Subsidiarity Economics 2024. The times more or less locally, Part I. And then the day arrived (part two).

Our lifestyle, our wildlife, our land and our water remain critical to our definition of Wyoming and to our economic future.

Dave Freudenthal, former Governor of Wyoming/

 

January 2, 2024

The Energy Information Administration’s Short Term Energy Outlook Report states that combined generation from wind and solar will overtake generation from coal by more than 90 billion kilowatt-hours this year.

US coal production will drop to its lowest amount since the 1960s, with it taking more miners per ton to produce in the 60s than it does now.

Pennsylvania's Flying Fish Brewing Co. filed for Chapter 11 bankruptcy protection.

January 11, 2024

America Got a Raise in 2023

The Pitch: Economic Update for January 11th, 2024

January 17, 2024

From the Trib:

According to a report put out by the Wyoming State Geological Survey this month, the state’s oil production has not yet surpassed its 2019 high, while nationwide oil production has surpassed pre-pandemic levels.

More than 95 million barrels of oil are expected to be produced in Wyoming in 2023, which is about 3 million more barrels than in 2022. The drilling of new oil wells has helped greatly.

In the first half of 2023, a total of 110 newly drilled oil wells were completed, most of them in the Powder River Basin. This is in line with the first half of 2022, when 118 oil wells were completed.

January 22, 2024

Flying Fish Brewing has declared bankruptcy.

January 23, 2024

U.S. oil production has been holding at or near record highs since October, topping the previous peak from 2020, even though the number of active domestic oil drilling rigs is down by nearly 30% from four years ago.

New technology is the reason why there is higher production with fewer rigs.

And also:

The U.S. set a new annual oil production record on December 15, based on data from the Energy Information Administration. Although the official monthly numbers from the EIA won’t be released for a couple of months, we can calculate that a new record has been set based on the following analysis.

Prices at the pump have been declining.

January 25, 2024

In spite of repeated Republican declarations about how bad the economy is doing, the economy grew 4.9% in the third quarter of 2023, for which the latest figures are out.  This grossly exceeds expectations.

This is interesting for a lot of reasons, one of which the "bad economy" is a consistent theme of Republicans in the current election cycle, when in fact this is a classic "good economy".  It's frankly bizarre.

Some of that might reflect, however, an ongoing retention of a return to the 1945-1975 economy by Rust Belt voters, and anxiety over an inevitable decline in the fossil fuel economy in the West.  The post-war economy is of course never returning, and the change in the direction in the energy economy cannot be arrested, although it too is doing well right now.

January 28, 2024

The Administration plans on providing billions for microchip subsidies for US producers to assure production can be made in the US.

It's worth noting that with war looming with China, there's more than one reason to do this.

The Biden Administration has paused all pending export licenses for liquified national gas (LNG) to consider the climate impacts.

February 8, 2024

Getting Wall Street out of our houses

February 10, 2024

US Credit Card debt is at an all-time high.

World's Foremost Authority On Solar Sheep Advising Wyoming $500 Million Solar Farm

Jobs, Jobs, Jobs

February 11, 2024

It is estimated that over 10% of Canadian craft brewers will close this year.

February 13, 2024

The city of Gillette and BWXT have agreed to work together to look at the possibility of having nuclear facilities and operations in Gillette 

February 15, 2024

While this should be no surprise, given what we earlier reported here:

Remington Arms Manufacturing Company's bankruptcy. A Distributist Economic Lesson and a National Tragedy. And Chrysler Too.

Remington, in its new form, will close its facilities in Ilion, New York, in March.

Colorado has filed suit to stop the Kroger Albertson's merger.

February 21, 2024

Japan's Nikkei stock index soared to an all-time high.

Rivian, the electric truck maker, is laying off 10% of its salaried staff.

This will cause piles of cackling from those who are convinced electric vehicles, which have taken off, will never take off.  Rivian was an automotive start-up, something that's really tough to do.  Basically, their business model depended on getting into the saturated truck market before other maker went to electric, a real gamble.

Wyoming Gets a Big Win in Court for Coal 

 

CHEYENNE, Wyo. –Wyoming’s coal industry’s earned a long-awaited legal win today, as three Ninth Circuit judges unanimously sided with Wyoming’s arguments in support of the continuation of the federal coal-leasing program. The decision vacated a lower court order that reinstated Obama-era coal-leasing restrictions and required federal officials to perform duplicative National Environmental Policy Act (NEPA) analysis. 

