Wyoming is in Trouble!
Wyomingites raised the roof when Donald Trump upset would be president Hillary Clinton. Trump a pro coal, pro energy president now held the highest office in the land. With Trump in federal regulations would be repealed, coal, oil, and gas prices and the future of Wyoming would soar. Trump would be Wyoming’s savior or would he? Jump ahead one year into his presidency. Yes; regulations have been curtailed, but prices for coal and gas have not come up and oil only slightly. In fact, the CREG report projects the demand for coal will continue to decline as natural gas takes more and more of its market share. The price for natural gas will also decline as more and more gas fields come on line. Demand for oil will continue, but prices will only slightly increase due to large reservoirs on shore and off. What does this mean for Wyoming? The new normal for revenue is here to stay and it is millions of dollars less than what we are use to. The boom of the coal era is over! Not even Trump can bring it back.
For nearly half of Wyoming’s history coal has been the mineral that has built modern day Wyoming. State of the art schools and the 7th highest in the nation on school appropriations. All that is about to change. School funding along with many other spending cuts is inevitable or is it?
The mineral sector accounts for about 70% of Wyoming’s revenue. This comes in the form of severance tax (production tax), federal mineral royalties, and mineral lease bonuses. Wyoming collects 100% of the severance tax paid by mineral companies, but only 48% of federal mineral royalties and lease bonuses. In 2007-2008 the states share of the mineral royalties and lease bonuses was nearly a billion dollars a year, which means the federal government kept nearly a billion dollars a year of Wyoming’s natural resource revenue. No one complained, there was plenty of money for both the state and the feds. Ten years later that number has been cut almost in half; the feds keep over one half billion and the state gets just over one half billion. What would happen if all of the mineral royalties and lease bonuses came to Wyoming instead of 48%? Wyoming would essentially be at the top of the boom again even though prices and demand for our natural resources had declined significantly.
There is just one problem. The federal government likes taking over half of all mineral royalties and lease bonuses and are unlikely to give it up just because Wyoming is hurting. A Congressional Act to transfer title to all the public lands and hence all of the mineral money will never happen. They barely were able to lower taxes. Lawsuits? The chances of that happening are slim to none given the fact that we have been fighting for our rights in federal court since we became a state in 1890. That leaves the third option rarely used in United State’s history, state nullification.
State nullification is simply that, the state nullifies the existing relationship. In other words, Wyoming would stop recognizing federal jurisdiction over Wyoming lands. It would take a strong minded governor, but it would not be that hard to do. If I were the governor, I would send out notice to all public land employees working in behalf of the federal government that Wyoming no longer recognized federal authority over Wyoming lands. I would give them three days (they would know in November this was going to happen) to evacuate their buildings or face arrest by the state police. I am assuming most would make us arrest them. They would be charged with something simple and released. Meanwhile, employees of the Wyoming Department of Lands would move into their offices. If federal law enforcement officers try to arrest any of Wyoming’s employees they will also be arrested and charged. Needless to say this would start a war of words and saber rattling the likes of which hasn’t been seen since the civil war. However, I do not believe it would go any further. These days we fight in court not on the battlefield. They would claim jurisdiction and so would we. After a few months and the dust settles negotiations for an official transfer would begin. Meanwhile, notice to all mineral companies would go out that unless their payments were made to the state they would be shut down. Wyoming would receive the revenue and be in control of all decisions.
It is the only way. Whining, complaining, and filing lawsuits over federal overreach will never accomplish anything. It is time to fix this problem once and for all. Our “Ace in the Hole” is the U.S. Constitution and the Tenth Amendment, which I believe is clearly is on our side. To learn more about how the U.S. Constitution and Tenth Amendment is on our side I am including an e-copy of my book. If you are ready to make history please contact me and join the team.