Sophomore College in Idaho 2012: Student Reports

People, Land, and Water in the Heart of the West

Salmon River. Sun Valley. Pioneer Mountains. The names speak of powerful forces and ideas in the American West. Central and Southern Idaho — a landscape embracing snow-capped mountains, raging rivers, sagebrush deserts, farms, ranches, and resort communities — was our classroom for this field-based seminar led by David Freyberg, professor of civil and environmental engineering, and David Kennedy, professor emeritus of history.

In September 2012, a dozen Stanford undergraduates participated in the Sophomore College Course “People, Land, and Water in the Heart of the West.” Sponsored by the Bill Lane Center for the American West, the College offered students the opportunity to learn about the history and future of a broad range of natural resource management issues in the western United States. During the first week on campus, students engaged in a morning lecture series on the physical properties, political economy, legal frameworks, and ethics of resource management (taught by Freyberg, Kennedy, and Stanford colleagues David Brady (political science), Buzz Thompson (Law School), and Debra Satz (philosophy). They met for afternoon lab sessions to learn the ArcGIS geographic information system and begin collecting data for their final presentations.

Click to enlarge image

Equipped with a foundational knowledge of resource management, students and faculty headed to Idaho for the two-week field portion of the course. They visited resource management sites near Boise and Twin Falls on the Snake River Plain, Craters of the Moon National Monument, the Upper Salmon River in Custer County, and Stanley in the Sawtooth National Forest. The breadth of their interactions spanned fourth-generation ranchers and farmers; officers of the National Park Service, Bureau of Land Management, and Forest Service; entrepreneurs; conservationists; foresters; biologists; and recreationalists. From these discussions, students explored the complexities of public-private partnerships and examined the role of science in conservation and natural resource management.

These experiences culminated in team presentations on three major topics: water management of the Eastern Snake Plain Aquifer, policies surrounding the Lower Granite Dam, and the history and future of Multiple Use policy. The students' projects highlight tensions and overlapping interests of land users in the American West. In addition to presenting their work through live presentations, students prepared written reports to share their findings with the larger community. The reports highlight their experiences and reflections from this intellectual journey exploring natural resource management in the American West. 

Image credit: David Freyberg. Itinerary in Idaho: Mining & Geology Museum and Interagency Fire Center (Boise), the BLM and US Forest Service (Twin Falls), Hagerman Fish Culture Experiment Station & Hatchery (Hagerman), Milner Dam and Bpl. Farm (Hazelton), Silver Creek Preserve, Lava Lake Ranch and Craters of the Moon (Pioneer Mountains), Big Creek Ranch (Pahsimeroi Valley), Crooked Creek Ranch (Stanley), the Sawtooth National Recreation Area, and Ketchum. 

 

To view the students' projects, please use the links below:

Teaching Assistants 
Julia Barrero
Dane Klinger
Ryan McGinley-Stempel

Course Coordinator
Madeline Weeks

Leading the Charge from the Bottom Up and the Top Down

Overview

While touring Wyoming, many of the energy industry workers we spoke to mentioned a problem with educating and retaining engineering skills in-state. For our project, we chose to address this issue in two major ways. The first is suggesting specific programs to implement to improve energy education, giving students tools in STEM and motivation to stay in-state due to awareness of Wyoming's role in global energy markets. The second is a top-down approach, examining the economics of Canada's Heartland Project as a model for encouraging industry in Wyoming to employ more engineers and other educated energy workers in-state instead of sending them to companies' central facilities in other states.

Annotated Presentation Slides

Changing k-12 education in Wyoming

These are the 3 major areas of improvements that WY should consider in order to further incorporate energy education into the current K-12 education.

As children within the grades k-12 are still developing basic skills and knowledge, it’s best for energy education to be modestly introduced within class. For K-2, we recommend that this basic education should come through arts & crafts, recycling within the classroom, and basic/ local examples of geography and topography to instill an early exposure to topics and prepare for more in-depth learning.

At this point the children are able to comprehend and appreciate the more complex aspects of energy and the environment. The incorporation of more science and math into class is recommended, especially in group activities (such as MESA, an afterschool program to encourage STEM involvement). However, more hands-on-activities are still preferred; rather than traditional coursework as more appropriate for more advanced age groups.

