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A potential developer of the Two Elk site carries some baggage from Montana

A firm with a checkered history in Montana is part of a group hoping to buy the vacant site that was once intended for Two Elk, a failed energy project that drew in state and local leaders, universities and federal money before ending in fraud charges for its primary developer.

Black Diamond Holdings is part of a group, Wyoming New Power, looking to license and build a coal treating facility on the Two Elk site in Campbell County. But Black Diamond owes about $19 million in reclamation bonds and $5 million in local taxes in Montana stemming from an idle gold and zinc mine that the company is trying to bring back online.

The new facility would dry out Powder River Basin coal, making it burn hotter so developers can sell it for a higher price. The higher-quality coal has a better chance of competing in the global market, proponents say.

The online magazine WyoFile first reported Tuesday that the managing director of Black Diamond, Patrick Imeson, petitioned Campbell County commissioners Monday for $100 million in industrial development bonds as part of the effort to build the facility.

Imeson told the Star-Tribune his company’s Montana operations should not cast a negative light on the firm’s involvement in Wyoming. The company knowingly inherited the mine’s debt when it bought the company. Buying distressed properties to flip is part of his companies’ portfolio, while the bonds are simply a way to attract investors to a potential boon for the Cowboy State, Imeson said.

“Sometimes you don’t run businesses that are free and easy,” he said of the gold mine. “We are trying to do some good things in Wyoming.”

Wyoming is allocated millions of dollars in tax-exempt bonds every year to spark investment in local projects that are often unused.

The previous occupier of the Two Elk site successfully sought those bonds, but they came to nothing.

Failed project

More than two decades ago, developer Michael J Ruffatto seized on the idea to find new uses for waste coal. Over time, the project morphed into another titillating venture, jumping on the carbon capture research trend. Despite a number of high profile partnerships, federal grants and tax-exempt bonds courtesy of Wyoming, nothing came of the hype except a bad reputation.

Two Elk was proposed in 1996 as a 300-megawatt power plant that used waste coal. The project was plagued by delays and questionable spending of state and federal funds.

The saga is now limping to a close. Ruffatto admitted last year to defrauding the federal government out of millions to pay for his lavish lifestyle. Sentencing has since been postponed five times at the request of Ruffatto’s lawyer as the developer attempts to pay back the federal government. The hearing is now set for Jan. 31.

As of now, the site is little more than a windswept plain with some active storage drain permits and concrete pads. But it’s centrally located in the heart of coal country.

New life?

Enter Wyoming New Power, a group of partners that filed as a business in the state in early 2017. The group announced months later that it was raising $80 million in financing, with the help of investment bank Piper Jaffrays, to lease a coal upgrading technique and build a facility in Wyoming. The construction is likely to be done by Kiewit Corp, according to New Power. Kiewit is the parent company of the Buckskin mine in the Powder River Basin and has dabbled in coal drying techniques before.

A spokesman for Kiewit’s infrastructure arm was unfamiliar with the project and deferred comment to the mining group, which did not return a call for comment.

Coal upgrading techniques have been floated in Wyoming before, but so far have failed to result in a successful business opportunity for the state’s coal sector. The drying technique may be feasible, experts say, but has run into issues with large-scale treatments. Dried coal can self-combust when it reabsorbs moisture.

Clean Coal Technologies, which would lease its technique to Wyoming New Power, says it has cracked the code with a test facility in Oklahoma that uses Powder River Basin coal. Black Diamond has been a significant investor in Clean Coal Technologies for years.

CEO Robin Eaves said the troubled history with Two Elk has no bearing on his company, which is simply licensing the technology. New Power, meanwhile, is simply looking for a site to do business, he said.

“Wyoming New Power has some pretty reputable guys from Gillette in the company and Piper Jaffray behind them,” Eaves said. “So, I think that anyone that tries to make a story out of the background of Two Elk is really on the wrong track.”

