Towns grapple with energy transition


Communities in southwest Wyoming got a double dose of bad news this month as oil and gas company Halliburton announced layoffs at its Rock Springs headquarters just as Wyoming utility Rocky Mountain Power finalized a plan to fast-track the retirement of four of its six coal-fired power units.

Residents here are accustomed to the volatility of the oil and gas industry. But as the clock ticks toward coal plant retirements, few locals deny that the nationwide shift from coal in favor of renewables will fundamentally alter the economic landscape of southwest Wyoming. Despite that, residents and leaders have yet to come together in a formal capacity to forge a transition plan. 

Sweetwater County Commissioner Jeffrey Smith said the combination of Halliburton’s layoffs and Rocky Mountain Power’s pending closures doesn’t feel like the harbinger of a bust. At least not one as significant as the downturn of the ‘80s, when bumper stickers reminded everyone, “Last One To Leave, Turn Out The Lights.”

The region’s trona industry is preparing to expand, Smith said, and Rocky Mountain Power will continue to operate two of its four coal units at the Jim Bridger Plant outside Rock Springs well beyond 2030.

“I think it’s kind of a mixed bag,” Smith said. Still, local leaders wonder whether the region can attract new high-paying jobs that might help slow the continual exodus of Wyoming youth who move to urban areas in neighboring states where the rate of job growth is double, and sometimes triple, Wyoming’s.

Wyoming ranks third in the nation for losses among its millennial population, according to the Wyoming Department of Workforce Services’ August edition of Trends. The age group shrunk by 5.1% from 2014 to 2018, a rate only exceeded by Vermont and Rhode Island. 

“It’s something of a difficult sell right now,” Smith said of the area’s appeal. “Younger people might love living here and love the hunting and everything else. But is there a job that’s not oil and gas, and I’m not going to get laid off? They hear of Halliburton, and that scares people off. They hear of Rocky Mountain Power. And so do people want to stick around?” 

Losses stack up

In an email statement to WyoFile, Halliburton spokeswoman Erin Fuchs said the company is not providing location-specific job-loss numbers. Commissioner Smith said his constituents estimate the number of layoffs in Rock Springs at 185 — 28% of the 650 jobs trimmed throughout Halliburton’s Rocky Mountain region. Employees have been offered job opportunities at Halliburton’s operations in Texas and North Dakota, Smith said. Despite that, he said, the layoffs came without warning, and it’s hitting families hard.

“Do you want to pick up and move your family in the middle of the school year?” he asked. “Mom or dad pick up and start living in North Dakota and come home every two weeks? It’s very disruptive, certainly. It makes it really hard for families. It is, unfortunately, the nature of the business.”

In the early 2000s, Rock Springs served as Halliburton’s largest fracking headquarters in the world. Halliburton plans to remain active in Wyoming,  spokeswoman Fuchs said. “Regarding a short-term plan, we will continue to have a footprint in Rock Springs and will keep some cement crews in the area,” Fuchs said via email. “We also have multiple service lines operating out of Casper.”

Utility giant PacifiCorp, which serves customers across a six-state region in the West and operates as Rocky Mountain Power in Wyoming, first gave notice in early 2019 that it was considering moving up retirement dates for some of its coal-power generation fleet. On Oct. 18, the utility submitted its final Integrated Resource Management Plan to the Wyoming Public Service Commission confirming those plans. 

In Wyoming, the utility proposes to retire one coal power unit at the Jim Bridger power plant outside Rock Springs in 2023 and two Naughton coal units near Kemmerer in 2025. Another unit at Jim Bridger will go offline in 2028, and all four units at the Dave Johnston plant near Glenrock are set to close by 2027. Jim Bridger coal units 3 and 4 will continue to operate until 2037. 

Rocky Mountain Power spokesman Spencer Hall declined to speculate how coal unit closures could affect job numbers in Wyoming, but said the utility hopes to avoid any layoffs, instead relying on attrition and reassignments elsewhere within PacifiCorp. He said the utility is recruiting workers in preparation for major expansions in transmission and wind energy. It plans to add 3,500 megawatts of new wind generation in Wyoming by 2025, and another 4,600 megawatts of wind in the state by 2038.

“We still have a lot of really attractive jobs, and we’re constantly recruiting,” Hall told WyoFile. “The future of energy in Wyoming will be different, but it’s still a great opportunity, and we’re still invested in Wyoming.”

Aging plant workers, and a young population moving on

Roger Varley is manager of the Varley Mercantile, a fourth-generation business that encompasses a bar, restaurant, gas station and trailer park. The latter comprises most of the unincorporated town of Point of Rocks 31 miles east of Rock Springs. The mercantile, which sits just off of Interstate 80, has served as the gateway to the Jim Bridger Plant eight miles north since the plant began operating in the mid-1970s.

“It’s not a dull life,” Varley said. “People can’t imagine that living in a little bitty ol’ town next to the interstate here can have much excitement to it. But I tell you, it’s like living on the main street of the country.”

Plans to downsize operations at Jim Bridger in the next 10 years promise significant changes for Varley’s operation, he said. But he has no plans of going anywhere. “We were here before the power plant, we’ll be here after the power plant,” he said. “It’s just going to be a different lifestyle than we’ve been used to.”

Varley has observed many recent retirements among his Jim Bridger clientele, he said, and heard of more plans to retire soon. “Most of my contacts are sort of at the end of their careers, so they’re kind of just going to ride the wave to retirement,” Varley told WyoFile.

