Lex Anteinternet: Issues In the Wyoming Election. A Series. Issue No. 1 (a). The Economy again. . . the extractive industries

More on the Wyoming economy. . . which is sitting there just to the right of the photo.

I just posted on Wyoming's economy, in the context of the election, here:

Issues In the Wyoming Election. A Series. Issue No. 1. The Economy

In this post we don't propose economic solutions.  Indeed, while we have in the past, and will do so again in the future, this post doe...

In that I borrowed Harriet Hageman's stool analogy, which all other other candidates essentially use in one form or another, and then went on to place the economy in context, I hope, in terms of the election.

In doing that one thing that I think perhaps came through is that while all of the candidates talk about the economy, they all tend to do so on a superficial level, or even on an unrealistic level. That was made pretty plain in the Trib's interview of David Dodson, Republican Senatorial candidate, who essentially thinks that simply being a salesman for the state would cure our economic ills.

Not so much.

Here we look at one of the "stool legs".  More will follow but as the first leg of the stool I mentioned is so often cited, it's worth taking a closer look at.

The extractive industries.

To listen to every major candidate except for Democrat Throne you'd get the idea that (Republican controlled) Washington D. C. has the extractive industries in chains and that this is keeping the industry down.

This is a bit surreal for a variety of reasons

And as noted before, I've covered that before, which I'll set out, in part, here again in a long winded way (but for a reason):

The Wyoming Economy. Looking at it in a different way.

 

 Big Horn foothills. There's a reason why I've posted this here, but you'll have to slog through the post to discover why.

I thought about starting this thread just the other day.  On what must surely be a "Great Wyoming Minds Think Alike" type of day, Neil Waring, on one of his blogs (like me, he keeps more than one blog) posted this item on the same topic:

Let's look at how I summarized this stool leg earlier.  Here's what we wrote:

The extractive industries

Almost all of our real industry and almost all of our government revenue derives from the extractive industries.  Everyone depends on them.  The way it works is this way.  The resources is taken out of the ground and taxed.  That's where the state gets most of its revenue.  If the lease if public, the Federal government or the State gets more revenue, depending upon who holds the lease, and if that lease is Federal the Federal government pays back to the state an additional amount.  Obviously, the people working in the extractive industry make their money there. But so do all the vast number of support industries.  And that ripples out from there. As oil companies lay people off, for example, the support industries start too. And soon, not all that long thereafter, the hotels are empty, etc.

 

Early Wyoming oilfield.

Indeed, the Alaskan fishing industry was down in town the other day recruiting laborers used to hard physical labor to work on fish processing boats.  Seems odd, but makes sense.  When we couldn't find laborers in this state we recruited in depressed Michigan for the same reason.

Anyhow, with coal, oil, natural gas, and uranium all in a slump. the state's really hurting.  And it should be noted that this always tends to happen in this freakish way. There's no reason that the price of petroleum oil should fall along with coal, let alone uranium, but that's happened to us before.  An entire town in northern Carbon County disappeared just as the coal mining towns were starting to nearly disappear, and this in the 1980s.  Here we go again.

Well, whenever a slump happens we tend to wring our hands and declare, like The Who, that "We Won't Get Fooled Again" by the cyclical nature of the extractive industries.  Here we must note that some are so invested in the concept that the extractive industries are Wyoming that to even say that is taken as some sort of slam against them, which isn't true at all. Rather, we have to acknowledge the nature of those industries, which is that they boom and bust.  When they are booming, the income and revenue stream they provide to the state is great.  When they crash, however, it's a problem if we haven't prepared for it, and we seem not to.

As part of that, and here we need to be thinking of coal and its future, some of our former extractive industries do indeed disappear over time.  Wyoming at one time mined iron and gold.  It doesn't anymore.  Indeed, I posted some photos of a former gold mine at South Pass on a thread at Holscher's Hub, that thread being this one:

The Carissa Mine, South Pass Wyoming
 

Even within the last fifteen or so years there's been speculation about the possibilities of opening the mining at South Pass back up.  Well, I suppose its a remote possibility, but the key word  there is remote.  Sometimes the bust is for keeps.

Indeed, one of  my grandmothers on my father's side was from Leadville Colorado.  She was born there.  Her father had come there as a gold miner originally.  He switched to being a merchant, and they later moved to Denver, but Leadville provides a good example.  Leadville's mines closed and the town limped along for decades before remaking itself into something else, finally accepting that gold and heavy metal mining was not going to come back.

Now, I'm not saying that petroleum oil and natural gas will not come back. They may not come roaring back, but they'll come back.  But we should be cautious about assuming that they'll come back in the same way that Rick from Casablanca assured Elsa about regret, that it would come "maybe not today, maybe not tomorrow, but soon, and always."  The reason we should be cautious here is that there is reason to believe, at least with petroleum oil, that we may in fact be living in a new production regime.  For years people worried about "peak oil", with people who enjoy being alarmed particularly enjoying worrying about it. But it turns out that the problem here may not be peak oil, but we don't need the oil as much anymore, and that this trend will grow.  It seems to be.  In fact Saudi Arabia is literally banking on it, ramping up production to dominate the market while it scoops up what it thinks is the last of the oil bucks.  This doesn't mean oil will go away entirely, but it might mean that in an environment in which it is used increasingly less as a fuel it won't have the value it once had.

It seems unlikely that we fact the same story with natural gas, which is likely to be used more in the future.  The problem here is, right now, that there's a lot of it, so the price is depressed.  We shouldn't assume that this will be the situation for eternity, however, and therefore we ought to really pause when we see gas being flared, as someday we may wish that we had it to sell.  Right now, however, the price is in the basement.  This past week the industry pinned some hopes on being able to export gas to China, which a recent Federal statute encourages.  We'll see how that goes.

With both petroleum oil and natural gas we'll also have to watch the advance of technology, which has been a huge factor in the recent boom. Hardly noticed it was also a factor in the slow revival of uranium with technology advancing so much in regards the mineral that scares the dickens out of the very people who should embrace it ardently that we don't really mine it in the conventional sense anymore. We drill for it and "mine" it in solution.  So here, the mineral that once created enormous mines with high paying jobs does not even with the price is good.  It still provides jobs, bu they're drilling jobs and infrastructure jobs.  Indeed infrastructure in some ways turns out to be the long term stable set of jobs for petroleum, gas and uranium.

I'll omit addressing the sad state of coal as I've written about it so much recently.