As with previous grade ranges, hands-on activities such as field trips and extracurricular programs are still preferred; however the level of challenge and complexity has risen. Also, it is recommended that energy be now incorporated into class and homework problems. There is now a transition from the observational level towards analysis integrated into general education.

High School is typically when students’ interest and investment in energy education will begin to really split, hence the wider grade range. Many extracurricular have been kept, especially the competitive ones. For students to at least maintain a certain standard of energy knowledge, energy examples should still be mentioned in most classes when appropriate, and not only as samples for physics or calculus but as relevant context for history, economics, and political science courses. Project Green and Project Lead the Way are both examples of programs designed to properly encourage student interest in the energy field. If a student is able to, community college is a good way to gain an introduction into higher level aspects of energy. Community college is also a good choice for students that are actually not planning to obtain college degrees. In Wy’s case, a large portion of entry level jobs require some technical knowledge and training which a community college will more than certainly provide.

Whether students are planning to go into the energy industry or not, the high school curriculum should emphasize energy and make it easier for students to enter the energy field (in both skilled labor positions and engineering/STEM careers); however, it should also allow WY residents to realize their role within the whole scheme of WY---and the world. The energy curriculum should instill a sense of pride within WY residents, knowing that their state is extremely special and essential to the rest of the country for providing so much of its energy. This pride should encourage students to remain in-state after graduation, meeting skilled labor demands and raising a generation of energy-literate Wyomingers.

Mirroring Alberta’s Industrial Heartland

Alberta's Industrial Heartland is Canada's largest hydrocarbon processing region. It is a joint initiative between five municipalities to attract investments in energy industries in this region. The Heartland is instrumental in bringing industry to Alberta, and being able to process dirty hydrocarbons and add value to raw materials. Since all of the facilities are in one large complex, transportation costs are largely cut. Additionally, this plan encourages companies to work together. Since Canada has laws preventing direct government subsidies for these projects, these companies voluntarily work together to produce an ultra efficient facility.

The Heartland is thriving, even to the point where Wyoming senators have gone to Alberta to discuss the possibility of bringing a similar project to Wyoming.

Wyoming ships all of its raw materials away from the state, leaving it at the mercy of the states that buy its materials. Additionally, it is at the mercy of the railroads, which control interstate commerce by being oligopolies of the transportation of coal out of Wyoming.

All of these reasons point to Wyoming being very similar to Alberta, and so it could very easily see the same success that the Heartland has.

Since Wyoming has the funds and ability to directly attract companies, it could speed the process up greatly by offering subsidies or working to create the large infrastructure that will end up being public goods and benefit all of the companies who come to the Wyoming heartland. Most of these issues are social or political, as the main decision seems to be very economic.

Works Consulted

K-12 Energy Literacy Program:

  • James “Jim” Bosch, NREL Public Affairs Department
  • Sarah Ramsay Walters,  UW School of Energy Resources
  • Carole Shafer, Director of Workforce & Community Development; WYCC
  • Fred McLaughlin, UW Geologist
  • Duane Fischer, Sheridan College Diesel Instructor

Heartland Project:

  • Tyler Westover: Manager of Industrial Development (Strathcona County)
  • Jana Tomie-Thompson: Economic Development Officer for the Heartland

Back to Sophomore College 2014: Energy in the West

Carbon capture and coal exports

Overview

While going over the Wyoming Governor’s Energy Plan, we noticed that there was an overwhelming focus on keeping Wyoming coal viable. With EPA standards on carbon dioxide emissions more stringent than ever, coal is becoming a less and less attractive option around the country. It is in the best interest of Wyoming, as the nation’s foremost coal producer, to find ways of keeping this product viable. The Governor’s Plan touches on two possibilities: coal export to growing countries in East and Southeast Asia, and the Hybrid Energy systems that will utilize a combination of energy resources in a large energy campus. Our amendments focus on the possibility of investing in uses of captured carbon and analyze the economic viability of coal shipment to East Asian countries, with China used as the primary example.

