about the wind resource opportunity in Wyoming has done a significant shift in recent years,” says Miller, noting that he’s spent countless hours with county commissioners, state legislators, and other wind skeptics. “The state of Wyoming does have significant issues with their funding. But you can’t cure what’s happened to coal industry by taxing the wind industry out of the business.”
Beyond the coal v. wind mentality
Loyd Drain has been a tireless advocate for wind in Wyoming, especially during the five years he led the Wyoming Infrastructure Authority before stepping down to return to Texas as an energy consultant. It drives him crazy to hear detractors who see wind as the enemy of coal. Texas, he notes, is “a huge fossil fuel state,” but has had no problem also embracing wind – and has benefited from the boom as a result.
“It takes decades to diversify a state’s economy,” says Mr. Drain. “There will come a day when that last coal train leaves Wyoming.”
And when Drain (who also serves as a consultant to the proposed Viridis farm in Medicine Bow) looks at the steady drop in costs for wind, he thinks it’s only going to grow – especially if America’s antiquated grid system ever gets overhauled.
“I have no problem saying I’m a climate denier, because I am,” says Drain. “But if you give me the choice of buying coal, natural gas, solar, or wind, because of economics, because of my pocketbook, hands down I’m choosing wind.”