Anyhow, all that is really background for the observation that Wyoming has had a strong attachment to the petroleum industry since day one, but we've had a hard time ever accepting the boom and bust nature of it.  This isn't a criticism of the industry so much as its an observation on the reality of our blindness to problems in this area.  So this has always been a part of our economic picture, and that's what I propose to examine here, our long term economic picture.

The state's economic constants

As far back as you can go in Wyoming's history there are certain economic constants.  Some of them are that we have a collection of industries all related to one thing that just keep on keeping on.  Another is that we have hoped for the extractive industries to work economic miracles from our very onset of existence.  A third is the background role of government in providing jobs, even when we've been hostile to that.  Let's look at that.

And let's look again at oil.

Oil, and the other extractive industries, but oil very much in particular has been the expectant economic hope of Wyoming almost from day one.

July 15, 1891, Natrona County Tribune, reporting on both oil and gas production. 

This may be surprising, really, for those who think of the early history of Wyoming all in the context of cattlemen, or perhaps earlier in the context of Mountain Men and Indians.  And it is certainly the case that cattlemen and Indians are part of the story (and still are, and we'll be looking at that shortly), but oil was expected to bring big returns early on.  Indeed the first time I realized that was in trying to research the Johnson County War back when I was in high school, as I plowed through a pile of microfiche issues of the Natrona County Tribune.  Issue after issue discussed oil finds, not, I expect, what we expect to see from a Natrona County newspaper in the 1890s. But it's there. 

Okay, well so what? 

Well, the point is that oil, gas, and coal are there and always have been.  But the boom and bust nature of those industries has always been part of them.  When the price rises, as it always has, we leap into them great guns.  After awhile we expect the boom to be eternal, even though there's always good indicators that the boom will not be.  And we are always surprised by the crash. 

Wyoming Oil World, June 15, 1918.  A crash was soon to occur with the end of World War One. 

A real change, it should be noted, has occurred in the oil industry since the 1980s, and that's been the demise of the local refinery.  This has to be noted here as its significant, and ties into what I'll later note.  Wyoming had refineries almost from the onset of oil exploration here.  Casper had three refineries here in town up until the 1980s. Every town in Wyoming had one, it seemed.  Glenrock had a refinery.  Laramie had a refinery.  Now we have four operating refineries of which I'm aware.  Maybe there are more, but I'm not aware of them.  Refineries provided good blue collar jobs for decades, now they provide very few.  In fairness, gas plants have come in whereas up until fairly recently we didn't have many of them.  But that points out what I intended to note above.  Gas builds and is still building infrastructure in Wyoming.  Petroleum oil does as well, but not in the way it once did. Refining has tended to shift to super huge refineries on the Gulf Coast, which can take in U.S. production, and also take in imported production.

 

Standard Oil Refinery in Casper. 

So what we can accept here is that oil and gas will remain, but in looking at this aspect of our economy, can't we do more to build local stable jobs from that?  We'll round back around to that towards the end.

And so how did I sees that in the context of the economic future and building a more stable Wyoming economy?  Here's what I had to say on that:

So where do we go?

So then, what to make of this?

Well, usually when we go through a crash, we start to talk about diversification.  We also usually start to take about cutting back government spending.  And we're going to have to talk about a new government revenue sources, or having a state government that matches the money we take in.  It's probably time for all of that.

Maybe its' time to talk about building upon what we have, and actually realizing what that is.  And, as we can see from the above, in terms of private industry, that's agriculture, tourism and mineral extraction.  And, like it philosophically or not, we have a lot of government employment in this state and government entities that are pretty darned involved in some sectors of the economy, particularly oil and gas, already.

So, what do we have to build with?  Let's start with mineral extraction. 

Mineral extraction?  Perhaps you're thinking "why I thought you were arguing against relying on that?"  No, I'm really not. I'm arguing that we have to be smart and realistic about that.

The boom and bust nature of much of the mineral industry is a feature of it that is pretty fixed, long established by history, and that's all largely beyond our control.  We have to accept that.  But these industries aren't going completely away.  Even coal, which is in real trouble, isn't going completely away and indeed even right now there's an effort by one coal company to start a mine near Sheridan. 

The thing we can do, therefore, is to be smart in our planning on these industries.  And that would have to accept that they're going to have rocky periods. 

We may also want to be very careful, and we very rarely are, about thinking that when times are good that they're going to go on forever.  There are those who will act that way and they nearly take any suggestion to the contrary as a hostile comment.  Planning for the crash ought to go on during the boom, rather than waiting until it occurs, and that's just smart. 

It's also smart to recognize long term trends, none of which are hugely favorable towards the fossil fuel industry.  Recognizing that isn't being hostile, once again, it's just recognizing it. 

And perhaps we also ought to at least ponder that, like the oil exporting nations of the Middle East, we really don't do much with the raw product anymore.  We did at one time with petroleum oil, in that we did refine it here, but we no longer do that.  Natural gas, because of its nature, is "refined", or rather processed here, and that will go on.  We ought to consider all of that, however.  We never processed the iron we mined, for example, even though we had all the things necessary to do it (except, perhaps, the large scale shipping necessary for that). 

Now, at this point in time, I may have to admit that the ship has sailed on all of these things.  Down to a handful of refineries, I don't see that industry coming back.  There's a reason that super sized refineries are all located on the Gulf Coast.  But if we're not going to process our raw products here, maybe taxing slightly what we export would be a good idea.  Nothing radical, but to add a little bit of a tax in addition to the existing ones for what is departing would not impact the price and might help us out quite a bit in lean times, particularly based upon how the funds were earmarked.  And who knows, maybe that would encourage a little processing here as well.

All of which might do nothing at all, I'll concede.

Okay, at this point I'll admit that all I seem to be doing is repeated myself.  As I'm repeating myself.

But everything I wrote there I think still holds up.

Indeed, I think recent evidence shows that my analysis in this are was fully correct.  The petroleum industry has partially rebounded, indeed significantly own, all on its own due to market forces and not anything else.  The coal industry has reestablished a new normal at a lower production level, again all its own, but it's clear that long term power industry fuel trends paint a bleak future for it of slow decline. As we've also noted, that decline has been going on for a century.  There is an anti regulation President in the White House and regulations, I'm told have been very much curtailed.  In spite of all of this Wyoming's candidates keep talking of "cutting regulations" under the theory that this will, at this point, do something.  It's been done.

What is also the case, as I've described before, is that the industry has now changed technologically and at the exploration end, and maybe even downstream, it will require fewer employees per unit than before.  Our local politicians also seem to miss that.  Everyone is also missing the fact that petroleum consumption, but not gas consumption, is on a long term decline nationally as a new generation of Americans have seemingly lost the American love affair with the car.