Annotated Presentation Slides

Proposal 1: develop new uses for CO2 to promote carbon capture technology

Carbon capture technology, while constantly being improved, is a relatively mature technology. Its main deterrent are high costs, a limited CO2 transportation infrastructure, and lack of monetary incentives. By developing economic uses for carbon dioxide, coal plants may be incentivized overcome these high costs and implement carbon capture technology. This would reduce the plants’ carbon footprint.

Wyoming itself does not burn the majority of the coal it produces, so it relies on the demand for coal from other states. Recent regulations by the Environmental Protection Agency and the adoption of renewable energy has threatened this demand for coal. Carbon capture technology will help coal-fired plants become greener and meet EPA’s standards if it is economically viable.

Ultimately, by developing profitable uses of CO2 and incentivizing carbon sequestration, we can maintain demand for Wyoming’s coal.

This map shows the expected cuts in carbon emissions per state by 2030. Almost every state is striving to reduce their carbon emission.

To overcome the challenges of CO2 transportation, the Governor’s Energy Plan streamlines the process of transporting carbon dioxide. Currently, Exxon Mobile owns the only CO2 pipeline corridor in Wyoming, which is running at full capacity. Other plants that implement carbon capture technology have no organized pipe method of transporting the carbon dioxide. This clause in the Governor’s Plan allows companies to build corridors over government property and provide transportation access so as to avoid overlapping, inefficient infrastructure.

To overcome the lack of incentives, we propose spending more on research that studies the uses of captured CO2 as a way to incentivize coal-fired power plants to install expensive carbon capture technology. Already there currently is a proposal to build a carbon capture test facility with the University of Wyoming.

We also suggest that plans for CO2 pipeline development be further clarified to assure greater success. Reducing transportation challenges of CO2 will further support carbon capture.

These are some of the uses that have been developed for CO2. With further funding for research, we can expand upon these ideas and develop more efficient uses of carbon.

Proposal 2: the economic viability of exporting coal to China

Wyoming proposes to ship coal from Powder River Basin to Washington via rail, load freighters to the rapidly expanding markets in Asia. In this section, we analyze whether there is demand in the Chinese market to import Wyoming’s coal.

China burns massive amounts of coal each year. They are working toward reducing their ash and sulfur dioxide pollution due to concerns of air pollution.

We analyzed two options for decreasing sulfur dioxide emissions from China’s coal burning industry to meet the country’s emissions goals. These are 1) installing SO2 scrubbers (to remove the sulfur dioxide from emissions) and 2) import and burn low-sulfur Powder River Basin Coal imported from the United States.

Wet scrubbers remove sulfur dioxide from smoke stacks using the following steps:

  1. Slurry (mixture of lime/ limestone and water) injected with waste gas
  2. SO2 dissolves in slurry
  3. Falls into absorber
  4. Mist eliminator to remove slurry

In this slide, we analyze the potential costs of implementing scrubbers into China’s coal fired power plants.

In this slide, we analyze the potential costs for China to import coal from the Power River Basin. This cost is studied in terms of cost per BTU. The cost of PRB coal is converted from price per BTU to the price it would cost a year. Our calculations show a number significantly higher than that of installing scrubbers, indicating that it may not be economically viable for China to import coal from WY in order to reduce its SO2 emissions.

Given our results, Wyoming should perform more thorough studies on the short and long term economic viability of their coal in Asia countries before proceeding with its massive coal-export port projects.

Works Consulted

“Governor Proposes Test Facility for Carbon Research.” Office of Governor Matt Mead. Wyoming. 23 January 2014. Web. September 2014. .

Back to Sophomore College 2014: Energy in the West

Meeting the EPA Emissions Reduction Mandate

Overview

Touring Wyoming, we heard many times that meeting the EPA’s emission reduction mandates would destroy Wyoming’s economy, if it was not considered altogether impossible. Our group investigated what the necessary build-out would look like in Wyoming. We examined converting coal-fired plants to natural gas, coal plant closures, and incorporating nuclear and wind, as well as residential efficiency measures. Our findings indicated that retrofitting coal plants was not economical, and furthermore, retrofitting every coal-fired plant in Wyoming would not meet the EPA mandate without further work. Meeting the EPA emissions reduction mandate with nuclear, at $21 billion, appears to be more than half again as expensive as wind, at $13 billion. Household efficiency measures, while beneficial, will not have the maximum benefit given the expense involved with the state’s low population.