“This ruling is an unequivocal win for our coal industry and a reminder that the Biden Administration has to follow the law,” Governor Mark Gordon said. “The Department of Interior now has one less excuse to thwart its federal coal leasing responsibilities. I appreciate the Attorney General and her staff for their excellent work on this case.” 

The complicated case spanned seven years and involved conflicting orders issued by former Interior Secretaries, in which Secretary Jewel issued an order to cease federal coal leasing and conduct a Programmatic Environmental Statement on the entire coal leasing program. Before that review was complete, Secretary Zinke rescinded the Jewel Order so coal leasing could resume; lastly Secretary Haaland rescinded the Zinke order. The district court ruled that the Department of the Interior needed to conduct additional NEPA analysis before resuming coal leasing under its existing authorities.  Wyoming argued that the case was moot, because the Zinke order was rescinded by Secretary Haaland.

Litigation costs for Wyoming were covered by the Federal Natural Resource Policy Account as directed by Governor Gordon.   

-END-

March 15, 2024

Nippon Steel proposes to take over U.S. Steel.

March 17, 2024

Tyson, the giant chicken corporation, announced that it's closing a plant in Iowa in June which will result in 1200 people, 15% of the entire town, losing their jobs. Simultaneously, the company is working with an asylum advocate group to hire 2,500 asylum seekers who are cleared to work elsewhere.

Um. . . we've been running a series on our companion blog entitled An Agrarian Manifesto. . . might be worth reading, perhaps particularly these:

A sort of Agrarian Manifesto. What's wrong with the world (and how to fix it). Part 2. Distributism

A sort of Agrarian Manifesto. What's wrong with the world (and how to fix it). Part 5. What would that look like, and why would it fix anything, other than limiting my choices and lightening my wallet? The Distributist Impact

March 21, 2024

Reddit is going public.

March 22, 2024

The Justice Department is suing Apple for Antitrust violations arising from its iPhones.

March 26, 2024

Trader Joe's is raising the price of bananas for the first time in twenty years.

March 27, 2024

Texas based and 7-11 owned USA Gasoline stores have closed in Wyoming.

March 28, 2024

Only the Northern Arapaho Tribe and the city of Cheyenne applied for portions of the $4.6 billion Federal fund to reduce reliance on carbon emissions-heavy energy sources and to become more economically resilient.

Fisker is cutting the prices of its electric Ocean SUV by 39%.

April 1, 2024

Gold hit $2,262.19/oz.

April 8, 2024

The price of oil dropped 1%.

April 11, 2024

The Aerodrome: “It stinks, like bad medicine going down, it’s a h...: So stated a Casper City Councilman about extending an additional $400,000 to SkyWest Delta to anchor the flight to Salt Lake City from Caspe...

April 12, 2024 

Boeing Is the Canary in the Trickle-Down Coal Mines

The Pitch: Economic Update for April 11th, 2024

April 13, 2024

And gold hit a record again.

Last Prior Edition:

Subsidiarity Economics. The times more or less locally, Part XVI. And then the day arrived.

Recent Related Threads:

What's the matter with Wyoming (and Iowa)?

Thursday, January 10, 1924. Soaring oil prices.

Remington Arms Manufacturing Company's bankruptcy. A Distributist Economic Lesson and a National Tragedy. And Chrysler Too.

Wednesday, November 7, 1973. Congress overrides Nixon's veto of the War Powers Act.

 Congress overrode President Nixon's veto of the War Powers Act.

The resolution was a direct byproduct of the Vietnam War, with Congress feeling that it had basically been led into war without a proper chance to vote on troop deployments to the conflict, although it had voted on the murky Gulf of Tonkin Resolution.  The still relatively fresh Korean War was also in mind.

The Constitutionality of the act, which as been questioned, has never been tested by the Supreme Court.  So far, however, Congress and the President have generally complied with it, not wanting to test it, even though early on President's would note that they felt it to be unconstitutional.  This is discussed further with a link here:

November 7, 1973 – Congress Passes the War Powers Act

Nixon addressed the nation on "The Energy Emergency".

It's fair  to ask in a way if the "Energy Crisis" presented a lost opportunity.

Even in 1973, contrary to the way some would like to assert it, there were concerns in the scientific community about climate change.  When the Energy Crisis arose due to the Arab Oil Embargo there was a serious effort to look at alternative energy sources, although nothing like there is today, and it was coupled with a massive effort to increase the production of domestic fossil fuels.  Solar energy was looked at seriously for the first time.  A lot of thought was put into home solar.  Energy saving regulations, in regard to appliances, and fuel efficiency standards were put into place as well.

