Welcome to the Star-Tribune’s Energy Journal, a play-by-play of the past week in Wyoming’s world of energy. I’m your energy and natural resources reporter, Camille Erickson.
Do you have suggestions, ideas or energy events you’d like to see highlighted in the Energy Journal newsletter? Please contact me at email@example.com or follow me on Twitter for the latest @camillesuzanne.
Last week in numbers
Friday oil prices: West Texas Intermediate (WTI) $52.54, Brent (ICE) $57.38
Friday natural gas: Henry Hub $2.11, Wyoming Pool $1.80, Opal $1.84
Baker Hughes rig count: U.S 942, Wyoming 36
Quote of the week
“Prior to its bankruptcy, Cloud Peak (Energy) was the loudest coal company. They would scream whenever about regulatory overreach, they would slam the Obama administration, they had a PR machine. Now they don’t say anything and nobody has any information. So it’s really hard to know what’s going on in that company’s head.”
— Shannon Anderson, attorney at Powder River Basin Resource Council
BANKRUPTCY: With bidders on the horizon, Cloud Peak auction delayed again
Cloud Peak Energy filed a request to delay its auction of Powder River Basin assets by another week, court documents filed Wednesday revealed, leaving Wyoming’s coal country holding its breath. The court rescheduled Cloud Peak’s auction until Thursday, with a sales hearing to follow Monday, according to recent court documents. But the company also announced it had identified qualified bidders this week, though it abstained from providing specifics.
Dig into the history of the decade-old Wyoming-based company here.
BLACKJEWEL: Judge approves sale of coal mines to Contura
A federal judge approved the sale of mines owned by bankrupt coal giant Blackjewel to previous owner Contura Energy. But the sale hinges on the final approval of the federal government, after it objected to outstanding royalties and leasing terms of the Wyoming mines. Several objections from creditors weighed on the sales hearing, but the judge overruled the majority, concluding “it’s in everyone’s interest to return these properties to productive use as soon as possible.”
TRENDING: The future of Eagle Butte and Belle Ayr on the line
Contura said it planned to “reinstate immediately” 500 jobs at Eagle Butte and Belle Ayr mines if the sale is finalized. In a statement made by Blackjewel, Contura would operate the mines for six to 12 years.
But Wyoming Public Radio reports the coal mine’s future may be much shorter. Anonymous sources close to the negotiations allege Contura was considering closing the mines in six to 12 months, to curb reclamation costs (via WPR).
A spokesman for Contura Energy declined to confirm or deny the report when reached for comment Thursday by the Star-Tribune. But in a statement made July 25, company executive Andy Eidson said: “Absent another qualified purchaser for the assets, we have determined that the most prudent path forward is to reacquire these mines to reestablish operations, resume safe and responsible coal production, and bring hundreds of miners back to work.”
OIL: Wyoming's oilfield commutes can be deadly. But the full extent of the problem isn't clear.
Crashes linked to fatigued driving have become a persistent problem, and Wyoming’s foremost industry is rife with risk factors: long-distance commutes to job sites, prolonged shifts and monotonous tasks associated with many oil and gas jobs all contribute to drowsy driving, according to the Centers for Disease Control.
When workers clock out before driving home in their personal trucks, however, they fall through gaps in data collection. Although public officials know vehicle wrecks are the leading cause of on-the-job deaths for Wyoming oil and gas workers, data analysts stop grouping or identifying workers by industry at the end of the shift. Shane Sanderson reports from court here.
NATION: Rule monitoring mineral royalties challenged in Wyoming courts
A rule requiring energy companies to pay full royalties on minerals extracted from public land will come under scrutiny again in Wyoming courts, after industry groups filed a lawsuit last month against the Department of the Interior over the policy, saying it hinders energy development.
When energy companies extract minerals from public land, they must pay royalties to the federal government. About half these funds flow back to states, with Wyoming receiving the most.
But before the valuation rule, energy companies would sometimes use affiliate companies to sell minerals at deflated prices, often skirting higher royalties associated with selling resources at market value.
Obama-era revisions required companies to pay market value price on royalties after extracting minerals on federal and tribal land. The new valuation rule was rolled back by the Trump administration, only to be reinstated by a California court in April. But in a legal game of ping pong, the rule may be challenged in Wyoming federal court.
CLOSURES: Is retiring coal-fired power plants sound for business?
Despite the Trump administration's vocal support of the coal industry, coal-fired power plants have continued to close, as executives claim the financial savings are too good to pass up, and alternative sources like natural gas and renewables squeeze into energy markets. Approximately 9.7 gigawatts of coal capacity will likely be retired this year. Read what executives at the nation's top utility companies are saying about the switch here (via S&P Global Market Intelligence).