We heard similar protests throughout our trip to the possibility of an RPS (renewable portfolio standard) for Wyoming—in particular, that an RPS would punish Wyoming unduly as an energy-exporting state. Wind energy is more expensive in Wyoming than energy from coal by a large margin. We therefore investigated the possibility of a Producer’s Renewable Portfolio Standard for the state, where energy produced in state for export would still count toward the state’s renewable energy goals. As RPS are created on a state-by-state basis, we determined that the potential for giving credit for renewables twice would still promote renewables in the state of Wyoming. However, in return for that amendment, we proposed that exported coal also count in the energy portfolio. With that assessment, current renewables in Wyoming stand at 0.63%. Using wind to reach the EPA mandate would bring that number to 4.9%, and so we proposed a PRPS of 7.5% by 2030. Wyoming is indeed in a unique position among states because of its low population and economy reliant on energy export. While we did find a degree of validity in the claims presented throughout our trip, there are more options available to Wyoming than commonly acknowledged. However, as the numbers we found clearly show, there are no easy answers when it comes to energy, environment, and economy in Wyoming.

Annotated Presentation Slides

The EPA’s Greenhouse Gas Tailoring Rule, proposed in 2011, required Wyoming to reduce its greenhouse gas (namely, carbon dioxide) emissions by 19%, a difficult order for a state that exports coal and coal-generated electricity to over 30 US states. We found our benchmarks through two different ways. The first method was to calculate the amount of CO2 emissions that each energy source generates, and thereby calculate how much of these emissions Wyoming had to reduce. The second method was to assume that Wyoming would keep its current energy generation mix, and calculate how much of that energy generation needed to be converted to non-emitting sources in order to meet the 19% carbon reduction goal.

The impending EPA regulation created strong opposition in Wyoming and led to a lawsuit against the regulation, currently in the courts; many Wyomingites work in the fossil fuel industry, and the greenhouse gas emissions law could damage Wyoming’s economy and their livelihoods. However, due to increasing pressure to regulate greenhouse gas emissions and mitigate climate change, there is still a possibility that the EPA regulation would pass.

Our team wanted to find ways that Wyoming could hypothetically meet this goal while minimally influencing the economy, and to this end, we conducted a series of analyses to elucidate the costs and benefits of different methods of meeting Wyoming’s 19% emissions reduction.

There are many different ways to reduce the CO2 emissions. They all, however, they pretty much all require the decommissioning of at least one power plant. It might just turn out that the most feasible idea would be a mixture of paths!

The first thing you should notice is that there would be a large energy deficit if we were to decommission these plants. We could replace that with renewables.

The second thing you should notice is that there would be a lot of lost labor. This might not be a terrible thing, however. At 550,000 people, Wyoming is the least populated state. Sometimes to complete large projects, the state needs to import workers! And if everybody is working, the usually structurally unemployed laborers will be working with equipment. That means lots of unskilled workers. Increasing the unemployment rate could be a blessing.

Looking at the numbers you can see that if we execute our plan we would surpass the 12.16M metric tons of CO2 amount with 12.45M metric tons. Crisis averted.

Having had the opportunity to tour a coal plant that was destined to be retrofitted into a natural gas plant, we asked the plant operators what some of the challenges were. The most egregious cost would be that of the retrofit - about $40 million for a 350 MW plant. Adding scrubbers to clean the natural gas in order to meet the emissions standards would be about another $50 million. Other considerations included building natural gas transmission lines. Because of these issues, retrofitted coal-to-natural gas plants might best be used as peaking plants, used only when demand needs it.