Had the government gone further, and moved towards home solar in a large-scale way, and undertook efforts then to look towards conversion to non emitting energy sources, we may well have avoided what we're looking at today.

The Cape Krusenstern Archaeological District in Alaska was designated.

About the location, the National Park Service notes:

Cape Krusenstern Archaeological District - Designated November 7, 1973

Cape Krusenstern Archaeological District contains the cultural remains of peoples who have inhabited these beaches for 5,000 or more years. Adjacent to the ridges on unglaciated uplands in the Igichuk Hills are surface deposits that extend the record backward to the time of the end of the Pleistocene. The beach ridges of Cape Krusenstern provide a broad, horizontal stratigraphy which includes virtually all phases of cultural history known in northwest Alaska.

Blog Mirror & Commentary: For Wyo’s untaxed generations, the ‘free ride’ may be over

For Wyo’s untaxed generations, the ‘free ride’ may be over

So declares a headline on WyoFile.

This articles has an interesting item about Wyoming's tax system prior to the severance tax, that being:

In the late 1960s, Wyoming’s economy depended on another industry — agriculture — that was rapidly declining. When Hathaway checked the balance in the state’s general fund and found there was only $80, he knew he had to act before the state went flat broke.

I'd never heard that.  I do recall that at the time people were upset about the severance tax, or at least a lot of legislators were, as there was fear that it would end coal production in Wyoming.  The article notes that:

Wyoming legislators at the time, like future Gov. Ed Herschler and future U.S. Sen. Alan Simpson, initially opposed the governor’s severance tax proposal. But when Hathaway challenged them to figure out an alternative, they admitted they couldn’t, and they passed the tax.

I'll be frank.  I don't know what to do regarding Wyoming's state budgetary woes.  I'll note, however, that so far the state has been unwilling to look at anything much which was based on the hope that things would return to "normal".  Wyomingites are acclimated to looking at taxation this way.  Indeed, we used to proudly hear that Wyoming had "500 years" worth of coal resources, whatever that meant.

What now seems plain is that coal is on a long term systemic slide.  Indeed, it was even at the time we started to first tax it.  It's becoming additionally clear that petroleum may be entering an analogous condition, something we would have regarded as simply impossible only a few years ago.  Petroleum production was increasing on a massive scale a decade or less ago, of course, and that could come back.  But something is changing.  Within the last few years, indeed within the present Administration, the country was proud of having reclaimed its status as an energy exporter for the first time in decades.  Now, however, a Saudi Arabia/Russian price decline, combined with oversupply (which has decreased this year) has made the market highly valuable.  More significantly, however, there's very open talk at the national level of a technological phase out of petroleum as a motor vehicle fuel.  

That, as a technological matter, seemed like an absurd suggestion itself until only recently.  But now electric cars are coming on strong.  Ford is introducing an electric Mustang and has an electric F150 slated for 2022 or 2023.  General Motors is introducing a light electric truck under the Hummer name.  Chrysler has been pretending to hold back, having a sector of the truck market that is slated towards heavy trucks, which electric vehicles have not yet penetrated, but at the same time its introducing an electric Jeep.  If Ford makes headway in the light industrial market with its F150 Chrysler will jump in, it'll have to.

Critics still scoff at the vehicle developments, and there are some real problems there.  The one we hear here is that they don't have the range to be useful for the state's vast distances, but they're starting too.  Indeed, while its never noted, their present range frankly exceeds that of early gasoline engined vehicles, the real difference being, of course, that you could take your fuel with you in the latter case.  But they're developing rapidly. I have a range of 600 miles or so in my diesel 1 ton pickup, which compares with an advertised low 300s with the new Hummer, so the electrics aren't there yet, but they'll soon be.  If nothing else, they're exploring what the market is and will start capturing sections of it soon.

The real irony of electric vehicles, which isn't missed by their critics, is that they're not really all that green in that they're not really necessarily "zero emissions". Indeed, electric vehicle are, if you will, energy vampires in that they suck their energy from something else generating it, as opposed to petroleum fueled vehicles which carry their own power plants.  In the case of electric vehicles, they're only as green as the remote power plant that produced the energy they store in their batteries.

In fairness, that's become greener over the years, which takes us back to the story of coal.  Coal's been heavily supplanted by natural gas, which requires drilling, we'd note.  There should be, therefore, continued drilling for gas in the U.S. and indeed their has to be, as its largely non transported save by pipelines.

The dream, of course, of Green New Dealers is green electrical generation, and that has been coming on in the form of now viable wind and solar.  Indeed, in this area I continue to hear from those who don't want any changes that wind isn't economically viable.  Oh yes it is, and it has been for some time.

