As an update to the Recipe Box, I have been testing out new recipes lately.

Testing recipes means that I am trying out things that I have never attempted to bake before…the risk is high and the reward unknown.  You could end up with a masterpiece or you could end up with the creature from the black lagoon.

For example, I tried a new pound cake recipe that had sweetened condensed milk in it as a secret ingredient; the result was a sunken in disaster contained in my bundt pan.  The secret is out – that ingredient didn’t work! I tried a blonde brownie recipe that ended up more akin to blonde brownie soup for some reason.  It just would not bake up in the middle.  Then I went back to basics and baked a simple cherry pie to make sure that all was right in the world and that I could still bake.  If there is certainty in life in anything for me, it is with pie – sometimes you have to break out a trusted recipe after too much unknown.

When you put the pan in the oven when you are testing a recipe, the future is very uncertain.

This is a lot like the future of coal in Wyoming…

Coal in Wyoming is a lot like flour in your cake. It is, or traditionally has been, the backbone. Take Kemmerer, Wyoming, for example – its future is now uncertain due to its historical reliance on coal. Coal has been a significant factor in Kemmerer’s health and viability historically. A recent article in the Casper Star Tribune entitled, Indebted Coal Firm that Operates Kemmerer Mine Finds New Financing, Still Faces Uncertainty, highlights these issues for coal-reliant communities in Wyoming, like Kemmerer.

The future of coal in Wyoming is obviously unknown due to a number of factors, including market conditions, federal regulation and politics.  In fact, the impact of state politics on the future of coal was discussed in a recent Casper Star Tribune article entitled, Wyoming’s Governor Has Walked a Moderate Path on Coal, Now Candidates are Lining Up to take the Reins.

The other big factor that has an impact on the future of coal is a basic one – financial pressures. A great discussion of the money factor and its impact on coal can be found in the Casper Star Tribune article entitled, Wyoming Coal Newcomer Argues that it Failed to Make Debt Payments Because the Bank Ceased Communications.

What will happen to Wyoming coal?

Your guess is as good as mine, but the one thing we do know is that change is certainly afoot. We discussed the Wyoming Integrated Test Center in our last post, which can be found here.  Big and new things are on the horizon for coal – however, it is the same as when we are testing recipes…we have to just wait and see how it will turn out.

Many of you may not be aware of the happenings in the Cowboy State concerning the future of the energy industry. Wyoming is not just sitting back and allowing market forces to have huge impacts on the state, it is taking steps to be on the forefront instead.  Here are a couple of big things going on in Wyoming.

Carbon Emissions – ITC

A new Wyoming research center is the driving force for change. The Wyoming Integrated Test Center (“ITC”) was dedicated by Governor Mead in Campbell County, Wyoming, last week. Check out the ITC website here.

  • What is the ITC?

Bottom line: It is a big deal – it is a collaborative effort that has the ability to change the future of energy by developing ways we can use power plant emissions.

The specifics: According to the About ITC website, the funding for the ITC came from the Wyoming State Legislature ($15 million), the Tri-State Generation and Transmission Association ($5 million), the National Rural Electric Cooperative Association ($1 million) and Basin Electric Power Cooperative is providing the host site at their Dry Fork Station located in northern Wyoming and additional valuable in-kind contributions (important things like engineers and construction management services). Supporters also include Rocky Mountain Power, Black Hills Power, XPRIZE Foundation and the University of Wyoming School of Energy Resources – the ITC is a true public-private partnership with a shared goal.

The goal is simple yet significant – to develop commercial uses for carbon dioxide emissions. Check out more on the science of this here.

The headline from the Casper Star Tribune says it all, In Unassuming Wyoming, A Quest to Change the National and Global Future of Coal.

Since this project involves coal, obviously it is hotly contested and controversial. Opponents reportedly question the use of taxpayer funds on the ITC and wonder whether the cause is useless because coal is a sinking ship.

Oil and Gas – Secondary Recovery

In addition, secondary recovery in oil and gas operations is a focus of the Cowboy State. The Casper Star Tribune highlighted this focus in its article yesterday entitled, UW Institute Fosters $2 Million of Research into Oil and Gas Recovery in Wyoming. The Enhanced Oil Recovery Institute reportedly, “announced recently that $2.2 million of research is about to roll out in Wyoming.” The plan is to dig deep into figuring out ways to increase secondary recovery and optimize production using new technology in Wyoming’s old wells.