The long and the short of it is that, in terms of production, there's not much the state can do.

Would this mean that the state can't do anything about jobs associated with the petroleum industry.

Well. . . .it probably can, but I doubt that it would want to.

Wyoming lost jobs on the exploration side during the recent downturn. But before that, it lost jobs on the manufacturing side back in the late 70s and early 80s. That's when our refining industry started to slide. And its never come back.

As an example, up into the late 1970s Casper had three refineries.  It now has one.  If we look back to the mid 20th Century a lot of towns and cities in Wyoming had refineries that no longer exist.  Laramie, for example, had a refinery, now just a rusting hulk south of town.  Thousands of jobs existed in those facilities.

Since that time, we've acquired a lot of gas plants, as gas has to be processed locally.  Petroleum does not, however, and throughout the United States refineries in the interior have been closed as giant refineries on the Gulf Coast replaced them.

This is the one area in the petroleum industry where local jobs could be created. ..  but the industry isn't going to take that step.  I.e., if new refineries were built in Wyoming, and plants that processed petroleum into various products such as plastic, there would in fact be thousands of local jobs  created.

That isn't going to happen, and in fact the opposite is going to happen.  Long term, the industry wants Gulf Coast refineries for a variety of reasons.  And those reasons make sense for the industry.

But, and this is a radical thought, the state could do it.

But it won't.

You are familiar, of course, with Dakota Mills and South Dakota Cement.  Indeed, you read about them here.

Okay, its one thing to point all of these things out, but what of it.  We don't have packing plants, mills, etc.  What, a person might ask, do you propose? 

Well, I'd propose something that Wyomingites hate, state assistance for private enterprise, or even direct involvement in it. 

Now, before people have their hackles up too much, let me point out that we only oppose this to a limited degree.  We're actually okay, based on our track records, of supporting start ups with grants.  We're also okay with investing in doubtful technologies, if they relate to the mineral industry.  Witness there all the money the state is sinking into Clean Coal Technology.  I'm not opposed to that by any means, but we must admit that the chances of it ever paying off are remote. 

So, before we get too much further, let us consider North Dakota Mill and Elevator. 

Eh? 

Postcard of the North Dakota State Mill, 1915. 

While nearly a neighboring state (it doesn't border us, but you can sprint across the corner of South Dakota and be there in no time at all), North Dakota, which we will return to when we discuss education, has a really different cultural history compared to Wyoming.  With a heavily Scandinavian immigrant population from early in the 20th Century, North Dakota had and still has a political culture that, quite frankly, was occasionally sympathetic to socialism. 

Now, let me be frank, I'm not terribly sympathetic with socialism, but we can take a page out of an example of something that works, if it works.  And here's something that has worked for North Dakota. 

It's a state owned operation, formed to address problems that farmers were experiencing, but it doesn't receive a subsidy from the state and its self supporting.   

This is the same model used by the other Dakota, South Dakota, for South Dakota Cement, an operation so successful that it has expanded even recently and markets its product in every state bordering South Dakota.  It even had a plant, at one time, here in Casper. 

Now, I'm not suggesting that we need state run or owned industries everywhere.  But perhaps we can take an example where there isn't a private industry.  Critics would say, and they should be listened to, that if a private industry isn't operating it's for a good reason. But, we also have to admit that there are a fair number of industries that get their start from some sort of government support.  Indeed, the entire transcontinental railroad was such an example, getting state support in the form of massive land grants, which is essentially the same as a massive infusion of capital.  There's no reason to pretend otherwise.

So, where we don't have a local industry, perhaps we should consider if the state should help. The state's already helping the coal and petroleum industries via various studies at the University of Wyoming, including clean coal.  The very day I wrote this part of this entry, Governor Mead was appearing on the front page of the Tribune at a state funded facility studying clean coal.  And let's not forget the pile of administrative entities that help business one way or another, from the Farmers Home Administration to the Small Business Administration.

So, suing the North and South Dakota models, could the state infest in the infrastructure for milling, packing and wool processing?  Perhaps it could. And, after an initial start up, perhaps it could require those industries to run on a self-sufficient basis.

Now, granted, this is a species of socialism, albeit of an odd type that differs from the classic economy destroying the government owns everything variety.  The concept would only be, on sort of  Distributist basis, to form those entities aiding major Wyoming industries where we aren't able to finish the product ourselves on an reasonably economic level.  We can't, for example, create refineries and have them compete.  Nor power plants. But packing plants are another matter, and mills are a demonstrated different matter.  This wouldn't bring in an economic miracle by any means, but it would allow us to further make use of the resources that we do have, right here. And there would be a market for the product, including a small market right here, in that the state is already in the lunch business for kids up to age 19.  Moreover, tags like "Wyoming beef" do have a local price and maybe even a regional one that could be useful for a product grown and finished here, and that is already the case.

This would be a massively expensive undertaking.

I'll be coming back to them again.

Anyhow, it would be possible, but it won't occur, for the state to play a direct role here by building one or two refineries in the state, perhaps one in the Pinedale region and another around Douglas.

But this won't happen.

It would be massively expensive, to be sure.  And that would draw the ire of people like Representative Chuck Gray who would be horrified by the expense.

And expensive it would indeed be.

But, frankly, so are the "clean coal" efforts, and we seem comfortable enough with that.

And such an effort, if on the South Dakota Cement or Dakota Mills model, could probably at least break even, and would likely have a ripple effect on the economy.  It would, bare minimum, employ hundreds and creates hundreds of more jobs, using a raw product that we produce here locally and then send out of the state for processing.

Which is not too say that this has a ghost of a chance of occurring, or that its uniformly a good idea.

It certainly would be problematic for a host of reasons. For one thing, it would put the state into an industry that is associated with massively expensive environmental problems.  Indeed, one of those Casper refineries, the one that basically built the town, was subject to just such a clean up.  It's now the Three Crowns Golf Course. No way the state would want to be tied up in something like that.

For another, it would put the state directly into competition with private industry, which is problematic for obvious reasons (although apparently not if you are North or South Dakota).  

And it's politically unrealistic in this industry.

Which brings us to something less unrealistic, which is not to say realistic.  The state could encourage the building of such infrastructure locally. . . with the only really realistic way to do that through taxation.

Now, any time taxation is mentioned in Wyoming people have a fit. Heck, we barely passed the coal severance tax that funded our schools for years.  But we could do that.  One purpose of taxation is to direct spending and development, in addition to raising revenue.

This would be hard to do, but you could put in place a Raw Products Tax to attempt to encourage local infrastructure in this are. But you'd have to be careful doing it so as to not end up deterring production, and that would be tricky.