The semi-annual “turnaround” for upgrades and maintenance at the plant used to draw 200 outside workers for six months, prompting a huge spike in spending at his and other businesses, Varley said. In recent years, he said, the turnaround work seems to draw only 30 or so workers for a shorter period. 

As a businessman, and a resident with deep family ties to the area, Varley said he worries that young people will continue to move away to urban areas outside Wyoming. He said he’d like to see a concerted effort to diversify the local economy to give younger generations more opportunities to stick around. But he’s also tempered his expectations. 

“The politicians and I have definitely had that conversation, because they’re always looking for the next great thing that’s going to save us,” he said. “And I’m afraid that I’m a little bit of a fatalist when it comes to that, especially in Sweetwater County.”

Unless it can provide high-paying wages, Varley said he doesn’t see tourism and outdoor recreation as a way to stop the migration of young people to neighboring states. “It’s just that it’s 7,000 or 8,000 feet [in elevation], and the wind howls through, and there’s not a lot of trees,” Varley said. “People who were not raised here don’t see the beauty … We get seven inches of moisture, and it all comes in the form of snow, and it all comes in sideways.”

Roger Varley’s nephew, 31-year-old Mark Varley, has worked at the family business in Point of Rocks his entire career, and said he plans to stick it out there. “I think there’s plenty of jobs to choose from, but high-paying jobs like the mine or oilfield seem to be drying up,” Mark Varley told WyoFile. “There aren’t many young people around … A lot of my friends moved to Colorado, Washington or Utah.”

Generational changes ahead

Authors of Wyoming’s annual economic review, the MACRO Report, published on Sept. 30, listed their top three concerns for the state’s economic picture:

° The coal mining industry is losing jobs, while oil and gas jobs showed almost no growth in 2019.

° Natural gas and coal production recorded large year-over-year declines.

° Single family home construction showed little change at the state level through the end of August.

Wyoming’s job growth rate of about 1.6% lags behind neighboring states: Colorado is at 2.3%, and Utah and Idaho are both at 3.3%.

Meantime, Wyoming’s millennial population shrunk by 5.1% from 2014 to 2018 — the third highest rate of decline in the nation. “If millennials continue to move to big metro areas, the state may face a serious labor force shortage and faster population aging in the near future,” said Wenlin Liu, chief economist for Wyoming’s Economic Analysis Division, in the August edition of Trends.

State economists also noted that some in Wyoming’s aging workforce are delaying retirement. “The number of older workers increased, as more baby boomers continued to work past age 65,” according to Trends.

Tom Gagnon, 57, moved to Rock Springs from Colorado 15 years ago to work on a Halliburton fracking crew. Today he owns rental property and occasionally substitutes at the high school. In that position, he has watched many young residents move on. 

“Some [students] go off to Laramie with the Hathaway Scholarship,” he said. “Then they seem to drive down [US Highway] 287 to Fort Collins and they don’t come back.”

Gagnon believes communities and the state should consider new social markers, such as legalizing marijuana and expanding Medicaid, as part of their response to declines in fossil fuel industries. To retain young families and attract talented workers, communities must prioritize amenities such as parks and bike paths and encourage recreation at nearby public lands, he said. A concerted effort could be made to attract retirees who feel squeezed out from neighboring urban centers in Colorado and Utah, he said.

“Wyoming has, accidentally, excellent conditions to attract retirees; low property taxes and no income tax,” Gagnon said.

Commissioner Smith, who oversees assisted living facilities in Rock Springs and Casper, said that while he’s concerned about where communities will find future high-paying jobs, he’s also bullish on the prospect for economic diversification. Local governments are making land deals in hopes of establishing a new industrial park near the Rock Springs airport, and community leaders are hoping to land a new business incubator modeled after the Wyoming Technology Business Center in Laramie.

Construction crews are building new homes in Rock Springs that will be offered in the $400,000 to $500,000 range, Smith said. “There are people who are doing fine and are not worried about it, and others are in industries that seem to be struggling,” he said.

The plea for economic diversification and concern about how to keep and attract young families are familiar themes at Sweetwater County Commission meetings, Smith said. For example, one trona company is essentially running its information technology work from Texas because employees with those skills don’t want to make the move to Wyoming, he said.

“So that’s tough, you know,” Smith said. “So OK, what do we do to find people who want to move to Wyoming and take advantage of Flaming Gorge and all of the stuff that’s sometimes harder to point out to them? It’s our job to point that stuff out to them to make sure people know what’s here.”

Ninety miles west in Kemmerer, the community of 2,700 recently endured the chaos of a bankruptcy at the Kemmerer mine that supplies Rocky Mountain Power’s Naughton coal-fired power plant. Although the nearby Opal natural gas hub and Shute Creek natural gas processing plant provide steady high-paying jobs, Rocky Mountain Power plans to unplug two coal units at the Naughton plant in 2025 and convert the third unit from coal to natural gas. 

Kemmerer mayor Anthony Tomassi said a new $277,000 grant from the U.S. Economic Development Administration’s “Assistance to Coal Communities” program and matched by local agencies, will help fund an economic diversification study. But, he said, few people in town have stepped forward to take the reins on shaping a future less reliant on high-paying industrial jobs. 

“You’d like to have more companies to keep more young people home,” Tomassi said. “But I don’t think we’ve talked strategy yet.”

 

WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.

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