Federal government shut downs and financial breaks to the fossil fuel industry have Wyoming lawmakers worried about the state’s bottom line.
Making their way through the Legislature are two resolutions, which are formal asks of Wyoming’s Congressional delegation to take action. Resolutions can’t change law themselves and have been described as a “formal opinion” by one Wyoming lawmaker.
HJ 2, Federal mineral royalties-state share, would increase Wyoming’s split of federal mineral royalty rates from a little less than 50% to 87.5%, leaving 12.5% for the feds. These royalties are paid by companies when they take coal, oil or gas out of the ground on federal lands. Wyoming’s share of the revenue helps fund schools, roads and local governments.
Royalties sparked lawmakers’ attention this summer in the interim after the GOP policy bill, known as the One Big Beautiful Bill Act, was signed into law by Pres. Trump. It lowered royalty rates for fossil fuel companies, meaning they will pay less for the resources they extract. The hope is it’ll incentivize more business. But it also means less immediate revenues for Wyoming, which is a top producer of coal, oil and gas.
Specifically, the act cut coal royalty rates by nearly half through 2034. Economists crunched the numbers and estimated that’ll be a roughly $50 million cut to Wyoming annually.
To avoid that loss, the Legislature’s Federal Natural Resources Committee wants to formally ask Congress to beef up Wyoming’s share of those royalties. Currently, most U.S. states have what Wyoming has now, about a 49% cut of the pie.
Lawmakers noted that since it’s a resolution, it won’t change anything unless Congress takes action.
“I doubt this will get any traction, but if you don't throw a ball out there, you'll never know,” said Rep. Bob Davis (R-Baggs).
HJ 2 is making quick progress through the House, passing out of committee on Tuesday and second reading in the House on Thursday.
Also spawning out of federal government woes is SJ 1, State management-federal mineral leases. It asks Congress to introduce a bill to give Wyoming the authority to manage mineral leasing on federal lands in the state.
“The idea was if we get in a situation where we have the [federal] government shut down, that has the potential to have dire consequences for us,” said Rep. Bob Wharff (R-Evanston) while presenting the resolution to the Senate Minerals, Business & Economic Development Committee on Feb. 11.
During a government shutdown, there’s a risk of federal lease sales for energy development to be paused. Last fall, a federal coal lease sale in Montana still happened during the government shutdown. But a Wyoming sale was postponed and has yet to be rescheduled.
Some Wyoming lawmakers think that if the state can administer the sales, a federal government shutdown wouldn’t be a factor.
“Basically allow the state of Wyoming to still function even if our federal government shuts down,” said Wharff.
Wharff noted that state lawmakers sent a letter to Wyoming’s congressional delegation this summer with a similar request.
“The letter that they [state lawmakers] got back kind of offended us a little bit,” Wharff said. “It came from a staffer who just said, "Yeah, [if] we get time. We'll look at it."”
Wharff said passing this resolution would be a more direct ask.
Some lawmakers, along with the Wyoming Wilderness Association, voiced concern that managing the lease sales would be too great of an administrative burden for Wyoming.
“This is one of those really good ideas that's, as presented, is pretty much a pipe dream,” said Sen. Ed Cooper (R-Ten Sleep).
But Wharff said he thinks it’s an opportunity to prove that Wyoming can take on federal lands.
“So that if in fact the federal lands are ever transferred to the state, that we've demonstrated to the people that live here that we can responsibly manage the lands that are entrusted to this state to be managed for the people,” Wharff said.
An amendment was passed to address concerns. It clarified that Wyoming would only take over leasing for lands agreed upon with the federal government and that the state would be compensated for administrative costs.
The committee passed SJ 1, and it’ll now go before the full Senate for a second vote.