Wyoming is clearly a force for change in the energy industry – there is something to be said for that Cowboy grit and work ethic. Cowboys know when to adapt and when to buckle down to figure out a problem. One thing is true – do not underestimate the Cowboy state.

 

Many of you know that when I travel, I tend to start to wonder about that state’s energy sector. What fuels it? What makes it different from Colorado and Wyoming?

This weekend, I was in Nashville, Tennessee – “Music City.” I started to wonder, besides being the home of country music and amazingly fun honky tonks where folks from all over the country come to kick their heels up, what fuels Tennessee?

It’s not all country music, hot chicken, cowboy boots and southern hospitality. Tennessee has more going on in the energy sector than one might think at first blush. Biofuel, a little oil, hydroelectric power, coal, natural gas, nuclear, wind, solar…Tennessee has it all.

According to the U.S. Energy Information Administration’s (“EIA”) state profile on Tennessee:

  • Most of Tennessee’s electricity generation is supplied by the Tennessee Valley Authority’s (“TVA”) Watts Bar 2, which is the nation’s first new nuclear power reactor in the 21st century (which began operating about a year ago)
    • The TVA operates:
      • 19 dams
      • 2 nuclear power plants
      • 7 natural gas-fired generating plants
      • 6 coal-fired plants
  • Tennessee is home to the nation’s third-largest pumped storage hydroelectric generating facility and more than 2 dozen hydroelectric dams
    • In 2016, it had the 8th highest net generation from hydroelectric power in the nation
  • Tennessee is home to the Southeast’s first major wind farm, which has been operating since 2000 – it is located on Tennessee’s Buffalo Mountain
  • Selmer, Tennessee is home to the largest solar facilities in the state

While crude oil production in the state is low, the state’s energy profile is very diverse. A more detailed discussion on Tennessee’s energy profile can be found here.

It can be easy to overlook what each state has going on in its own unique energy sector. Tennessee is one of those places that will surprise you with all it has going on, even in its energy profile!

 

127 years ago today, on July 10, 1890, Wyoming was entered into the Union as the 44th state. As we celebrate the date of Statehood, here is an update from the Cowboy State:

According to the Casper Star Tribune’s Energy Journal of today’s date, which can be found here, activity in the energy sector is picking up in Wyoming.

The rig count in Wyoming as of July 7, 2017, according to Baker Hughes, is sitting at 25 rigs – this is up 17 rigs from one year ago, when the tally was 8 rigs.

Recent headlines in Wyoming have included the following:

The talk around the Cowboy State has shifted from its normal energy-related focus to the upcoming solar eclipse, The Great American Eclipse – on August 21. The eclipse’s path is expected to make its way through the entire central region of my home state and reportedly spans more than 365 miles of Wyoming. The center of the eclipse path will reportedly pass slightly south of Dubois, Wyoming.

Happy birthday to the Cowboy State!

EIA May STEO

The U.S. Energy Information Administration (“EIA”) released its Short-Term Energy Outlook (“STEO”) yesterday for the month of May – the forecast highlights can be found here and the full report can be found here.

Here are a few of the main takeaways from the May STEO forecasts:

  • Crude Oil – the recent drop in prices may continue:

According to the petroleum and natural gas markets review portion of the May STEO:

“Expectations of supply growth in 2017, particularly in the United States, as well as concerns that a potential extension of the [OPEC crude oil production cut] agreement will not reduce global inventories as quickly as expected contributed to a sharp drop in crude oil prices in the first week in May.”

“EIA projects that the global crude oil market in 2017 and 2018 will have more supply growth compared with the April STEO, resulting in a lower forecast of crude oil prices in the coming months.”

  • Coal – increased demand predicted:

According to the EIA’s Forecast Highlights regarding coal in the May STEO:

“EIA expects growth in demand for U.S. coal exports to contribute to a 5% increase in coal production in 2017.”