And that's not going to happen either.

So, what's the point?

Well, just this.  In the major healthy extractive industry, oil and gas production, there's actually next to nothing that the Governor or our Congressional representation can do to impact it positively or negatively.  It's all pricing.  And that price isn't determined here.  Habits of consumption aren't either.

So the only opportunity is in the end product end.

But nobody is talking about that, and nobody is going to either.

So this gets back to this.  If this is an area of our economy that we largely can't do anything to influence, other than those things which have already been done, why do we keep kicking it around as though there's a political issue here to be discussed.  The economics of the extractive industries are economic realities that can only be influenced around the margins.  We can impact those margins to greater or lesser degrees through policies or direct actions, but big actions in this area would require big, and radical, efforts that we're not about to undertake.

So, dare we say, perhaps the topic of Wyoming's economic situation ought to just flat out skip over this area.

Addendum

Some times this morning, well after I posted this, I received an email from candidate Mark Gordon that sort of freakishly relates to the topics here.  It reads:

Wyoming’s energy industry has long been the backbone of our economy and has served our state, people, communities, businesses, and schools tremendously well. As the industry and markets change, so must our approach to protecting and promoting our natural resources!My new Power WYO Forward platform will foster and grow our state’s energy sector.The 6-point plan is simple:

• Building Infrastructure to Export Wyoming Resources - I’ll pursue opportunities with other sovereign funds, including the Alaska Permanent Fund and the Alberta Investment Management Corporation, to explore building infrastructure to export Wyoming’s high-quality minerals. Investing in private-sector endeavors or supporting them with bonds to do just that is a win-win.

• Driving Advanced Energy Technologies - I’ll work to position Wyoming as the leader in advanced energy technologies including Carbon Capture and Storage (CCS), Enhanced Oil Recovery (EOR) and new carbon-to-product markets. We’re seeing promising research come out every day that shows the potential for turning carbon into marketable products we can make money off of – like petrochemicals, asphalt and plastics.

• Streamlining Regulations - I’ll drive a shift on the state and federal level towards regulations that reward people for doing a better job – be it through expedited permitting, faster response times, or other incentives. The free market can, and will, address many of the environmental concerns that come with energy production, but we have to give them reasonable room to do so.  

• Localizing Decision Making – Working with Federal Agencies - Wyoming people, Wyoming leaders need to be empowered to make decisions. It is critical for the next Governor to leverage action with a strong relationship with the BLM and other federal agencies to expedite processes and keep projects moving.

• Streamlining & Aligning State Energy Resources - Streamlining and better aligning Wyoming’s energy agencies and resources will not only better serve taxpayers, but business – energy producers, innovators and those adding value to the chain. I’m committed to ensuring the state does more with less to direct people and companies to the resources Wyoming already has in place.

• All of the Above Energy Policy – There is Room for It All - Be it oil, gas, coal, uranium or wind, when it comes to natural resources, Wyoming has it all. As a lifelong conservative, I strongly believe that the market should pick winners and losers when it comes to energy sources – not government.

A person can take this for what it is worth, of course.  The thing I think is interesting about it is that it obviously advocates for the use of state funds in regards to the oil industry.  An irony of this is that the use of state money for private enterprise is generally not supposed to be a Republican thing, but apparently here it is.  Another factor to be considered, or that perhaps should be, is that some of the targets for state money under this type of program would seem to be areas that, if they are viable, the largest sector of our economy would invest in itself.

Other things go back o regulations although not in a way that's stated radically.

Anyhow, I'm not opining on the outline above in any fashion, just keeping this newly posted post, somewhat contemporary with the campaign.

Today In Wyoming's History: December 29, 1916. Stock Raising Homestead Act of 1916 becomes law.

Today In Wyoming's History: December 29:

 

Abandoned post Wold War One Stock Raising Homestead Act homestead.

1916  The Stock Raising Homestead Act of 1916 becomes law.  It  allowed for 640 acres for ranching purposes, but severed the surface ownership from the mineral ownership, which remained in the hands of the United States.

The Stock Raising Homestead Act of 1916 recognized the reality of  Western homesteading which was that smaller parcels of property were not sufficient for Western agricultural conditions.  It was not the only  such homestead act, however, and other acts likewise provided larger  parcels than the original act, whose anniversary is rapidly coming up.   The act also recognized that homesteading not only remained popular, but the 1916 act came in the decade that would see the greatest number of  homesteads filed nationally.

Perhaps most significant, in some ways, was that the 1916 act also  recognized the split estate, which showed that the United States was  interested in being the mineral interest owner henceforth, a change from prior policies.  1916 was also a boom year in oil and gas production,  due to World War One, and the US was effectively keeping an interest in  that production.  The split estate remains a major feature of western  mineral law today.

The Big Picture. Inspecting the ore docks.

Members of American Iron and Steel Institute inspecting the ore docks, Cleveland, Oct. 23, 1915

Proposed land swap comes under fire for restricting public access

From the Douglas Budget:

Proposed land swap comes under fire for restricting public access: A proposed land exchange between the Wyoming Board of Land Commissioners and   Bonander Ranches, LLC is set to pose a significant loss of public land access for Wyoming sportsmen and hunters, according to a growing number who oppose the swap.

Doggone, enough is enough! 

And I've had enough of the State Land Board's actions on these things. At least the last one around here appeared to be quite inequitable and by and large these things just don't work out of the state, in a way that we appreciate.

And here's why:

If acquired, Wyoming’s hunters and recreationists face losing access to more than 4,000 acres of public land located in Albany County, according to Jeff Muratore, Casper board member of the Wyoming Chapter of Back Country Hunters & Anglers (BHA).

So what would the state get?

According to the detailed analysis report posted on the Office of State Lands and Investments website, Rick Bonander, owner of Windy Peaks Ranch, has proposed to trade 295 acres of Moskee lands within the Black Hills Forest, located in Crook County, for 1,040.67 acres of land located in the Laramie Peak area of Albany County, more specifically within elk hunt area 7 south of Douglas.

295 acres for 1,040.67.  Of course.

Now, the Black Hills land is worth a lot more, I'm sure, than the Albany County land. Well, most of us do not care. We do not care one whit.  And here's the reason why:

Although the state is in the process of trying to consolidate land and the Black Hills land is good for mineral processes, valued at more than three times as much as the land around Laramie Peak, it is a  “lopsided trade” in Mutatore’s opinion because it is being evaluated on a scale of “value to value” rather than “acre to acre for elk hunting.”

He argued that the problem is the 295 acres of Bonander land does not offer access to the part of elk area #7 that will be affected, therefore, the only gain for the public will be having access to the 295 acres of Moskee land in Crook County.