Another way to assess ways to meet the EPA’s standards involved looking at current energy use and assessing how many MWh of generation with the current energy-production mix would need to be displaced with zero-emission energy sources. For this assessment, we looked at Wyoming’s total energy use—162TWh per year—and made the assumption that a 19% reduction in admissions could be achieved by switching 19% of that value to emissions-free sources. (While there are emissions associated with building new facilities, in the case of a nuclear plant, the concrete would be produced elsewhere; in the case of a wind farm, the turbines would likely be sourced from Colorado, where new wind manufacturing facilities have been constructed.) That ammounted to a 30.8TWh/yr quota of emissions-free energy. Using the EIA’s 2013 Capital Cost for Electricity Plants (which only included a 2,234MW nuclear option), we projected that meeting this need with nuclear would cost $21.5 billion (overnight cost) at a capacity factor of 90.9% to build a hypothetical “1.7” 2,234MW nuclear plants.

For the wind assessment, we used the same calculation as we did for nuclear, except that instead of using the EIA’s assessment, we based our calculations on the Wyoming-specific Chokecherry Wind Farm in Carbon County, which is to be the largest in the US. Wyoming has an exceptionally high capacity factor for wind—the EIA Renewable Fuels Module in the 2014 Assumptions to the Annual Energy Outlook assumed a capacity factor of more than 50% for Class 6 wind. The Chokecherry wind farm includes Class 6 and Class 7, and the National Renewable Energy Laboratory wind maps indicate that such high capacity can be found throughout the state. This assessment does not include transmission costs; however, for this to be useful in meeting the EPA’s emission reduction goals, the wind would have to be used in-state and not exported for “credit” for the projects to go to Wyoming. Our assessment found that Wyoming would need to install “2.6” Chokecherry-equivalent projects for in-state use. TransWest Express, LLC, plans to build a 600kV HVDC transmission line for Wyoing wind to Nevada for ultimate sale in California forecasts a cost of $3 billion for the project. Without transmission costs, which would be reduced by using an existing in-state network, and without the costs associated with operating other facilities as peaking plants (solar, it is worth noting, is quite good at that), wind would cost $13 billion to meet the EPA’s reduction goals assuming a 45% capacity factor.

Wind energy has many associated issues and concerns to go along with transmission. High among them is concern about land use. We touched on land use and sage grouse habitat. The Chokecherry wind farm will cover 833,000 acres, with 5,200 acres of permanent disturbance. Much of the state’s highest-quality wind in in the southeast corner (NREL), which seems to have minimal overlap with sage grouse habitat (U.S. Fish and Wildlife Service).

Wyoming is the only state to tax wind production. The state currently gets $13 million per year through the wind tax, which would increase to $47 million per year if Wyoming choose to meet th EPA’s emissions reduction mandates with wind, using our earlier projections. The tax is not enough to fund a project—a 2MW turbine costs around $4 million to build—but we proposed diverting this wind tax, since it is the only in the US, toward promoting renewables and other emissions-reduction measures. Wyoming has substantial income from the coal and gas industries and $20 billion in reserves for operation—enough for seven years of government operation. We therefore urge the state to invest the wind tax revenue directly in emission reduction measures.

Finally, we decided to take an unconventional approach to reducing Wyoming’s greenhouse gas emissions - perhaps we could try incentivizing homeowners to replace their lightbulbs and insulation. It was a win-win situation for everyone - homeowners got to save on their electric bills, and Wyoming could reduce its greenhouse gas emissions. Using data from the US Census and the Energy Information Administration, we determined that there were approximately 200,000 households in Wyoming, and estimated them to be about 2000 sq. ft. By replacing 40 CFL light bulbs per home with LED bulbs, at about $8/lightbulb that saves about 4500 pounds of CO2/year, we could save about 4 billion pounds of CO2 per year at a one-time cost of approximately $64 million. Using a similar method, we determined that replacing insulation, at about $3/square foot of house, would cost Wyoming about $1.2 billion and amount to approximately the same amount of carbon savings. At about 3.6 million metric tons of CO2 emissions reductions, and almost $2 billion for these combined initiatives, we see that Wyoming cannot rely solely on household efficiency to meet the EPA’s GHG reduction standards.

A good idea to win the favor of the federal government is for Wyoming to take steps to improving their carbon footprint proactively. This policy wouldn’t actually hurt Wyoming. The 7.5% requirement is totally reachable. It’d be incremented, so it would pass in the state legislature, but it’s also good because sometime later the 7.5% will turn into a percentage much higher.

