You can’t make this stuff up. The Wyoming state legislature—ostensibly one of the most conservative deliberative bodies in North America—has embraced full-on socialism for the coal industry. From The Branding Iron, the student paper at the University of Wyoming:
A budget amendment making its way through the Wyoming legislature could grant the Wyoming Infrastructure Authority (WIA) the power to pursue projects like coal ports in other states…The bill also provides $1 billion in bonds to the WIA for the express purpose of pursuing infrastructure projects, like coal ports.
So the allegedly die-hard conservatives in the Wyoming legislature want to commit a billion dollars in bonding authority, backed up by financial resources of the state government, specifically to build coal export facilities that the private sector itself won’t fund. And even though they residents of Wyoming would ultimately bear the risk from a failed infrastructure project, they even want to the bond money out of state, to build projects in Oregon or Washington.
If that isn’t a prime example of what conservatives profess to hate, I don’t know what is.
It’s easy to see why Wyoming legislators are so panicked about the state’s coal industry. Coal output in the state has fallen by double digits since the 2008 peak. Domestic coal prices remain weak, pulled down by cheap natural gas and by reduced coal demand by domestic utilities.
Meanwhile, the international coal market—which once seemed to hold promise for reviving Wyoming’s coal fortunes—is in a shambles. Asian coal prices are now so low that there’s simply no way for a private company to ship coal from the southern PRB to Asia at a profit. Heck, even Cloud Peak’s export operations, using higher-quality Montana coal, are hemorrhaging millions of dollars per month at today’s prices.
[prettyquote align=right]It’s no wonder that the private sector is steering clear of coal port investments.[/prettyquote]So it’s no wonder that the private sector is steering clear of coal port investments.There’s just not enough money in exports, and the risk of bankruptcy is just too high.
Yet even though the market has spoken, the “conservative” Wyoming legislature thinks it knows better. They’re perfectly fine with using the government authority to foist massive financial risks onto the residents of the state. And they’re fine with spending bond proceeds out of state in ways that minimize the benefits to Wyoming residents.
And for a state as small as Wyoming, a billion dollars is a lot of money: almost $2,000 for every man, woman, and child in the state. It’s also a lot of money for the coal industry: a billion dollars is enough to buy three of Wyoming’s largest coal companies—Arch Coal, Alpha Natural Resources, and Cloud Peak—with lots of money to spare. Which means that Wyoming is planning to put up a sum that represents a significant share of the total value of the US coal industry on a bet that the rest of the private sector won’t touch.
You don’t even have to imagine what would happen if, say, the federal government were to do something similar for renewable energy projects. After all, Wyoming politicians were among the fiercest and most vocal critics of the US Department of Energy’s loan guarantees to the ill-fated Solyndra venture.
But for coal, Wyoming legislators are all in favor of shameless doses of corporate welfare. It’s enough to make you think that their rock-ribbed conservative rhetoric is nothing more than cover for old-fashioned graft.
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