“It’s not a quality exchange because (the Moskee land is) mainly home to white tail deer and wild turkey,” Muratore said. “Hunting and fishing are a big part of Wyoming, especially when it comes to tourism and recreation, which brings a lot of money into the state. The number one reason people don’t hunt or fish . . . is because of access to land.”

In other words, those of us who are average folks here, are a lot more agrarian than the State. We don't like these trades.

Assistant Director for the Office of State Lands and Investments Jason Crowder said Bonander had applied for several types of land transfers. This exchange was chosen because it met the trust plan management objectives, thus it could move forward with the analysis and appraisal of the proposed land trade. In order of importance, the objectives are revenue and value to the state; efficiency to manage the property; and effect on community need, as well as benefit to public recreation. 

The Office of State Lands and Investments is “pursuing” this exchange “mainly because it’s a benefit to the trust land objective” and  “because of the value potential of lands in the Moskee area to appreciate,” Crowder said.

M'eh.

This provides, I'd note, one good reason why the State should never be allowed to get its hands on the Federal domain.  We'd see the same thing all over. 

Here's the State Link on this. And the state's resolution (its not a done deal yet, however) to support it.

Now, I'm not saying that Rick Bonander, the land owner, is a bad guy.  Not at all.  Indeed, he's done some great things for Casper.

But I am saying that this should be opposed. And I'm about at the point where any proposed land swap coming out of the state ought to be opposed, quite frankly.  And its not too late to oppose this one.

Mixed Economic News

Over the weekend, the Tribune reported that the tourism industry in the state, while up, wasn't making up for lost oilfield income to the state.

This is no surprise.  Most tourism related jobs don't pay particularly well.  Tourism, of course, does spill over into retail, but there's a long ways to go before the loss in employment in the extractive industries is made up by tourism. Not that there isn't an avenue to explore maximizing that, which I don't think we've done so far.  Indeed, I think there's a lot that remains to be done in that field.

And perhaps it should be. The State is reporting that the economic downturn is slowing, or flattening. That doesn't mean that an oilfield and mining rebound is in the works, although its certain that some will instantly interpret it that way.  No, rather, what that means is that we've potentially hit bottom and, at the same time, the price of oil seems to be stabilizing. That's far from the rapid recovery people were wishing for, but those wishes were never realistic to start with.

Added to this, Governor Mead has reported that the state will not be making more layoffs. That's certainly good news for the state as the role of the State government in keeping employment rolling is an under reported, maybe even missed, story.  A warning, however, went out to the legislature, which has strong anti Keynesian tendencies, not to cut more as that would reverse this.

So perhaps some stability is entering the picture for awhile.  And if that's the case, it might be a good thing to do some planning around this economy, rather than a boom one.

Nuclear implosion?

Local uranium producer UR Energy announced yesterday it's laying off twelve.

So that's twelve jobs, statewide, following the fifty eight laid off the day prior the hospital. 

Not good, and part of the perfect economic storm the region is enduring.  It's the early 1980s all over again.

And, I'd note, houses are for sale absolutely everywhere.  There hasn't been much news about it, but that's the case.

Interesting, the price of oil is back up, and has been for a few weeks. It was hovering around $50.00 for some time and now its above it. If that keeps up, and nobody knows really if it will, that will have the impact of reviving some drilling.  The price climb is the result of a variety of factors, some of which may be temporary, or may not be, and things haven't picked up much yet, but apparently some oil companies are pondering operations a bit.

Mixed messages.

Just when all the local economic news is bad, we get this from the Tribune:

The Sinclair Refinery in Casper is undergoing one of its most significant overhauls since it opened in 1923, and hiring people by the hundreds in the process.

Wow.

“We believe in operating the refinery in Casper long-term,” Ruble said. “With the crude units, and boilers, electrical, all that stuff - theoretically we should be good for 100 years.”

Wow again. 

On the other hand, Alpha has laid off 37 miners and natural gas driller QEP reported a $863 million loss on Wednesday.

And now Uranium

In the just can't catch a break department, Cameco, a uranium producer, announced it was laying off 85 employees in Wyoming and Nebraska due to depressed uranium prices.  Prices fell in 2011 due to the Fukushima Daiichi incident in which it was damaged due to a 9.0 scale earthquake in Japan.

Stuff like this shows the weird things that nuclear power, which is incredibly safe, has to contend with.  There aren't any forms of electrical power generation that do not resort in injuries and deaths.  Not to pick on coal, but it's certainly the case that there are a lot more coal mining and coal power plant injuries in a year than there are such incidents from nuclear power plants and Uranium mining.

And uranium offers a means of generating power that's actually really green compared to generating methods that rely on fossil fuels. 

No matter, the weird sort of view that people have of such things has condemned nuclear generation to a seemingly increasingly marginal role.  Just like hydroelectric power, it addresses most of the complaint that people have with other forms of electrical generation, but the opponents of nuclear power can't see past the radioactive glow that haunted the imagination since the Cold War.

So, while it has nothing at all to do with what's plaguing coal, a price decline, like for petroleum oil, is causing layoffs in an industry that once showed great promise in the 1960 and 70s for Wyoming.

Blog Mirror: Casper Journal; What do you do when those good mining jobs go away?

The journal has run an interesting column on the now nearly forgotten plight of Fremont County in the 1980s.  One of Bill Sniffin's articles, which are always good, it recalls a Lander Wyoming that was a mining town, now something nearly forgotten:

MY WYOMING

What do you do when those good mining jobs go away?

by Bill Sniffin

It is a recession when you lose your job. It is a depression when I lose mine. – Old saying.
With the loss of more than 5,000 energy jobs, it should be interesting to readers to read about what happened during the last Wyoming bust at the most mining-oriented town in the state. Here is that story:

It's well worth reading.

I'd guess a lot of current Wyomingites, particularly those born since 1990, would be shocked to learn that Lander had been a mining town.  Some time ago I passed by the old Taconite mine and meant to photograph it, but I was in a hurry and didn't.  I wish I had now.  At any rate, Sniffin is quite correct.  Lander was a mining town.

Indeed, Lander and Hudson were union towns and heavily Democratic.  To run for office there you practically had to be a Democrat.  Some of those old Democrats are still around, and still active in politics, but they are Republicans now.  Indeed, in the same race in which Governor Mead took his first nomination a serious contender for that nomination was a really well respected Republican Legislator, who had been a long time Democratic Legislator prior to switching parties.  The big switches that took place, and the fact that Fremont County today has some of the state's most conservative Republican political figures, says a lot about the fate of the Wyoming Democrats over the years.

