(Casper Star Tribune, December 18) – Wyoming could help finance the construction of a coal export dock in the Pacific Northwest, according to the executive director of the Wyoming Infrastructure Authority.
Loyd Drain said he had a “serious” conversation with an unidentified party in the past six months about the possibility of financing a coal port.
His comments come as state lawmakers ready a bill that would boost the WIA’s borrowing authority to $3 billion and allow the agency to work on projects outside Wyoming.
“If our ability to provide the financing for a facility is the catalyst to get the dang thing built, then we’ll do it all day long for the benefit of Wyoming,” Drain said.
He pointed to the Wyoming Pipeline Authority as an example, noting that agency’s promise of public financing ultimately helped spur private investment in the construction of the Ruby Pipeline, which carries natural gas from Wyoming to Oregon. Ultimately, no public financing was used for that project.
The WIA hopes to make a similar move for coal exports, Drain said.
Coal companies mining in the Powder River Basin see docks in the Northwest as potential bridges to Asia’s energy-hungry economies.
Their efforts have been enthusiastically endorsed by Wyoming lawmakers. The state relies heavily on coal revenues to finance its budget.
But their campaign for coal exports has meet considerable opposition in the Northwest, where concerns ranging from local environmental impacts to climate change have stymied the would-be dock builders.
Oregon regulators recently rejected plans for a smaller dock on the Columbia River. Two larger docks in Washington are under review by state regulators there.
The political debate has played out against a deteriorating market, as a glut of coal and slowing growth in China combined to drive international prices lower.
Ambre Energy, the Australian company behind two ports, recently sold all its North American assets to one of the company’s investors, Resource Capital Fund. Ambre said it could not raise the necessary money to finance the project.
The bill under consideration would increase the WIA’s bonding authority from $1 billion to $3 billion and make a statutory correction to allow the agency to work on projects outside Wyoming.
The Legislature expanded the WIA’s mission last year, adding coal exports to a list of responsibilities that already included the promotion of transmission lines and other electricity distribution systems.
But that law did not change language in the statute establishing the WIA, which only gave the agency authority to finance projects at least partially in Wyoming. The new bill would fix that, lawmakers said.
“We didn’t really give them the flexibility to carry out that task that we gave them,” said state Sen. Chris Rofthuss, a Laramie Democrat and member of the Joint Minerals, Business and Economic Development Committee.
State Rep. Tom Lockhart, a Casper Republican and the committee’s chair, said the increased borrowing limit poses little risk to the state.
A bond is not a cost to the state budget. The risk is potential default, but such an outcome is unlikely given the amount of money involved, he said.
“When you get into those type of numbers, you have to make sure there is creditworthiness to pay the bond,” Lockhart said.
He echoed Drain’s comments about the state’s pipeline-building efforts, saying Wyoming could play a similar role in the construction of coal export docks.
The WIA has used its current bonding authority on one occasion, providing $35 million in financing to Basin Electric Power Cooperative for the construction of transmission lines and substations, he said.
Drain said that in addition to the serious conversation about coal exports, he has also held talks on public financing for transmission and advanced fuel technologies.
The agency’s intent is not to become a financial institution but to promote the construction of infrastructure in the state, he said.
The proposal to boost the WIA’s bonding authority to $3 billion has long been considered, Drain said, noting that the WPA has the same borrowing capacity.
