It’s an old joke in Wyoming that the economy is already well diversified: It produces oil, gas, and coal.
Flying over the state affords a view of fracking wells pulling oil out of the ground and coal trains carrying loads of black anthracite to power plants around the country. Nearly a fifth of the state’s workers collect a paycheck, directly or indirectly, from the fossil fuel industry. Wyoming’s treasury derives more than 50% of its revenue from the fossil fuel industry.
But these days, the joke leaves a bitter aftertaste. Amid the worst collapse in fossil fuel demand in a century, production has fallen off a cliff. Oil, gas, and coal production in the state is expected to drop by about 45% this year. Intensifying the pain, the US government recently slashed royalties on oil and gas to close to zero to bail out the industry, depriving the state of more than $240 million through 2021 (pdf; p 12).