And the current nature of Lander does as well.  If you went into the town today you'd be hard pressed to realizes that it had every been a mining town.

As an aside, I continue to be impressed by the columnists in the Casper Journal.  They're good.  Indeed, even though the Journal and the Tribune have common ownership, the Journal, a weekly paper, has better columnist as a rule.  Not always, the Tribune has some good ones, but it also has some that I really wonder why they run.  Bill Sniffin, of the journal,  never fails to publish an interesting article, and he's not the only one in the Journal we can say that about.  The Tribune does run some good national columnists, and some I could leave, but that's common for folks like me who read national columnists.  Some you like, and some you don't.  On local columnists their Mary Kettl almost always runs an interesting column as does Mike Kuzara, but in contrast, while Mary Billiter's have much improved, I still can't get into them. And likewise I'm consistently bored and disappointed by Edith Cook's column, which I'd not run if I were the editor.

And now Peabody

In the 1970s John Prine released a song that continued to irritate the giant Peabody Coal Company ever after.  It's chorus lamented the disappearance of a town due to mining, laying that at the feet of Peabody in the chorus:

And daddy won't you take me back to Muhlenberg County
Down by the Green River where Paradise lay
Well, I'm sorry my son, but you're too late in asking
Mister Peabody's coal train has hauled it away.

Well, now it's Peabody that seems to be disappearing, at least in terms of being the giant it once was.  Yesterday it took Chapter 11 (reorganization) bankruptcy.

Peabody is the largest coal producer in the world.  And yet its fortunes have fallen so far and so quickly that over just a few years its value has been estimated to have declined from billions to millions, and now its in bankruptcy. It's coal trains, or rather those of railroads serving Wyoming, heavily laden with Campbell County coal were a common site in parts of Wyoming, but now I'm told that you can find idled locomotives reflecting the decline and a once proposed rail line has now been dropped.  Signs that are hard to ignore.

Today In Wyoming's History: April 1

Today In Wyoming's History: April 1:

2016  Governor Mead announced the formation of centers to assist displaced mineral industry workers light of the layoffs by Arch Coal and Peabody Coal Company, the two largest coal producers in the United States.  The layoffs came on top of a nearly continual stream of smaller energy sector layoffs over the past several months.  The formation of centers to assist the displaced workers is extraordinary, bringing to mind no other recent examples of anything similar.

Coal layoffs and Northeast Wyoming

Peabody Coal Company, the world's largest coal producer, and Arch Coal have announced layoffs in the Gillette area which amount to a combined 450 jobs lost.  And the losses won't stop there.  With that many jobs lost the local economy in Campbell County will be undoubtedly impacted.  Additionally, a loss of that many jobs clearly indicates big changes in operations at the mines themselves, and the energy infrastructure in Campbell County, which is what the economy of the county is based on, will be hit.  It's unlikely, therefore that the job losses will stop there.

This is a rim news for the area economy.  And for the state.  School funding is principally based on the coal severance tax.  Without ongoing major coal production, the schools are in big trouble.

Moreover, this may reflect such a major shift in the economics of coal that there may never be a return to its former position in the economy, either nationally or locally.  Wyomingites have been quick, in some quarters, to blame regulation and the current Administration for coal's demise.  One of the interviewed miners blamed the event on regulation and expressed the thought that things wold turn around under a new Presidential administration.  Our Superintendent of Public Instruction mentioned budget problems, in a recent op-ed, as being due to "the war on coal".  But people shouldn't fool themselves.  This likely represents a shift so deep in the economics and culture of coal that current events show an existential change much deeper than merely a current White House discontent with it.  

Indeed, even twenty years ago I was told by an energy company executive that "coal is dead".  I was surprised by his view at the time, but he was quite definite in his views.  But he was expressing an energy sector long term view, at that time, that coal wouldn't survive a switch to other forms of power generation.  Ironically natural gas, of which North America has a vast abundance, has really eaten into the coal market and that's not going to change.  Power plants take years to build and years to permit.  Coal fired plants are being built, they're being retired.  This not only won't change overnight, it won't change at all.  The coal industry itself pinned its hopes on the Chinese market, which uses a lot of coal, but China also has a lot of coal.  The Chinese economy is in the doldrums right now, and that will likely change, but when it does the question is whether China will enter an economic period mirroring Japan's long endured slow economy, or change to a more growth oriented but volatile economy like North America's and Europe's.  And a bigger question is whether China, which is under pressure from much of the rest of the world on emissions, will itself move away from coal.  It hasn't so far, but there's no guaranty that it will not.  Coal, to the extent it retains any popularity (and that's little outside of the coal producing states), is popular only in the US and China.  Indeed, in some areas of the US it is now so unpopular that efforts to ship coal by sea to China were opposed in Pacific maritime states, something that had not been worked out at the time the local coal producers went into this slump.

So chances are high that this is a sea change, not a downturn.  And if it is, it's one that has huge implications for the state.  The state didn't deal with them in the last Legislature, or even really discuss dealing with them. By the next one it will have no choice.

As the grim economic news kept coming in. . . mixed signals

Just yesterday I ran our item featuring news from a couple of energy outfits.  It likely can't be regarded as cheery.

After I published that, I ran into somebody I know who worked in a service company.  A local, in his early 60s, he told me he'd been let go a couple of months ago.  Notably, he's a Wyoming native and he was taking it well, and not even worried really.  Almost 62 years old, he was basically marking time until he could take early retirement, which he now intends to do.  Ironically, at the same show I ran into my wife's old landlord (from before our marriage), a really nice guy, who once worked for one of the refineries.  He's actually gone back to work as a parts runner as he was finding retirement to be boring.

Anyhow, in today's Tribune, which now features a Sunday "energy" section, there's a detailed article noting that prices at the well head are up to $40/bbl and aren't falling. They might be rising a bit.  They're now high enough that a couple of local outfits are contemplating drilling if the price holds.  We might keep seeing some layoffs for awhile, but if the price holds, and it looks like it will, we will probably be returning to an exploration economy in the petroleum industry, but not a superheated one. This might be a good thing overall.  It won't happen right away, but I wouldn't be surprised to see an increase in rigs by late 2016.

Today's Tribune also had a column written by the new state Superintendent of Public Instruction. She was in the news taking a little heat over eliminating a position in her department recently, but was featured today regarding her term in office so far.  In her column she summarizes her time in office so far noting, in one paragraph, the challenges that declining revenue are putting on the education budget.  She noted the trouble in the petroleum and coal industries specifically.

