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How Wyoming will be impacted by landmark federal climate bill

A man in a hard hat and fluorescent vest kneels by a solar panel.
Creative Energies Solar
A solar technician performs service work on the roof of the Jackson Hole START bus barn.

President Biden recently signed into law a bill that could shape the future of energy in states like Wyoming, and so far it is polarizing amongst energy leaders in the state.

The Inflation Reduction Act is a dense 750 pages. It addresses everything from health care to taxes to climate and energy, which for Wyoming as the energy state, the latter is a main point of focus.

Tackling greenhouse gasses 

The bill includes more than $360 billion intended to address climate change, making the largest investment ever in reducing climate warming pollution.

“It’s [the bill] really kind of a once-in-a-generation opportunity to tackle the climate crisis,” Shannon Anderson, a staff attorney and organizer for the Powder River Basin Resource Council.

The council sees advantages to the state diversifying its energy industries, and it thinks this bill will help.

“It’s focused on the need for our nation to really reduce the carbon pollution that comes from our electricity sector,” Anderson said.

According to some analysts, the bill will help reduce greenhouse gas emissions by 40 percent in the next decade, compared to 2005 levels. Which is a big step, especially for Wyoming, said Anderson. The state is a top producer of natural gas, oil and coal, making it also a top emitter of greenhouse gasses.

“It does require us to be present and at the table in a very meaningful way,” Anderson said. “Because the window of opportunity for Wyoming is shrinking.”

How the energy industry feels

The state of Wyoming is aware of the need to tackle a warming climate. Governor Mark Gordon pledged to a net-zero emissions plan, which includes keeping the fossil fuel industry alive while trying to eliminate related pollution. The state has invested heavily in carbon capture and storage technology that supposedly can capture the pollution, but its effectiveness is highly debated.

Industry leaders, such as the Petroleum Association of Wyoming (PAW), support the state’s efforts. However, they do not support the new bill.

PAW Vice President Ryan McConnaughey said the legislation tackles emissions by favoring renewable energies and tearing down the fossil fuel industry.

“We see a lot of things that are going to make it much more difficult to produce on federal lands, which will disproportionately affect Wyoming, given our reliance on federal lands for production here in the state,” McConnaughey said.

For example, McConnaughey said the bill will increase royalty rates on federal land production, meaning companies will have to pay the government more money every time they sell oil, gas or coal produced on federal land. Previously the rate was 12.5 percent, now it will be a minimum of 16.66 percent.

It is not that the industry cannot produce anymore, it is just going to be more expensive to operate.

Mike Pence
Mark Ralston
/
AFP/Getty Images

At the Rockies Petroleum Conference that was held in Cheyenne recently, there was similar sentiment.

“American energy is under attack,” said former Vice President Mike Pence, who spoke about the bill at the conference. “The left wants to drive the cost of energy from traditional sources so high to move us toward this ideal that they have of renewable energy.”

However, many experts suggest the bill gives incentives to both the fossil fuel and renewable industries. In fact, it actually locks the two together.

For every solar or wind project on federal land, the government has to offer up new oil and gas leases, basically guaranteeing production on public land for at least the next 10 years.

Renewable businesses stand to benefit 

Rather than directly stopping fossil fuel production, there are tax incentives for renewable projects. Scott Kane, co-owner of Creative Energies Solar, said he hopes this will get more Wyomingites to make the switch to solar. Kane’s solar company has been in operation since 2001.

“In Wyoming, often our challenge has been to open up people's mindset to the benefits of converting to a clean energy economy,” he said. “It's been a long haul.”

One incentive includes a 30 percent tax credit to people or companies who choose to go solar.

“The more people there are that are willing to invest in solar, that's the part that's good for business.,” Kane said.

Kane added that he knows Wyoming has a long, proud history with energy, specifically oil, gas and coal. He said he thinks Wyoming can still be the energy state, but just in a different way.

Solar Panels on a roof overlooking green grass and a gray barn.
Creative Energies Solar
A recently completed solar power system on a home in Lander.

“And I'm hoping that, you know, with this new bill, with each passing month of more solar going up on more roofs around the state, that people begin to see this as being part of the fabric of Wyoming,” Kane said.

The Impact

Meanwhile, the fossil fuel industry fears the bill could potentially limit operations.

It is still unclear how everything will shake out. Anderson, with the Powder River Basin Resource Council, said there is a lot of new language in the bill that will likely require some follow-up legislation. It is also possible there could be court challenges to the new bill in the future.

However, for individuals the impact may be felt as soon as the upcoming tax season, when Wyomingites could get more money back for things like solar and electric vehicles.

Caitlin Tan is the Energy and Natural Resources reporter based in Sublette County, Wyoming. Since graduating from the University of Wyoming in 2017, she’s reported on salmon in Alaska, folkways in Appalachia and helped produce 'All Things Considered' in Washington D.C. She formerly co-hosted the podcast ‘Inside Appalachia.' You can typically find her outside in the mountains with her two dogs.
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