Works Consulted

“Air Emissions.” Clean Energy. Revised 22 May 2014. U.S. Environmental Protection Agency. Web. September 2014. <http://www.epa.gov/cleanenergy/energy-and-you/affect/air-emissions.html>.

“Existing coal plants in Wyoming.” Revised 31 August 2012. Source Watch, 2012. Web. September 2014. <http://www.sourcewatch.org/index.php?title=Category:Existing_coal_plants_in_Wyoming&oldid=587082>.

“FAQ: How much electricity does a typical nuclear power plant generate?” U.S. Energy Information Administration. U.S. Department of Energy. Web. September 2014. <http://www.eia.gov/tools/faqs/faq.cfm?id=104&t=21>.

“Renewable Fuels Model.” Assumptions to the Annual Energy Outlook 2014. U.S. Energy Information Administration, 2014. Web. September 2014. <http://www.eia.gov/forecasts/aeo/assumptions/pdf/renewable.pdf>.

“US Nuclear Capacity Factors.” Nuclear Energy Institute. Web. September 2014. <http://www.nei.org/Knowledge-Center/Nuclear-Statistics/US-Nuclear-Power-Plants/US-Nuclear-Capacity-Factors>. 

EIA, US. "Annual energy outlook 2013." US Energy Information Administration, Washington, DC (2013).

Back to Sophomore College 2014: Energy in the West

Raising Revenue and Trust in Wyoming's Energy Industry

Overview

This presentation focuses on two main changes to Wyoming's energy plan.  First, it discusses making the Powder River Basin considered a coal-producing region, which it currently is not in order to increase the price of coal coming from the region.  A higher price of coal would lead to a decreased demand for it, which would benefit the environment, and would also lead to greater revenue from land leases for the BLM, much of which goes back to the state.  We would focus on publicizing the increased revenue to the state in order to promote political support for this policy.

The other change which our plan would make regards regulations on fracking.  We would like to increase the bond price per well that companies need to put down up front.  This is the money that the state uses to close the well if the company goes bankrupt, that way there are no environmental damages due to negligence.  Second, we would like for there to be greater disclosure about the chemicals being used in the fracking fluids and also for there to be an impartial third party which conducts baseline tests in order to determine if fracking has a detrimental effect on the lives of people nearby.  Thus, the chemicals being used would be disclosed to the third party who would sign non-disclosure agreements so that they could conduct proper baseline testing, knowing which chemicals to look out for.

Annotated Presentation Slides

Policy #1: Declare the Powder River Basin as a coal-producing region

The Powder River Basin (PRB) is the largest coal-producing region in Wyoming and exports large amounts of coal to other states. Despite this, the Department of Interior’s Bureau of Land Management (BLM) has declared it a non-coal producing region.

The leases to mine coal in the PRB are artificially low. In coal-producing regions, the government must competitively auction off land to get a fair price; in “non-coal producing region,” leases are designed by the industry. As a result, almost all auctions have only one bidder, leading to a less competitive sale that results in lower prices. As a result, the government loses revenue.

The BLM has also been acting suspiciously. Even though the Federal Coal Leasing Amendments Act requires the federal government to get market price for coal, the BLM refused to recertify the PRB as a coal-producing region to get that market price – despite past requests from organizations to do so. In denying these requests, the BLM claims that the PRB is most “effectively managed” as a decertified region, even though the PRB is clearly coal producing.

A second problem is the royalty payments – tax placed on the mining of the coal, currently 12.5% – that mining companies must pay the government upon first sale of the coal. Mining companies have avoided paying royalties by dividing into two subsidiary companies: a mining company and shipping company. The mining company first sells coal to the shipping company at a very low price, and pays the royalty on that low price. After shipping the coal to a power plant, the shipping company then sells the coal for a much higher price. The spread between the initial and final sale price is entirely absorbed by the shipping company, which does not have any royalty obligations.

Our thesis is that inexpensive leases allow coal to be sold at cheap prices to avoid royalties, leading to lost revenue for the government. These inexpensive leases are a result of the land being leased off at artificially low prices, thus allowing the coal to be sold at a lower price while still maintaining considerable profit.

