Over the past several weeks, the world has come to a standstill the likes of which we have never seen. Schools have been closed. Businesses shut down. Economies rattled. Communities have gone quiet.
Just like nearly every other industry, energy producers have been adversely impacted by the pandemic. In recent weeks, energy usage in the United States dropped to its lowest in 16 years. Be it coal, oil, natural gas or renewables, consumption of nearly every energy source is down, impacting businesses, jobs and the critical revenues for the state and local economies they drive. Oil is being particularly hard hit right now by a price war happening overseas combined with a major oversupply due to the decline in the use of fuel used by cars, planes and ships.
Wyoming’s core energy industries have been facing headwinds for the past several years. The impact of this further decline to the state cannot be overstated. Minerals, oil and natural gas support tens of thousands of jobs and generate hundreds of millions of dollars for our state and local communities. The depressed markets for coal, oil and natural gas have taken a devastating toll on Wyoming revenues, with them playing a major role in the state’s projected loss of between $550 million and $2.8 billion in revenue over the next two years.
However, there may be a silver lining for Wyoming and its energy industries amid the crisis. With everyday life moved to within the confines of our homes, and the need of hospitals to be able to run at full-tilt at any given moment, the importance of reliable and affordable energy has once again taken center stage. What’s more, we’re leaning on fossil fuels for much more than just energy as they are used in the production of protective equipment, including face masks, as well as many pharmaceuticals.
Over 80 percent of the energy used around the world comes from fossil fuels, principally oil, natural gas and coal. Why? Because it continues to be the most reliable, accessible and affordable form of energy in the world. It shouldn’t come as a surprise then that the U.S. Energy Information Administration just released a report showing that last year, U.S. total energy exports exceed imports for the first time in nearly 70 years.
As we begin slowly turning a corner in the COVID-19 crisis, Wyoming is uniquely poised to not only help meet our domestic energy demands, but supply a growing international market. To do so, we must continue to invest in our energy infrastructure and ensure we have the best, most innovative energy technologies.
Thanks to the leadership of both current and former members of the Wyoming State Legislature, as well as Governor Mark Gordon and his predecessors, the state has already begun this critical work. From the University of Wyoming School of Energy Resources, Integrated Test Center and Wyoming Pipeline Corridor Initiative to efforts focused on expanding transmission capacity, energy export opportunities, advancing carbon capture utilization and storage, and much more, Wyoming is leading the nation in energy technology, production, policy and innovation. Now is the time to continue fostering these endeavors while looking for additional opportunities to solidify our role as the energy leader.
One area of innovation where Wyoming took the lead early is in encouraging the development of carbon capture utilization and storage, a process in which carbon is captured from industrial processes and either utilized by turning the carbon into a new product or stored by injecting the carbon into a storage site. With the Integrated Test Center, a public-private partnership, Wyoming has been at the forefront in helping to advance the carbon economy by facilitating the development of technology that can capture carbon emissions and utilize them for enhanced oil recovery, permanent geological storage and conversion into products we can sell. Researchers from around the globe are testing critical technologies that will not only help improve how we utilize energy sources like coal, but create a new market for an energy byproduct.
There are still several areas of opportunity for Wyoming to grow its role in meeting domestic and international energy demand. The COVID-19 crisis has shown that there is a lack of energy storage capacity in Wyoming and the northern Rocky Mountain region. While the Department of Energy’s Strategic Petroleum Reserve in the Gulf of Mexico region has made some space available, it will soon be filled and producers will be faced with stopping production. Wyoming is blessed with significant and well-characterized geological resources that could be well-suited for energy storage. Now would be an ideal time to explore an energy storage solution within Wyoming that could provide a geographically diverse SPR for the country.
While the pandemic and the economic downturn it has caused will be temporary, the opportunities to improve how we extract, utilize and market our natural resources will not be. Now is the time to double-down on projects and initiatives that will advance Wyoming’s energy industries while exploring new opportunities.
Jason Begger is executive director of the Wyoming Infrastructure Authority.
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