I note that here not only because it's real, but because she termed the coal problems as "the war on coal.".  That's a common perception here but it is a political one as well.

On what she noted, I'm surprised she mentioned petroleum as petroleum only directly impacts the education budget.  It's coal that really does.  When this system was set up in the 1970s coal was doing really well and there was no reason to add petroleum to the mix.  As hard up as coal has been recently, however, we might really want to think about adding petroleum severance taxes to education funding.  Petroleum is doing poorly, but it will come back at at least some level.  Indeed the articles in the tribune noted that US production will fall next year which will cause the price to at least stabilize.  Natural gas, part of the petroleum story, is likely to do increasingly better in the future as power generation is switching over to it nationwide.

Which brings me back to "the war on coal".  It's been popular here to conceive of the troubles coal is having as part of a dedicated effort against it.  I suspect that was thrown out as a little political kibble to the public, but she may perceive it in that fashion. Quite a few people in the state do.  But such thoughts should be realistic.  It is true that coal has lost favor in the eyes of much of the public.  But, no matter what we here in this state may think of coal, we need to be realistic. That view is going to increase, not decrease.  Indeed, while the state is funding "clean coal" efforts, the trend evidence is that production curve on coal may have shifted forever.  The industry itself was banking on Chinese importation of coal, not American consumption, and that gamble proved to be a bad one.  The conversion to natural gas for power generation appears to be irreversible and in the future that's what fossil fuel burning plants will burn.  Indeed, no new coal burning ones are being built in North America just as the construction of oil burning power plants, which used to also exist, is now a thing of the past.  So, even while there are those who are dedicated opponents of coal out there, it's really economics and long term trends that are imperiling coal.  The industry is well aware of that, I'm quite sure.  Coal mining is not about to disappear overnight, but those who are looking to the 1970 to 2010 era in coal to reappear are going to have to face the hard facts that certain fundamental things have changed in the industry, and fundamental changes need always to be adapted to.

Marathon, Peabody and the airlines

This past week the state received the bad news that Marathon Oil Company, formerly Ohio Oil Company, which was once headquartered in Casper Wyoming and then later in Cody Wyoming, and which has had a presence in the state since 1914, is attempting to sell its Wyoming assets.  At least psychologically, and indeed in reality, it's quite a blow to the state.

 The Ohio Oil Company Building in Casper.

The Ohio Oil Company built a major art deco building that it used as its headquarters from 1925 until 1974, when it built a new headquarters in Cody.  The building remains there today as a significant downtown building, with the old Marathon sign off so that the Ohio Oil Company name cast in cement above the main door is visible  The building is one of four buildings, including the ConRoy Building where I work, that were built by oil companies starting during World War One and through the 1920s and which were still standing when I started practicing law in 1990.  The other two were the Pan American Building, built by Pan American Petroleum (founded in 1916 and merged into Standard Oil in 1954) and the Sinclair Building.  The Sinclair building, which was a neat two story building that had garden level basement windows, was torn down in the 1990s, which I thought was a shame, as it was an attractive building with Greek architectural elements.  It apparently was a building that, because of its comparatively low stature, people didn't photograph much as I can't find a photo of it anywhere, and I never took one.  It's the Townsend Justice Center parking lot now.  Oh well.

 Now the Townsend Justice Center, once the Townsend Hotel, when this photograph was taken I was standing pretty much where the Sinclair Building had once been.  Given the nature of the residents of the Townsend in its long declining years, its conversion into a courthouse is either strangely ironic or oddly appropriate.

Anyhow, Marathon's Cody building was also a very nice one, although I remember there being some discontent in 1974 when they moved. That I can remember that at all, as I was eleven years old at the time, must mean that there was some real discontent about it.  Having said that, my moving to Cody they were bucking a trend and moving closer to their production.  By the 2000s, however, it had another office building in Houston Texas and some years ago it closed its Cody office and moved its headquarters operations solely to Houston.  It's sold off some of its assets in Wyoming slowly since the 2000s but it's now looking to completely divest itself of its Wyoming properties, presuming that it can sell them for a reasonable price.  It's not conducting a fire sale.

This reflects in another fashion a really long term trend that's occurred in the oil patch. At one time, there were a lot of oil company headquarters.  Indeed, there were a lot of them in Casper, which at one time had newspaper that claimed it was the "Oil Capitol of the World".  Marathon is unusual in that it moved out of Casper to smaller Cody, which was closer to its assets, but the loss of regional oil companies is pretty pronounced, if not actually complete.  Many moved to Denver starting in the 1960s.  During the bust of the 1970s those that hadn't moved tended to, and many of the Denver based companies moved to Houston.

 

The Consolidated Royalty Building, built in 1917 as the Oil Exchange Building, and which remains in use as a downtown office building.

Now Houston, followed by Tulsa, is the undoubted oil headquarters for the US.  There are still headquarters in Denver, but not as many as there once was.  Notably on that Denver has been booming during this oil bust, unlike the 1970s when it suffered a great deal just like Casper.  There have been layoffs in Denver, but Denver's economy has changed so much it just isn't suffering the way that it did in the 1970s.  Indeed, while individual and individual companies have suffered, the city itself has a robust economy.  Not so much the case for Wyoming.

Marathon's departure is sad for Wyoming.  A lot of Wyomingites who have been here for a long time have a connection with Marathon in one way or another.  One of my cousins worked for Marathon back in the 1980s and I once defended Marathon in a personal injury action.  Even with its headquarters in Houston it seemed like a Wyoming company to many of us.

 Wyoming Oil World, June 15, 1918.  This issue mentions a couple of items that have figured significantly in the news here lately. The Salt Creek field mentioned here is still in production, but it recently sold.  The Ohio Oil Company mentioned in connection with Salt Creek is Marathon, which ceased being an operator in this field long ago.

Peabody, the giant coal company, announced this past week that it will be missing payments to some of its creditors.  It's fighting off going into bankruptcy and that isn't good news.  I know a lot less about Peabody in Wyoming, and while the Peabody Coal Company hates the song, I can't hear the name without thinking of John Prine's song Paradise.  Peabody apparently was counting on Chinese coal imports to keep it afloat and now that the Chinese economy has been in trouble, that isn't working out. Added tot that, for the first time ever, more electricity will be generated in the United States using natural gas as a fuel than coal.

Following these two stories, two others came on the same topic.  A local energy industry related entity announced that it was laying off 50 of its employees.  Fifty men and women isn't enough to cause a big impact in the local economy, but it follows this occurring in a lot of other local businesses, some of which hit the news, and others which did not.  On the same day the local paper reported that Natrona County's unemployment rate is now 7.2%, quite a bit higher than the 5% average for the state, and in second position to energy  heavy Fremont County which is at 8.1%.  Keep in mind, as I pointed out the other day, that 7% reflects the local unemployment rate but not the local exodus rate, so 7% is more like 8%, or perhaps more like 10%, by the time everything is figured into it.