Our solution is that Wyoming should petition the BLM to declare the PRB a coal-producing region. If they do so, the land will have to be auctioned off through competitive leases. These competitive leases will lead to a fair market price for the land and thus greater revenue for the US government. These higher lease prices will in turn force the prices of coal to be higher (because the cost of input in mining the coal has increased), which will force mining companies to pay more money to the US and WY governments in royalties.

This slide demonstrates the amount of revenue increase that could be generated from a percentage increase in coal prices. The red lines indicate how much revenue would be gained if the PRB coal prices rose to the prices of other coal producing regions. If PRB coal prices rose to the price of the next-cheapest major producer, Uinta, it would generate $356 million in revenue for Wyoming. That’s equivalent to giving each WY citizen $618 annually.

These are reasons as to why we believe that Wyoming would be politically able to successfully petition the BLM to make the PRB a coal-producing region. 

Limitations to our analysis do exist. Our revenue calculations simplify the situation, and it assumes that Wyoming’s wariness of the federal government will not prevent it from petitioning the BLM. In addition, it doesn’t account for the stubbornness the BLM has demonstrated to declare the PRB a coal-producing region.

Policy #2: Introducing new regulations and implementation guidelines on hydraulic fracturing

Our second policy is to introduce new reforms in the way hydraulic fracturing is performed.

Problem A: bond prices

Drilling companies must pay bonds to the government before drilling on federal or state land. These bonds are insurance to cover against the possibility of an accident and other issues that would require money to rectify. The bonds are returned to the companies after drilling if there has not been any damage that requires money to fix. 

The federal bond prices are currently insufficient and have not been updated to account for inflation. Currently, the minimum bond price per lease is $10,000. For blanket bonds, the minimum bond price statewide is $25,000, and $150,000 nationwide. These current prices cannot pay for routine reclamation expenses, and are far from satisfactory from a risk management perspective. It is highly unlikely that the federal government would be able to use bonds to fix a larger issue, and there is a risk of leaving the state with a large number of unsafe wells should the market turn sour.

We propose having the current WY senators propose legislation to increase the bond prices for oil and gas drilling, and to incorporate performance-based metrics to determine individual bond prices for different companies. The minimum bond prices would be increased to account for: inflation, abandoned wells, the high costs to cap a well, individual company history and past performance, and lack of certainty about environmental risks.

There is precedent in increasing bond prices, demonstrating momentum in state legislatures: 

  • December 2011: West Virginia passed a bill establishing a $50,000 individual bond requirement and a $250,000 state blanket bond
  • Maryland is considering a bill to increase the minimum individual bond to $50,000 and eliminate the $500,000 state blanket bond

Increasing all individual bond prices to account for inflation would lead to $216 million revenue from bonds. This value that does not include the performance-based increases that certain companies would be subject to, so the actual value is expected to be even higher.

This is a politically feasible solution for the reasons listed above. 

Limitations do exist. Our revenue calculations were simplified and thus may not be entirely accurate. There is also still debate to be had about what the performance-based metrics should be. In addition, national and state politics may impede efforts.

Problem B: baseline and contamination contractors

Drilling companies currently hire third party contractors to do baseline and contamination testing. This protects them from a number of risks.

Oil and gas companies should instead utilize scientific labs and researchers from the University of Wyoming to conduct baseline and contamination testing. Companies should still fund these tests, but hiring more objective testers would provide more oversight and ensure that the results are more widely accepted.

These are all reasons as to why this is an extremely feasible option.

Some minor limitations include the drilling companies’ unwillingness to transition; if they are not contaminating the water, however, they should not object. In addition, there may be increased costs associated with hiring scientific lab researchers, though we do not anticipate there being so.

Problem C: chemical disclosure

Our third solution is that oil and gas companies should disclose the chemicals used in fracking. Pavilion and other places in Wyoming indicate that there may be health and environmental effects associated with fracking, and citizens have a right to know if that is the case.

Wyoming should thus require oil and gas companies to release all fracking chemical information to the EPA, who will have the right to release this information to medical professions in case there are reports of potential contamination.