According to the EIA’s Notable Forecast Changes:

“EIA forecasts coal exports to average 63 million short tons (MMst) in 2017 and 60 MMst in 2018, these are 5% and 14% higher, respectively, than forecast in the April STEO. The export forecast is higher than last month because of slightly lower expected domestic use of coal for electricity generation and because of higher assumed global coal prices.”

  • Wind – capacity expected to rise:

According to the EIA’s Notable Forecast Changes:

“This month’s STEO forecast for wind power capacity in 2018 is 7% higher than in the April STEO because of new information about planned capacity additions. Wind capacity is now projected to rise from 88 GW in 2017 to 102 GW in 2018, an increase of 16%.”

Only time will tell if these forecasts will come to fruition – stay tuned.

 

Wyoming aeral shot 4.14.17

After spending the weekend in Wyoming, I thought I would give you an update from my home state. As you may remember, I come from a long line of coal miners – back when the country was primarily powered by coal, the coal industry also fueled my family.  Today, the update centers on the coal industry.

Help for Coal Miners – U.S. Department of Labor Grant

The big news for the Cowboy State is that, “Wyoming has received up to $2 million to retrain workers affected by layoffs in the coal industry,” as described this morning in the Casper Star Tribune.

You remember…

As coal declined nationwide, Wyoming, the country’s biggest coal-producing state, according to the New York Times, was hit pretty hard about a year ago, when heavy layoffs in the coal industry occurred.  In fact, the New York Times article was entitled, “As Wind Power Lifts Wyoming’s Fortunes, Coal Miners are Left in the Dust” – this grant will help to alleviate that.

For more of a refresher:

More about the Grant

According to the Department of Labor News Brief, which can be found here, “[t]he U.S. Department of Labor approved a National Dislocated Worker Grant for up to $2 million, with $1,080,465 released initially, to the Wyoming Department of Workforce Services to provide reemployment services to dislocated coal workers affected by industry layoffs.”

The funds are reportedly earmarked for northeast Wyoming for the following counties: Campbell, Converse, Crook, Johnson, Niobrara, Sheridan and Weston.

This grant is reportedly “part of a multi-agency effort to invest federal economic and workforce development resources in communities and regions negatively impacted by changes in the coal economy” and “[t]he grants generally provide resources to states and local workforce investment boards to reemploy laid-off workers quickly by offering training to increase occupational skills.”

Takeaway

This is excellent news; however, many folks who were laid off were forced to pursue other options in the past year. By now, many workers have left the state and moved on in order to find work elsewhere. In fact, the New York Times article from last June referred to this as an “exodus.”

Nonetheless, I am sure that many in my home state will benefit greatly from this grant and that the Cowboy State is grateful that coal miners affected by the downturn in the industry are going to benefit from this award.

Don't look a gift horse in the mouth

My grandma always says, “don’t look a gift horse in the mouth.” The saying comes to mind as I read today’s headlines about many aspects of the energy sector rebounding and growing.

The saying basically means, “don’t be ungrateful when you receive a gift.” When you are given a horse as a gift, don’t inspect his teeth to see if he is old or of poor quality.

It reminds me of a good story.  I was in an old cowboy bar in Wyoming and this handsome young Montana cowboy, wearing a big cowboy hat, walked straight up to my friends and I seated at the bar, took my shoe off without saying anything and looked at my foot, asked me to smile so he could see my teeth and said, “You’re the best filly in here. What do you say you marry me?” I remember blushing something fierce. Later, my grandma told me that is how cowboys inspect the quality of horses they are looking to buy – they look at their hooves and teeth! She loved that story of how he tried to pick me up the same way.

I digress…Don’t look a gift horse in the mouth. Don’t wish for more, don’t fail to appreciate the gift – be grateful for what you have been given. That is what we all should be doing with this energy sector rebound and growth. It covers numerous segments of the energy sector and is something to be grateful for.

  • Coal

Despite the odds, coal is doing ok. The Casper Star Tribune reports in its article entitled Despite a Harrowing Year, Coal Shows Resiliency, that “coal has shown its moxie.” Coal production finished strong in the third quarter of 2016 and is reportedly showing a “market correction” and that it may be reaching equilibrium. According to the Casper Star Tribune, “[t]he numbers represent a bittersweet finish line for coal, like a celebration of moderate strength in a patient recovering from life-threatening injuries.”