Building the coal facility there takes an ugly story and turns it around, he said.

Eave’s company recently partnered with the University of Wyoming’s School of Energy Resources to further develop its technology.

The university’s Richard Horner said in a statement last month that the school had done its due diligence considering Clean Coal Technologies and believed the company’s aims could fit well within coal refining studies that the school was doing.

Decision pending

The Campbell County commissioners have not agreed to the bonding request yet. They are waiting to review New Power’s final application.

Campbell County Commissioner Mark Christensen said he didn’t see a reason why the bonds wouldn’t go to New Power. Imeson’s assurances to the commission that the new venture has no ties to Two Elk or Ruffatto satisfied his chief concern.

“I don’t think there is necessarily reluctance,” he said of the commissioners’ stance. The bonds don’t make the county liable for anything. Two Elk is one of a handful of ventures that have sought the bonds at no risk to the taxpayers or local government, he said.

Christensen was not aware of Black Diamond’s dealings in Montana.

The state of Wyoming, Campbell County and the city of Gillette have invested in a number of local businesses that are looking at other uses for coal or ways to improve its viability given the recent downturn. Coal also faces challenges from competitive fuels, like natural gas, and environmental regulations.

The county commission has scheduled a decision on the bonds for its Nov. 21 meeting. New Power has until Dec. 10 to file its application with the state.

As for Black Diamond’s gold mine, the company is working through the liabilities it owes, Imeson said. Its officials are hopeful that the market has improved and that the Wyoming project will soon get off the ground.

“We’ve shown a commitment to Clean Coal Technologies through some very adverse times (for the coal sector),” he said. “We took on a fairly high risk … and we think it has huge benefits.”

Grown in Wyoming launches to promote local foods

A variety of meat, fish and cheese are for sale at the Grant Street Grocery and Market in Casper, but none of it was raised or produced in the state, according to co-owner Lindsey Grant.

Salsa and a honey-vinegar sauce are the only Wyoming items are sold by the specialty market, but Grant said she hopes that will change. She would actually prefer to stock food from local farms and ranches — provided they follow all the proper regulations — because she wants to support the state’s economy.

“I am very interested in locally-made products, if we increase their availability,” she said.

Grant isn’t the only one intrigued by this idea.

The demand for local products is growing, which is why the Wyoming Business Council recently launched Grown in Wyoming, according to a press release from the council. Local producers who join the program will receive market exposure through consulting, promotion and brand campaigns, and will be featured in materials directed toward grocery stores and restaurants.

The council also encourages retailers and restaurants looking to purchase locally-sourced foods to use the program to connect with producers.

Briana Tanaka, the council’s agriculture and international trade coordinator, said Wednesday that the state has plenty of local products to offer.

“Beef is one of our greatest commodities,” she said. “We also produce a lot of sugar, and we have distilleries and wineries and breweries coming into the state that are using local wheat and grain in their products.”

The ultimate goal of the program is to keep more money in the state, which fits in with the council’s mission to increase economic prosperity in Wyoming, said Tanaka. The council has already received positive feedback on the program, which started two weeks ago.

Jim Magagna, the executive vice-president for the Wyoming Stock Growers Association, said he thinks many local producers could benefit from having their products promoted.

“I think we are very excited to see [this program],” he said. “So much has changed in marketing products today.”

Magana said there’s “no question” that the demand for locally produced food is growing, especially among the younger generations. Many people like to know where their food is coming from, and appreciate the fresher quality of local products.

Annual membership fees are currently $35, but will increase to $100 in August, according to the program’s website. Those interested in becoming members can visit the website at

Wyoming governor says 'economic storm' over, better days ahead

CHEYENNE — New signs of life in the fossil fuels extraction industries mean Wyoming has weathered an economic storm and better days lay ahead, Gov. Matt Mead said at an economic form Wednesday.

An economist was less optimistic Wyoming is making a full comeback after the latest downturns afflicting coal, oil and natural gas.