What would really push electricity for transportation over the top is nuclear energy.  The fact that greens don't support it shows how unrealistic people could be.  The US could generate 100% of its electrical needs through nuclear and its much safer than coal in real terms.  Indeed, the US could have surplus capacity through nuclear energy even it it required the electrification of the railroads.  Joe Biden spoke, in the recent debate, of having the US switched over to electric vehicles by 2035.  I'm not suggesting it, but a real "New Deal" type program involving nuclear energy could do it in less than less than half that time.

Uranium is mined in Wyoming, or it was, so there would be some hope of regaining a revenue source there, if reason prevailed.  Absent that, we're going to have to start taxing wind and solar, but we can't at a rate that would harm them as new entities. There have been proposals to do that, but once again they're sometimes advanced by people who really simply hope to kill them, which really would achieve what the opponents of Stan Hathaway feared in the late 1960s, driving an industry elsewhere.  Right now we don't know how much money there will come to be in those sources.  It might be quite a bit, and perhaps that will solve our budget woes.

Or maybe it won't.  Indeed, it probably won't.

So what then?

It's interesting that agriculture carried the freight before the extractive industries. And that likely was as it was making more money per capita than it does now.  Some serious examination should be given to reviving that situation while we still have the money to do so.  Long term economic planning doesn't seem to be our forte, however, or we would have picked up the Occidental lands while we could have, which we didn't.  We've noted that here before.

Where we're headed in the country right now with agricultural commodities is really hard to say.  The United States has had a "cheap food" policy since after World War Two and it appears intent on keeping it.  Cheap food is great for everyone, but it's greater for those consuming than those producing and its driven agricultural consolidation and monoculture.  One thing Wyoming could do is to try to boost the mid and downstream aspects of agriculture, which we haven't done much of. That is, we don't have large commercial meat packing here, we don't have wool mills and so on. That may seem like not much, but it could be a lot, if done right.

If we're talking about agriculture and taxes, of course, we're into a new area that I didn't explore before.  And if we're talking ag, what that means is that we're really looking at a mixed tax base, based on taxing production.  Indeed, taxing wind and solar (and severance taxes) is really the same thing, but this would be on a broader basis.

Prior suggestions to tax production of every kind has been really hostilely received, however.  Certainly a proposal to tax services, such as legal services, was hugely opposed some years ago.

About the only things left to tax, however, is land and income.  There's little support for taxing property rates at an increased level, but I do have to wonder what would be the case if it was graduated. An effort like that would be specifically designed to tax the extremely wealthy and I suspect most Wyomingites would welcome that at some level. As far as I know, that's never been suggested so there's no way to know.  People might resent the suggestion as unfair.

That leaves income taxes, which there is no present support to impose.  I suppose it also leaves sales taxes, which there's no support to increase.

None of which addresses the cost of government itself.  With no money, it'll have to shrink, there's no other choice.  And given where we're presently at in this discussion, that seems inevitable.  But how that will be done is yet to be seen.  We will, I think, be seeing it in the very near future.

Which takes us back to the 1960s.  

I was around in the 1960s, to be sure, but I don't recall much about state government and its funding woes.  Shoot, I was seven years old when 1970 arrived, so I wouldn't.

I'd guess that the budget problems persisted into the early 1970s, but again, I don't recall much about that sort of thing.  How much smaller was our government back then?

It's something we should begin to ask.  At the state level, rather than the Federal one, everything has to be paid for. The state passed up on acquiring economic land, which will likely be to our huge regret really rapidly.  We could likely have brought in large sums through it, but now we won't.  And we don't have any immediately clear path out of where we are.  That may mean a return to budgets of the past.

But what does that mean?

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

In October?

The University of Wyoming has, apparently a Sustainability Club.

I have nothing against sustainability, although my views on it are probably a lot more informed by a long sense of history as well as agrarian sensibilities than most people's are.  Be that as it may, I can't help but note the irony of this.

Laramie is cold and October is the start of the cold months.  Maybe that emphasizes a certain type of solarness, if you will, but it's also the time when you begin to appreciate your furnace.  And at 6:00 p.m., the sun is going down.

Additionally, while the Union Pacific depot in Laramie is an eventing location, it's also right next to the railyard.

Union Pacific Depot in Laramie.

Well. . . maybe that does make sense.  Railroads are extremely efficient means of transportation and modern diesel trains are about the most efficient means of long hauls we have, by a long margin.  Indeed, the Burlington Northern a couple of years ago made a push as advertising itself as a "green" means of transporting goods, and it wasn't really wrong.