The article provides, “State economists in October projected Wyoming would reach 300 million tons by the end of the year.”

  • Oil

Luckily, although reports say that the price of oil fell a little today, according to Bloomberg Energy, drilling rigs are getting back to work. Baker Hughes Inc. reportedly showed that “U.S. drillers added rigs for the 10th-straight week to the highest level in a year.” The rig count is reportedly at “the highest level since the week ended [one year ago] January 1, 2016.”

  • Nuclear

In addition, according to Forbes article entitled, “Nuclear Power in Washington State Continues to Break Records,” the Columbia Generating Station, a nuclear power plant near Richland, WA that is operated by the non-profit Energy Northwest, reportedly hit a new record in 2016, it “generated a record 9.6 billion kWh of electricity in 2016, edging out its previous record of 9.5 billion kWh in 2014.”

  • Renewables

All aspects of the energy sector, including renewable energy, are something to add to the “to be grateful for” list. As featured today in a Fortune article discussing Secretary of State, John Kerry’s speech this morning at the Massachusetts Institute of Technology in Cambridge, Massachusetts, entitled, “John Kerry Says Clean Energy Will Yield Job Growth Survival,” implementing greener energy will lead to more jobs and economic development.

With the rebound and growth in the energy sector, we should remember to be grateful. And do as my grandma says, “don’t look a gift horse in the mouth.”

All Hat and No Cowboy

Today, the U.S. Energy Information Administration (“EIA”) released its Annual Energy Outlook 2017. The full report can be found here.

What is the Annual Energy Outlook?

It is a long-term energy projection of domestic energy markets through 2050. It is “modeled projections of what may happen given certain assumptions and methodologies.”

Many uncertainties surround energy projections – here is a link to my previous blog entitled “Is Predicting the Future of Energy Like Driving Down a Dirt Road at Night with No Lights On?”  In fact, energy projections are so uncertain and there are so many different unforeseen factors that can have substantial impacts, many tend to have trouble putting much weight on them at all. Economic conditions, technology, global issues, labor issues, political agendas, state and federal policies and who knows what else – it is difficult to even predict the factors that can attribute to the uncertainty in predicting the future of energy. The Annual Energy Outlook even has an entire section dedicated to attempting to identify the various factors that could influence the model and cause uncertainty (see page 31).

The Annual Energy Outlook to me, is all hat and no cowboy…

That’s Wyoming-speak for “it’s all for show.” No meat and potatoes, nothing strong to really sink your teeth into, nothing to really put your arms around, no true reliable substance that isn’t subject to a thousand unpredictable variables…no cowboy.

But, I will let you decide what you think. Here are the main take-away points of the EIA predicting the future of energy for the United States through 2050 in its Annual Energy Outlook:

  • Although population is expected to rise, overall energy consumption in the United States is predicted to remain relatively flat and is projected to rise 5% from the 2016 level by 2040. Many might ask if this is related to new efficiencies or actual differences in consumption.
  • Natural gas use is projected to increase more than any other fuel source (to account for nearly 40% of U.S. energy production by 2040) and is predicted to cause a decrease in market share for coal consumption. This has been the prediction for as long as we can remember…
  • Energy-related carbon dioxide emissions are predicted to fall at a slower rate than in the past. Many would disagree with this and would argue that the train will stay on the track – that the current rate will at least stay the same, not slow, as there have been modifications to infrastructure and technological advancements continue.
  • That United States crude oil and natural gas production depends on oil prices, resource availability and technological improvements. Many would argue that this is old news, that it does not seem like much of a new concept.

A few predictions do seem to hold at least some water, such as:

  • Renewable energy is predicted to grow the fastest on a percentage basis.
  • The United States will become a net energy exporter. The Annual Energy Outlook predicts that this will occur by 2026.

Is this outlook all hat and no cowboy? I leave it to your opinion to decide how much substance is actually there…

Wyoming Cowboys

There are very few things that I will get up at 5:00 a.m. to do – catch a flight, catch a fish – that’s about it.

This morning, however, I left Denver at about 5:30 a.m. to arrive in Laramie in time to be a guest lecturer for the University of Wyoming’s Agricultural Law class, taught by Justina Floy, Staff Attorney for the Second Judicial District Court.

