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Kemmerer miners

Kemmerer miners and United Mine Workers of America members packed the South Lincoln Training and Event Center in Kemmerer on April 20 to hear contract negotiations between UMWA and Westmoreland leadership. 

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Last week in numbers

Friday oil prices: West Texas Intermediate (WTI) $50.93, Brent (ICE) $58.71

Natural gas weekly averages: Henry Hub $4.44, Wyoming Pool $5.86, Opal $5.97

Baker Hughes rig count: U.S. 1,076, Wyoming 30 (The Wyoming Oil and Gas Conservation Commission's Nov. 12 rig count from Drillinginfo was 43.)

Quote of the Week

“There’s really just no appetite for paying taxes. We’ve gotten kind of spoiled from living off our mineral revenue.”

--Buck McVeigh, executive director of the Wyoming Taxpayers Association

No more 70 percent 

Wyoming doesn't get 70 percent of its revenue from minerals, according to the Wyoming Taxpayers Association, though that figure is the most commonly used to explain the state's mineral dependency. There are a number of myths and misunderstandings about Wyoming, from how little the average taxpayer contributes to state income to the impossible challenge of diversifying the economy without changing the tax structure. 

Miner opposition 

Retired miners of the Kemmerer coal mine in southern Wyoming filed letters with a bankruptcy judge in Texas pleading for their pensions and healthcare

Westmoreland is moving through restructuring, seeking to sell off core assets and potentially cut into retiree benefits due to financial pressure in the coal market. 

Climate change report warning

Not long ago, a report painting dire consequences to the economy due to climate change may have been written off in Wyoming. But with energy fueling everything from schools to the Department of Health in the state, climate change's growing concern poses a challenge to the state's fossil fuel industries future growth that will have to be addressed. 

Wyoming's tax burden

The full tax burden on oil and gas operators in Wyoming is higher than peers like Oklahoma, Colorado and New Mexico. 

But in terms of production, the only thing that really matters is the rock, according to a study commissioned by the Legislature, facilitated by the Wyoming Infrastructure Authority and authored by Daniel Johnston & Co.

The analyst presented his finding to the Joint Minerals, Business and Economic Development Committee Thursday, noting a number of anecdotally understood facts. Federal regulations slow down development. Wyoming's tax burden on industry is effectively higher than others. The state offers fewer incentives to industry. Nearly half of Wyoming's oil production is federal and about 85 percent of its gas production. 

In Wyoming, for a barrel of oil, at a $70/barrel price, about 24 percent of profits goes to the feds. About 30 percent goes to Wyoming, leaving 46 percent for the company. The division of profits, the report notes, is distinct from the breakdown of revenue. For that same barrel at a $70 price, the federal government receives about 14 percent. About 18 percent goes to the state and 68 percent goes to the company. 

In other news ...

The Wyoming delegation wants Japan to drop its tariff on trona, a tariff that's allowing Chinese synthetic to pour into the Japanese market as U.S. exports fall.  

As federal methane rules, revised by the Trump administration, fall short of pleasing environmental and public health groups, Wyoming is poised to leap ahead of federal standards, as it has before.

***

Industry said it's in no shape to pay monthly taxes to counties, killing outgoing Rep. Mike Madden's attempt to solve revenue losses to Wyoming counties due to large delinquent taxes in the mineral industries. 

The bill was first written up years ago, following a legislative task force to investigate and solve tax uncertainties or redundancies in Wyoming. It would have made production taxes on a county level due every month instead of the following year. With that approach, large unpaid tax bills would be less likely, proponents argued. 

Longtime lobbyist and former Holland & Hart lawyer Larry Wolfe urged lawmakers to move the bill forward Friday at the Revenue Committee in Cheyenne. 

"If we are going to have an effective government, an effective tax system, this is a part of it and it’s an essential part of it," Wolfe said. 

Coal, uranium, oil and gas had a different take.

John Cash of Ur-Energy pointed out that the uranium prices are so poor that the company is fulfilling its long-term contracts by buying uranium on the spot market rather than producing it in Wyoming. The monthly payments would be painful, if not impossible, for the struggling industry, he said. 

Sen. Jeff Wasserburger, R-Gillette, noted that of the four coal firms he'd spoken with, two said they likely couldn't handle paying their county ad valorem taxes on a monthly basis. 

The senator warned that the bill could have unintended consequences. If mines shutter from tax burdens, Wyoming loses, he said. 

"I don’t believe the coal companies are financially healthy enough to withstand the increase in the tax," Wasserburger said. 

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Follow energy reporter Heather Richards on Twitter @hroxaner

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Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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