The Wyoming Infrastructure Authority has developed a reputation for touting the Cowboy State’s wind resources.
But starting in July the agency will assume an additional responsibility: hawking coal, or, more specifically, coal exports. State lawmakers expanded the authority’s purview during the recent legislative session to include the promotion of coal export docks.
Such facilities are viewed as critical to Powder River Basin coal producers’ ability to tap Asian markets, but have met fierce opposition from environmentalists. Three terminals have been proposed for the Pacific Northwest. None have yet to receive the green light from regulators.
Under its expanded role, the WIA will advocate for coal export terminals and may even provide some of the necessary financing. The agency has bonding authority up to $1 billion but thus far has used only $50 million.
“The infrastructure authority is charged with growing the state’s economy through the development of electric transmission. There is a natural fit between the current work of the authority and expanding coal markets,” said Renny MacKay, a spokesman for Gov. Matt Mead. “The governor believes there is opportunity for Wyoming, which can be enhanced by the infrastructure authority’s involvement.”
The lawmaker behind the expansion bill is Rep. David Miller, a Riverton Republican who sits on the board of an Australian company that has the stated purpose of exporting North American coal.
Miller, a professional geologist with mineral holdings throughout the state, became a County Coal Limited board member in 2011 after selling his mineral rights in the Powder River Basin to the Sydney-based company for $200,000.
He told the Gillette News-Record that year he received 1 million shares in the company and would receive 3 percent royalty on any coal production. And he promised to abstain from any votes in the Legislature concerning the company’s interests.
On Wednesday, Miller said there was no connection between County Coal interests and the WIA legislation.
“That particular company is not worried about Wyoming coal. They haven’t even been to Wyoming,” Miller said, adding that much of County Coal’s focus has been in Canada.
Instead, Miller said, the intent of the legislation is to help preserve Wyoming’s tax base. Much of the state’s revenue is generated by severance taxes on coal production. And with American utilities moving away from coal in favor of natural gas because of stricter environmental regulations, Asia represents the best opportunity to sell Wyoming coal, he said.
Originally, Miller hoped to use $300 million in surplus state funds to build an export terminal in the Pacific Northwest. But when the state’s lawyers told him that wasn’t possible, he settled on the expansion of the WIA’s responsibility as the next best alternative.
Miller said he hoped the state commitment helps spur private investment in coal export facilities.
“I think industry is going to take note Wyoming is serious about this and will move a little faster,” Miller said.
Weak disclosure laws
Legislative observers said they were not familiar enough with the legislation or Miller’s business interests to comment on whether the measure constituted a conflict of interest. But the case does highlight the Legislature’s weak public disclosure laws, they said.
Erich Frankland, chair of the Casper College political science department, said most states require lawmakers to divulge their business interests, and some require legislators to abstain from votes in which they have a personal interest. In Wyoming, such disclosures are voluntary.
“That is one of the things with our state law. There are a lot of gray areas,” Frankland said. “It does encourage self-interpretation.”
Situations like Miller’s are inevitable in a citizen legislature, said Equality State Policy Center Executive Director Dan Neal. Many legislators have extensive business interests in the state, he noted.
Wyoming would benefit from clearer rules spelling out what constitutes a conflict of interest, he said. The public would know if lawmakers’ votes are enriching their financial interests and legislators would have added clarity of what constitutes a conflict of interest, he said.
“This doesn’t begin with Dave Miller or end with Dave Miller,” Neal said. “We would like to see the Legislature tackle this. If we are going to stick with a citizen legislature, how are we going to deal with this?”
Attempts to reach County Coal on Wednesday were unsuccessful. The company’s website listed two coal projects in the Powder River Basin – Shell Creek and Miller – with combined estimated reserves of 730 million tons of “low cost, export-quality” coal. The company also said it is submitting plans to construct a 20 million ton loading terminal in British Columbia that “can be used by Powder River Basin, U.S. coal projects.”
Miller said he did not think the WIA legislation constituted a conflict of interest. The expansion of the infrastructure authority’s responsibilities deals with the industry at large, not a specific company or area from which he would profit, he said. In that sense, his proposal was similar to a teacher or college administrator serving in the Legislature voting on raises for public employees or pension increases, he said.
And he expressed doubts over County Coal’s ability to construct an export facility, saying “I don’t think they have the wherewithal to do that. It would be someone like Peabody, Rio Tinto. A small company doesn’t have the wherewithal to bite off something that big.”
But he acknowledged Wyoming’s conflict of interest rules can be unclear. Miller said he abstained from votes in the past that would affect his mineral leases, prompting questions from the House’s Republican leadership and industry.
“They want me to vote for what I think is best for Wyoming, which is what I do,” he said. “It is a gray area, I admit. It is confusing what to do in those circumstances.”
Meanwhile, the infrastructure authority is preparing for its new role of promoting coal and wind. Loyd Drain, the authority’s director, said the agency has been meeting with key players in industry and government to prepare a strategy so it can begin work on July 1, when its coal responsibilities commence.
And where some might see a conflict simultaneously promoting a renewable like wind and a fossil fuel like coal, Drain embraced the role.
“I don’t find representing the horizon of Wyoming’s resources, I don’t find that to be problematic,” Drain said. “Our state is so blessed with a variety of resources [that] we would be remiss if we didn’t try to market all of them.”