“At best we’re at a new normal. More likely we’re at a slow decline,” Rob Godby, director of the Energy Economics and Public Policies Center at the University of Wyoming, said when asked about the governor’s assessment.

Wyoming officials continue to adjust to falling state revenue from fossil fuels — down by almost 20 percent from four years ago. Still, Mead struck an optimistic tone at the annual Governor’s Business Forum hosted by the Wyoming Business Alliance.

“A difference a year makes is incredible. And I’m confident when I say that Wyoming has weathered the storm. We were at bottom and we’re coming back,” Mead said.

Wyoming is the top coal-producing state and Mead pointed out three major coal companies — Peabody Energy, Arch Coal and Alpha Natural Resources, which has been restructured in Wyoming as Contura Energy — are now out of bankruptcy.

Wyoming’s economy also relies heavily on petroleum development and Mead said oil and gas activity is up after drilling all but stopped.

“In visiting with oil and gas companies, the investment they are making now and the investment they are going to make next year is going to right the ship in the state of Wyoming,” he said.

Even so, Mead said, Wyoming shouldn’t always be bracing for the next economic bust but look to technology to diversify its economy.

“Let’s once and for all take away any doubt that Wyoming can control its destiny,” Mead said.

President Donald Trump has positioned himself as a champion of the coal industry, stopping a federal coal-leasing moratorium and undoing plans to regulate greenhouse gases from power plants. Mead, a Republican, didn’t mention the policy changes or Trump in his speech.

An October state economic forecast was slightly more optimistic than one in January but predicted a downturn in state revenue that began in 2015 would continue through 2020. The assessment means Wyoming lawmakers who will draft a budget for the 2019-2020 biennium this winter will need to make tough choices, especially about funding a K-12 public education system facing a deficit in the hundreds of millions.

The revenue pinch is probably here to stay as long as natural gas prices remain weak and gas competes against coal as a fuel source to generate electricity, Godby said.

Coal also faces global uncertainty because of its contribution to greenhouse gas emissions and climate change. The outlook hasn’t fundamentally improved just because coal companies that were bankrupt have shed their liabilities and short-term trends have boosted mining, Godby said.

“Whatever we can do to get away from the boom-bust cycle of the energy economy is crucial. What we see now doesn’t look like a temporary downturn in the energy cycle,” said Godby.

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Plea agreement in the works for Casper cop charged with child abuse

A Casper police officer charged with child abuse is working out a plea agreement in the case, her attorney said Wednesday.

Thomas Fleener, the attorney for Laura Starnes-Wells, declined to say whether his client would plead guilty in the case, only saying that he is working on an agreement with the Natrona County District Attorney’s office.

District Attorney Michael Blonigen declined to comment on the matter before the change-of-plea hearing, which is scheduled for Nov. 28.

Starnes-Wells was charged with felony child abuse in February. Her husband, Sgt. Todd Wells, was charged with a misdemeanor count of child endangerment.

Charges were later dropped against Todd Wells, with prosecutors promising to re-file. No additional charges against Wells have been filed.

Both Wells and Starnes-Wells are still working for the police department, City Manager Carter Napier said Wednesday afternoon.

Starnes-Wells is assigned to a project with the Office of Professional Standards, Napier said.

The Office of Professional Standards reviews and investigates complaints against Casper Police Department employees, replies to citizen inquiries and documents employee commendations.

Napier said he was not aware of any plea deal in the works.

The Natrona County Sheriff’s Office began the investigation in May 2016 after the couple’s adopted daughter told school officials that Starnes-Wells “had battered her” over the previous weekend, according to court documents. School officials told investigators that the girl, who was 14 at the time, told them Starnes-Wells had slapped her. The school official said she noticed that the girl had a partially black eye and a swollen lip, the documents show.

Starnes-Wells could face up to 10 years in prison if convicted on the felony charge.