Wyoming’s Energy Industry Faces Major Threats as Trade War With China Intensifies!

Race Day Live  The ongoing trade war sparked by President Donald Trump has the potential to drastically impact Wyoming’s energy industry, a key part of the state’s economy.

Industry experts find it difficult to predict the exact outcomes of these trade tensions, but they agree the effects could be serious.

Trump recently made good on his promises to impose tariffs on imports from several countries, including major trade partners like Canada, Mexico, and China.

These countries have strong ties to Wyoming’s energy sector, meaning any trade disruptions could hit the state hard.

While tariffs on imports and retaliatory duties on U.S. exports are paused for now, industry analysts are watching closely, trying to figure out what might happen once these taxes are enforced.

China has already imposed a 15% tariff on coal and liquefied natural gas (LNG) from the U.S. While coal exports from the U.S. have increased in recent years, much of it is metallurgical coal used in steel production, not the thermal coal that Wyoming typically produces.

U.S. coal exports to China accounted for less than 11 million tons, according to U.S. Energy Information Administration data.

Wyoming itself only exported about 0.5% of its total coal production internationally in 2023.

According to Seth Feaster, an energy data analyst at the Institute for Energy Economics and Financial Analysis, the impact of these tariffs on Wyoming’s coal industry may not be severe.

“Tariffs or trade restrictions imposed on coal by other countries are unlikely to have much of a direct impact on the coal industry in the state,” Feaster explained. However, he added, “Energy markets do not exist in isolation.”

Feaster also pointed out that a tariff on LNG could lead to an oversupply of natural gas in the U.S., causing prices to drop.

While this would benefit consumers who rely on natural gas for heating, it could also reduce tax revenue for Wyoming and discourage new drilling activities.

Additionally, cheap and abundant natural gas would negatively affect Wyoming coal, as electric utilities increasingly prefer the cost-effectiveness of natural gas over coal.

“Electric utilities in the U.S. have continually expanded their ability to switch between coal- and natural gas-burning power plants,” Feaster said.

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“They can easily adjust their operations to use more natural gas and less coal, which saves them money and benefits their customers.”

However, Feaster believes that weather conditions, rather than trade issues, may have a more immediate impact on Wyoming coal. Cold weather tends to increase coal demand, which may help offset the effects of the trade war.

Another major concern for Wyoming’s energy sector is the potential disruption of crude oil imports from Canada.

A significant portion of Canada’s crude oil ends up at U.S. refineries or ports, where it is processed or shipped abroad.

If a trade war reduces the flow of Canadian oil into the U.S., it could create opportunities for U.S. producers to fill the gap. This could also increase domestic production of oil.

While Wyoming is also expected to see a boom in the production of rare-earth minerals — crucial for the tech and renewable energy industries — the short-term effects of trade battles over these commodities are still unclear.

As for TerraPower, the company building the Natrium advanced nuclear reactor near Kemmerer, they have not responded to inquiries about how the trade war may affect their project.

With tariffs threatening key markets, Wyoming’s energy industry faces a period of uncertainty.

Although it’s still unclear how the trade war will unfold, one thing is certain: Wyoming’s energy future could change significantly depending on what happens next.

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