I previously discussed my last adventure as a guest lecturer in the post, “The Future Looks Bright,” because I was so blown away by the enthusiasm of the students and how highly engaged they were.

This morning’s guest lecture was no different – I pulled into Laramie just as the sun was coming up and excitement was in the air. I was surprised to see that students were already at my favorite local coffee shop to get a little caffeine jolt before class.

The students in Ag Law class again asked thoughtful questions and were curious and insightful. It was interesting to see what topics were on their minds…questions such as:

  • How will the upcoming political changes impact Wyoming’s energy industry
  • Will there be a drastic shift away from coal
  • Are oil companies willing to work through problems with surface owners
  • What happens to access roads after the oil companies no longer need to access their wells

A couple of other very thoughtful questions caught me off guard for an 8:00 a.m. class the morning after Halloween; a day when I remember people skipping their early morning classes and going to get breakfast instead, sometimes still wearing a toga.

In my opinion, the most thoughtful question was:

What industries would I suggest that Wyoming look to in order to diversify its economy so that it is not so heavily reliant on revenue from commodities that are subject to boom and bust cycles.

This question has no easy answer – we discussed other revenue sources for the state like tourism, Sheridan’s new coal mine, renewable energy sources and Governor Mead’s “doubling down” on coal. As discussed in an article from earlier this spring, the full text of which can be found here, Gov. Mead’s revised energy plan includes 11 new initiatives and “includes a ‘carbon innovation’ effort that is intended to further the development of clean-coal technologies and other ways to reduce carbon emissions for conventional fossil fuels.”

The truth is that Wyoming’s youth carry the solution to finding out how to diversify the revenue sources.  They are innovative and bringing their A-game.  Seeing that young and engaged students are thinking about Wyoming’s future energy strategy brightened my day. As I have said before, the future is certainly bright.

Perception

A new national survey and report by Makovsky, entitled How Americans Make Energy Decisions – And the Sources and Channels They Trust the Most, has been recently released. The full study can be accessed here.

As discussed in the Oil & Gas 360 article, New Survey Shows that Americans Significantly Overestimate Renewable Energy’s Role in Powering the Nation, the results reflect a big difference between perception and reality.

As someone who consistently overestimates things (IE: “my car is parked 5 miles from here;” “that trout I caught was at least 29 inches long;” “I am a whiz, practically a professional, on skis, skates, etc. – you name it,” said while hiding my skinned up and bruised knee), I found the results of this survey particularly interesting.

Here are a few takeaways from the survey and the Oil & Gas 360 article discussing the same:

  1. Americans considerably overestimate renewable energy’s role in the U.S.’s overall energy use and seriously underestimate the role of coal, oil and natural gas now and in the future.
  • The survey found that, “In 2016, solar and wind together made up just 3% of U.S. energy consumption, while survey respondents put the figure at 20%.”
  • “Furthermore, respondents predict that wind and solar will make up 34% of energy consumption in five years; however, the experts predict that they will be less than 5% of our energy consumption.”
  1. The most interesting statistic in the survey was about coal, oil and natural gas usage:
  • “And, although coal, oil and natural gas together comprise 87% of energy used today, survey respondents estimated them at 69% of the mix – underestimating how much these fossil fuels still dominate today’s energy mix by about 20%.”
  1. Biggest takeaway: Americans do not appreciate that coal, oil and natural gas are the primary energy sources in the U.S.
  • “More specifically, Americans viewed the nation’s dependency on oil to be in a trend of decline, providing only 20% of our energy needs in five years, an eight-point drop from current perceptions.” According to the survey, coal is perceived to be experiencing a similar decrease in five years.
  • The survey provides that in reality, however, the EIA’s forecasts tell a different tale. “EIA forecasts that oil and coal use will be about the same as they are today [in five years].”
  1. TV is king.  The good thing is that Americans are interested in news related to the energy industry – TV news rated as our main source of energy information in the survey. The conclusion of the survey is that energy companies must realize these incorrect perceptions and address them head on in their marketing efforts.

Perception can be misleading…it is vital that we understand the roles of oil, natural gas, coal, solar and wind energy.