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Day in Gillette

Heavy machinery continues to flow in and out of Eagle Butte Mine on July 25 in Gillette.

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 camille.erickson@trib.com or follow me on Twitter for the latest @camillesuzanne. Sign up for the newsletter at trib.com/energyjournal

Last week in numbers

Friday oil prices: West Texas Intermediate (WTI) $56.02, Brent (ICE) $63.39 

Friday natural gas: Henry Hub $2.22, Wyoming Pool $2.07, Opal $2.08

Baker Hughes rig count: U.S 946, Wyoming 36

Quote of the week

“I have nothing against green energy. At one point we will run out of coal; oil will get harder and harder to find; solar, hydroelectric and wind power will be the future. … We don’t think we’re going to dig coal for the next 10,000 years. But we know that supplies here in the PRB (will last for) 150 to 200 years. Let’s take advantage of that.”

 — Rory Wallett, out-of-work Blackjewel worker in Gillette

Possible sale of idle Blackjewel mines to former owner moves forward

Despite objections by creditors and the federal government, a bankruptcy judge approved a request Friday from bankrupt coal operator Blackjewel to move forward with the sale of two idling Wyoming coal mines and a West Virginia mine.

On Thursday, coal company Contura Energy offered to purchase Blackjewel's Eagle Butte and Belle Ayr mines in Wyoming, as well as Pax Surface Mine in Kentucky, for $20.6 million. The company also agreed to supply $8.1 million in desperately needed funding to pay past-due bills and continue maintaining Blackjewel's mines throughout legal proceedings.

The sale could result in the reopening of Eagle Butte and Belle Ayr mines to full capacity, bringing back over 1,000 out-of-work employees for the next six to 12 years, according to attorneys for Blackjewel.

The coal company’s offer must be approved at a final sales hearing on Wednesday. As the stalking horse bidder, Contura Energy set the minimum price for auction at $20.6 million, guaranteeing that there is at least one buyer during the sales process.

A timeline of the Blackjewel bankruptcy

What happened in the flurry of days following the closure of the Blackjewel mines warrants retelling, as developments from Blackjewel’s case in bankruptcy court continue to unfold and families across the country await answers. Read what's happened each step after Blackjewel declared bankruptcy on July 1.

Wyoming mineral and landowners say changes to drilling permit rule not enough

During this month’s commission hearing, supervisor of the commission Mark Watson introduced a new rule with the intention of “leveling the playing field” for operators itching to lay claim to Wyoming’s oil-rich fields. Commissioners voted unanimously July 10 to move the rule forward in a 33-step process.

But a group of land and mineral owners are critical of the proposed changes, arguing the rules do not go far enough to protect mineral owners “from being exploited,” according to a press release sent to the Star-Tribune by Falen Law Offices, a Cheyenne-based firm representing the Wyoming Land and Mineral Owners Association. To the landowners, the revised rule falls short of protecting their interests by failing to encourage immediate drilling or break up the monopolies held by large companies.

“As citizens and owners of that land and those minerals, we need to be a part of that decision-making process because it affects us,” said Roger Lemaster, chairman of the association and a farmer from Burns.

Wyoming lawmakers explore the potential of storing spent nuclear fuel rods to bring in more revenue

In their latest move to diversify Wyoming revenue streams and divorce the state from its dependence on coal, senior lawmakers voted last week to launch an investigation into the economic potential of storing spent nuclear fuel rods.

A legislative committee voted 7-6 on July 8 in favor of allocating $6,000 to the joint minerals committee to study the issue, according to Matt Obrecht, director of the Legislative Service Office.

A subcommittee of six Wyoming senators, including Sen. Jim Anderson, R-Casper, who co-chairs the minerals committee, will work with the Department of Energy to consider the viability of the plan. The group will present key findings to the full committee by Oct. 15, according to Obrecht.

Entertaining the charged idea of storing spent nuclear fuel rods harkens back to two attempts by Wyoming public officials to build facilities decades ago. Neither effort was successful. But Anderson said now is the time to consider the possibility again as coal’s precipitous decline continues to rattle the health of the state’s budget.

Environmental groups have historically mounted efforts to oppose storing spent nuclear fuel rods in Wyoming. Connie Wilbert, director of Sierra Club Wyoming Chapter, found the latest proposition alarming.

“We are very skeptical and do not think that it is the way that Wyoming should be dealing with revenue issues,” she said. She called the idea “shortsighted and extremely risky.”

Cloud Peak bankruptcy ruling could mean $30M hit to Campbell County

Campbell County could be out $30 million in taxes after a financing plan proposed by bankrupt coal operator Cloud Peak Energy places the county behind other more senior creditors, decreasing the likelihood the county will see the money it's owned, according to a decision made by Delaware U.S. Bankruptcy Court Judge Kevin Gross.

Cloud Peak Energy filed for bankruptcy in May and is one of six coal companies that have experienced bankruptcy proceedings in Wyoming. The coal operator owns three mines — Antelope and Cordero Rojo in Wyoming and Spring Creek in Montana — and owes $400 million in outstanding debt.

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