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Drilling rig

Roy Merrill, an engineer at a Wold Energy drilling site near Rolling Hills, points out various parts of the rig during a 2017 tour of the well. State political leaders held a panel last week to discuss ways to limit Wyoming's economical dependence on the energy industry.

Several of Wyoming’s top policy minds met on the campus of Laramie County Community College on Thursday to try to define answers to a problem nearly as old as Wyoming itself: how to break free from the state’s ceaseless boom-and-bust cycle.

The first in what was hinted to be a series of tailored conversations on the issue throughout the state, the panel — sponsored by LCCC and the University of Wyoming American Heritage Center — was a no-holds-barred discussion on the binds that have held back Wyoming’s economy for decades, as well as a vision of what could improve its economic prospects in the long term.

Panelists included author Sam Western; Rep. Cathy Connolly, D-Laramie; Rep. Sara Burlingame, D-Cheyenne; Rep. Sue Wilson, R-Cheyenne; Wyoming County Commissioners Association director Jeremiah Rieman; and former Rep. Mike Madden. Dr. Pete Simpson moderated.

Spanning nearly two hours, the program was based around a quote from UW Professor Anne Alexander at the 2017 Southeast Wyoming Economic Report Luncheon, where she was said the state’s economic situation was “not going to get better unless we make it better. ... There’s no cavalry on the way. We’re the cavalry.”

While immediate solutions were few and varied when they came, all Thursday’s speakers were on the same page in one regard: The time is now to diversify the state’s economy and stabilize its revenue streams from the volatility of the energy industry.

“I think all of us are here to learn and to think and to be looking at something Yogi Berra once described as ‘déjà vu all over again,’” Simpson said in his opening remarks. “That’s what we are doing, we are talking about this in the same ways that I recall talking about this years ago with the Wyoming Futures project. For years, many of the movers and shakers have struggled with this same dilemma, what to do to diversify the economy.”

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Wyoming needs to embrace disruption, not fear it

Wyoming’s boom-and-bust economy is intrinsically tied to the performance of its extractive industry.

In good times for oil, gas and coal, Wyoming also experiences good times. In the bad times, Wyoming does poorly, in turn impacting its people, schools and health care system.

Wyoming, Rieman said, needs to begin preparing for a reality where the good times the state has lived for over several generations are finally over.

An eight-year veteran of former Gov. Matt Mead’s administration, Rieman — one of Mead’s top policy advisers during his tenure — said that Wyoming’s bedrock energy sector is currently undergoing radical changes on a global scale and, to maintain relevance, Wyoming needs to find its way to the cutting edge of the technologies currently disrupting the status quo.

The surest way to doing this, he said, is for the state to cause disruption of its own.

“Wyoming needs to find a way to embrace disruption,” he said. “Not in the reactive sense, where we’re controlled by the disruption, but rather we need to create the disruption, or find a way to identify it, and capitalize on it in order for Wyoming to create its own identity.”

He named the advent of the horse-drawn carriage (and the pushback from humans used to pushing the carts themselves), and later the automobile, to describe how disruptive technologies had been created and subsequently birthed new industries on the side — like billboard advertising, installment lenders and auto mechanics.

Though ground-up innovation could be an answer, Rieman suggested one of the simplest answers could be in the world of energy innovation, finding ways Wyoming could capitalize and expand on what it already has. Accomplishing this, he said, requires strategic investment from the state, particularly toward research and development.

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Knowing what works

Also discussed was Wyoming’s often-touted “business friendly” climate and why, despite the state’s perennial placement atop every best-for-business list, its low taxes and laissez faire regulatory environment has thus far failed to attract businesses to the state.

Western, the author, said the problem is twofold. The state’s residents “have a hard time detaching themselves” from a legacy of the energy industry and a concept of freedom that he said has driven a narrative into the state’s identity. That narrative has become difficult to break away from: an idea that “if we get away from all of the regulations, if we just got government off our back, we’ll prosper for a thousand years.”

That idea of freedom, he argued, is misplaced — and that freedom in one sense can mean being emboldened to another master: the boom and bust.

While broaching the topic of taxation in Wyoming is often challenging, Rieman said the most pragmatic way to discuss the issue is simply by looking at whether or not Wyoming’s policies of taxation have actually worked.

The truth, he said, is that they haven’t — and that low taxes are only part of what it takes to be successful. The reason high-tax states like California have kept the tech industry stationary, Rieman said, is because of the state’s access to the venture capital and talent companies needed to be successful, as well as the fiscal and regulatory environments they need to assure futures for themselves and their employees.

“When we talked to the manufacturing sector and really dug into things, when we talked to the minerals industry, it wasn’t about taxes; it was more important for them to have certainty,” Rieman said. “This volatility we’ve been talking about in Wyoming has been incredibly disruptive.”

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Eliminating cultural concerns

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While attracting investment is one component of economic development in Wyoming, the state also has cultural issues that could make some reluctant to settle down in Wyoming.

Burlingame, who also serves as director of the LGBTQ advocacy group Wyoming Equality, said that outsiders looking to come to Wyoming may hesitate to move here due to the state’s perceived lack of movement on social issues. She shared with the audience a message she got on Facebook from an acquaintance — a Harvard graduate and a devout churchgoer — who was considering moving to Cheyenne for work in school administration.

The reason he reached out, Burlingame said, “to make sure he wasn’t looking for houses in a certain junior high district,” in light of recent allegations of racist and homophobic behavior at McCormick Junior High, saying he felt members of his family might not feel safe if they were to move there.

“I cannot detach our economic future from our cultural present,” she said. “And I don’t see a clearer explication of that than one Facebook message from somebody who I want to move to our town — we would love him, he’s fantastic — but he doesn’t know if Cheyenne would be a safe place for his family.”

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Finding the political will

While all of the panelists acknowledged that the public could be better educated on the importance of diversifying the state’s revenue streams, ultimately it comes down to finding the political will to make tough decisions at the state level to truly start to solve the problem.

“Other states don’t have a mineral industry, and they still find ways to fund their schools and balance their budgets,” Burlingame said. “In Wyoming, we are so married to that.”

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After a session of failed taxes (many of which were not targeted at consumers in Wyoming) laid the bedrock for future budget cuts in the 2020 budget session, panelists grappled with the issue of what it would actually take for lawmakers to start to have the tough conversations needed to answer for the state’s revenue woes.

Much of it, Wilson said, depends on the Legislature getting on the same page about spending and what it takes to balance the budget. But it also requires the Legislature to acknowledge a reality where oil and gas will continue to fluctuate and the role assigned to coal — once the foundation of the state’s economy — is beginning to dim in the world’s energy portfolio.

“I think the first thing we need as far as avoiding these decisions from being hijacked is we should all really pray the bust continues,” Wilson said. “I know this sounds awful, but after some time of being on revenue and appropriations, you start to feel like you’ve made some progress in discussions about how to find new sources of funding, but then the price of oil goes up and you no longer have to work on it anymore. Why does it get hijacked? Because commodities go up and you don’t have to make hard decisions anymore.”

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Politics Reporter

Nick Reynolds covers state politics and policy. A native of Central New York, he has spent his career covering governments big and small, and several Congressional campaigns. He graduated from the State University of New York at Brockport in 2015.

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