This is politically feasible because of the large amount of public support we anticipate, due to people’s wariness of the fracking producers. Politicians are well aware of people’s nervousness and would be willing to do so in order to ease their concerns.

Companies and the government will also support this measure because it enhances the credibility of fracking, would enhance their reputations nationally, and would absolve both from unwarranted blame in the case of health hazard reports.

There are some limitations. This may not be enforced, especially if companies were allowed to withhold some information. Some companies are also unwilling because they believe releasing chemicals may infringe upon trade secrets they have, though releasing to the EPA would not allow competitors to gain access to their chemical companies. Chemical-making companies may resist for similar reasons.

Works Consulted

“Average Sales Price of Coal by State and Mine Type, 2012 and 2011.” Annual Coal Report 2012: Coal Production and Preparation Report. U.S. Energy Information Administration, 2012. Web. September 2014. <http://www.eia.gov/coal/annual/pdf/table28.pdf>.

“Bond Review Example.” Sample of Bond Adequacy Review Excel Worksheet. Bureau of Land Management. 2013. Web. September 2014. <http://www.blm.gov/pgdata/etc/medialib/blm/wo/Information_Resources_Management/policy/im_attachments/2013.Par.79040.File.dat/Attach%204%20Sample%20of%20Bond%20Adequacy%20Review%20Excel%20Worksheet.pdf>. 

“Coal News and Market.” U.S. Energy Information Administration. n.d. Web. September 2014. <http://www.eia.gov/coal/news_markets/>.

Davis, Lucas. "Modernizing bonding requirements for natural gas producers." The Hamilton Project, Brookings Institution, Washington, DC (2012).

Hess, Alexander E.M., and Thomas C. Frohlich. “10 states with the fastest growing economies.” 24/7 Wall St. 14 June 2014. Web. September 2014. <http://www.usatoday.com/story/money/business/2014/06/14/states-fastest-growing-economies-new/10377735/>.

Itler, Stuart, and David Rosner. “Revenue Sharing 101.” Bipartisan Policy Center. 16 August 2013. Web. September 2014. <http://bipartisanpolicy.org/blog/2013/08/16/revenue-sharing-101>.

Jackson, Robert B., et al. "The Environmental Costs and Benefits of Fracking." Annual Review of Environment and Resources 39.1 (2014).

Malm, Liz. “Federal Mineral Royalty Disbursements to States and the Effects of Sequestration.” Tax Foundation, 30 May 2013. Web. September 2014. <http://taxfoundation.org/article/federal-mineral-royalty-disbursements-states-and-effects-sequestration>.

Squillace, Mark. "Tragic Story of the Federal Coal Leasing Program, The." Nat. Resources & Env't 27 (2012): 29.

Wara, Michael. “Current Legal Issues for Energy in Wyoming: Extraction, Use, and Transport.” Sophomore College 2014: Energy in the West, Stanford University. Stanford University, Stanford, CA. 4 September 2014. Guest Lecture. 

 

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The Multiple Use Land Management Policy in Idaho’s Sawtooth National Forest: Evolution, Efficacy, and Evaluation for the Future

Since 1976, the prevailing doctrine for managing public lands has been the Multiple Use policy, defined as “…The management of the public lands and their various resource values so that they are utilized in the combination that will best meet the present and future needs of the American people....” (Federal Land Policy and Management Act of 1976). Working in the scope of this project, we examine the present and future land use concerns of land users in the American West.

A Study of the Lower Granite Dam and its Effects on Idaho

The removal of the four Lower Snake River dams is a highly contested topic. The Lower Granite Dam in particular raises a number of issues, from the flooding of Lewiston, Idaho, to fish migration.

The Eastern Snake Plain Aquifer: Water Management Conflicts and Strategies

Water is at once our most precious and most mismanaged resource. Improving efficiency in how we consume our water is thus a hallmark of any effective management strategy. In the process of conducting our research along the Snake Plain, however, we found that even efficient practices are subject to conflict, controversy, and their fair share of management issues. The depletion of the Eastern Snake Plain Aquifer (ESPA) in southern Idaho presents just such a conundrum.