I thought that a sure sign that things are slowing down here is a decrease in air service I thought I was detecting, but in retrospect I think I may have been a bit fooled by a change in the electronic booking programs over the last few weeks and the increased Spring Break travel going on.  I haven't been tracking that, and I sure should have been.

Last year or the year before I did notice when Delta took out the late night flight back to Casper, which I liked.  Next month, we hear, at some point after the big Spring Break rush Delta will be canceling its early morning flight and have a mid morning one only, basically wiping out some travel to Salt Lake for us business travelers.  I had thought that  United Airlines has done the same in regards to its late night flight from Denver to Casper after not being able to book the late night one earlier this week, but it was probably just the case that I booked to late so it didn't give me the option, on my computer, of looking at the flight I couldn't book anyhow, for which I'm grateful.

Over the twenty-six years I've been practicing law my relationship with air travel has been a constantly evolving one.  I really like aircraft and I really hate flying in them.  I know that's odd, but it's quite true.  Anyhow, when I was very first practicing law local air travel was so cheap that chartering aircraft wasn't uncommon for lawyers. We'd charter a flight to Cheyenne or Evanston and convert hours of travel into just a few.  This was cheaper for our clients as we could convert hours of travel down to just a few that way, and everyone came out ahead.  But by the late 1990s that basically died and, while I've experienced a charter flight once within the last five years, that was really exceptional and it only occurred as it converted a three day trip down to one and it involved quite a few people.

 

Commercial airliners at the Natrona County International Airport.

Anyhow, one thing that also was the case that air connections to Denver, via the airlines, were so poor that if a person was going to go to Denver or Salt Lake, in the 1990s, they probably drove or, in the case of Salt Lake, flew in and stayed over.  It wasn't possible to fly in and back the same day.  On odd occasion, I'd drive to Denver and back in a day (which I don't mind doing), but more often than not any trip to Denver, either by car or plane, involved a couple of days.

Then, after oil picked up, the airlines started adding flights.  In Casper there was an early morning flight to Denver and another to Salt Lake, followed by morning flights and then even a mid morning flight.  A person could get back with a late afternoon flight, an early evening flight, or a late evening flight.

I took up taking the early morning flight down to Denver and the late evening one back.  The early morning one was always packed with oilfield workers and businessmen going to Denver.  The late night one always had spare seats.  Generally, if a person completed their work early they could get to the airport and catch the early evening one back.

Well, as noted, sometime last year, or maybe the year before, the late night back from Salt Lake was eliminated. So much for that.

Indeed, as I had to go to Denver, I was counting on the late night flight and was surprised when I went to book my flights, which I did rather late, to learn that I couldn't and it looked like it was gone.  It looked like the second flight of the morning was also gone, but I don't think it is.  I booked them anyway but regretted it when I was in Denver as it really put me in a box and I figured I was going to miss it and would end up staying over, which would have really defeated the entire purpose of my flying.  As it happened, I did get back to the airport with thirty minutes left before my flight was to take off, and it ended up being delayed as a crew member was late getting in due to her flight arriving late, and then the plane took off late anyhow as it was snowing like mad and the plane had to be de-iced. We left over an hour late.  Oh well.

 

Anyhow, the morning flight had a few oilfield people on it on their way to Houston, but I only know that as I know them. The usually assortment of men in their FRs carrying hardhats was not there.  

And now that the early morning flight to Salt Lake will soon be gone, I won't be there either.  I can't make that work out very well. Back to driving.

And back to the 1970s, in some ways.

Or maybe even further back.

This all reminds me, in fact, of a conversation between two oilfield people I heard awhile back coming into Casper. One had lived here awhile and the other was just moving in. The new person asked the old one what the town was like.  The person who had lived here longer replied that Casper basically had two populations; one from here that knew it was going to stay here and another that moved in and would be leaving when the boom ended.  The new employee made some comment about the resident population being unfriendly, to which the employee who had lived here replied "no", that wasn't true, it was just that they knew they were staying, and they knew others would be leaving.  I thought then that this was a pretty perceptive analysis.

Indeed, looking back, now that we're experiencing a crash, and so much of it seems so familiar, I'm surprised how resigned to it I myself am.  I feel like I should be more worried. After all, I have two kids not out of high school yet but who will be soon and who will be looking for jobs after college. But that's quite a ways away.

More than that, however, I know that I've lived through this entire cycle before and my parents had lived through it at least twice, maybe three times.  It's part of the economy here and, I think, it's part of the native culture.  Just like we hear about the generation that grew up in the Great Depression having had it impact their characters and personalities, the fact of living in a boom and bust economy does the same.

And we've always had it.  Wyoming was basically built on an cattle boom, but that collapsed in the late 1880s in a massive way.  That was followed by a revival of the cattle economy, and during that period Casper was founded.  In spite of being in the heart of cattle country, and indeed the town was the disembarkation point for the invaders of the Johnson County War, the town looked to oil from the very day of its founding, a pretty remarkable fact given that in the 1890s oil didn't amount to much.

 July 15, 1891 edition of Casper's first newspaper, when the town had just been founded.  While cattle dominated the local economy, a discovery of gas in an oil well located just outside of town was noted on the headlines, which was fairly typical for the paper at that time.  Asbestos, which would come to be mined in Natrona County, and Iron, which would note, also are noted.  Alcova would become a town, but the hot springs would not be developed.  Today that location is the site of a Depression era dam which serves to create a major reservoir.  Period papers are full of optimistic boosterism.

The oil industry really took off during World War One, for obvious reasons. Agriculture boomed at the same time, for the same reasons.  Casper and other regional cities took off as a result, although Casper had already seen quite a bit of oil development by that time.  And of course, following the war, there was a crash in both industries.

Oil started taking off again not all that long later, during the 1920s, as the national economy rebounded.  Agriculture not so much.  In the 1930s things went the other way as the country entered the Great Depression, but both industries picked up again during World War Two.  Since the Second World War we had at least to bust cycles in the oil industry, not including the current one.  Agriculture's fortunes have worked a bit differently, reflecting changes in the market over time. Agriculture seems to always be there in the background, which is something that perhaps the state should consider when it considers its economy.

Anyhow, we've been here before.  Perhaps we'll be here again.  The regional economy seems long established and for those who are from here, part of what we're used to.