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‘Environmental justice’ rules may hurt Wyoming’s bid for federal support

The Biden administration’s Justice40 Initiative requires that 40% of clean energy grants must benefit disadvantaged and marginalized communities.

Keith Kinsinger of L&H Industrial in Gillette, pictured in 2020, says he feels secure in his machining job despite the downturn in coal, oil and gas. (Dustin Bleizeffer/WyoFile)

CHEYENNE, Wyo. — Academics and economic development officials fear that Biden administration “environmental justice” requirements are hurting Wyoming’s ability to compete for billions of dollars in federal clean energy and infrastructure grants.

The grants are largely intended to help communities that stand to lose the most from the ongoing transition away from fossil fuels. Under definitions of the Justice40 Initiative, however, places like Gillette and Campbell County, might not qualify as communities that are  40% disadvantaged — yet.

“You would think Gillette would show up as a disadvantaged community because of the economic impacts they’ve had due to changes in coal markets,” said Kara Fornstrom, director of the University of Wyoming School of Energy Resources’ Center for Energy Regulation and Policy Analysis. “But they don’t show up because a lot of the screening factors are per-capita income compared to the national average.”

Based on socioeconomics, federal agencies have identified some regions as Justice40-qualifying communities — the Wind River Indian Reservation and Niobrara County, for example. But many towns preparing for a major economic shock due to planned coal plant closures —  Diamondville, Kemmerer, Rock Springs, Glenrock and others — don’t automatically qualify as Justice40 communities today because the plants have not yet closed.

“Our view is federal funds should be flowing to prevent disadvantaged communities — let’s prevent Gillette from becoming a disadvantaged community before they lose all these jobs and lose their economy,” Fornstrom said.

The areas shaded in gray depict regions determined to be socioeconomically disadvantaged, elevating their qualification for some federal clean energy grants. (U.S. Department of Energy)

Rusty Bell serves as director of the Office of Economic Transformation in Campbell County. The former county commissioner said he wrestles with how to comply with Justice40 requirements as he writes grant applications in a highly competitive environment. In one instance, Campbell County was among 98 applicants competing for five $100 million clean energy grants.

“We had really good partners, and we had the $100 million matching [commitment], and we weren’t successful,” Bell said.

Federal officials weren’t clear about whether Justice40 benchmarks were a factor, he said. But he and other economic development leaders around the state are coordinating to collect more granular data to help show that even if some marginalized populations in Wyoming might not meet Justice40 parameters, they will clearly benefit from federal support. 

“It’s just hard to answer those Justice40 questions because, typically, we’re energy communities that are still vibrant and don’t have low wages,” Bell said. “So unless you’re already distraught, you’re already shut down,” from potentially qualifying for the federal funds.

Federal officials are sympathetic to Wyoming’s dilemma, however, Bell said. The Justice40 Initiative is already undergoing some revisions to account for differing regional circumstances, and a federal Wyoming Rapid Response Team was formed to help communities put their best foot forward when applying for competitive federal grants.

“They’re engaged and they understand our issues,” Bell said. “They’re helping us with language when it comes to community benefits.”

Degrees of disadvantage

Wyoming, the top coal-producing state in the nation, and among the top for onshore oil and natural gas, faces a historic economic challenge in the national shift toward clean energy. The U.S. electric power sector — which accounts for almost the entirety of Wyoming’s coal market — is on track to cut coal-based generation in half by 2026 from peak levels in 2011, according to a report by the Institute for Energy Economics and Financial Analysis.

Yet for all its job and revenue losses so far, Wyoming has fared much better than its coal counterparts in places like Appalachia.

Environmental Protection Agency Administrator Michael Regan talks with a reporter Aug. 9, 2023 while visiting the University of Wyoming School of Energy Resources. (Dustin Bleizeffer/WyoFile)

For example, personal income in Campbell County grew by more than 717% from 1970 to 2018 compared to 47% in Boone County, West Virginia, according to federal data compiled by Headwaters Economics. By 2018, per capita income in Campbell County was $53,775 compared to $34,196 in Boone County.

Even today, construction crews can’t build new houses fast enough to meet demand and employers can’t find enough employees to fill jobs in Campbell County, Bell said.

That doesn’t mean there isn’t poverty and marginalized communities, even in places like Gillette. There’s enough wealth and vibrancy that often poverty goes “unseen,” Council of Community Services Executive Director Mikel Scott said.

For its part, the University of Wyoming is working with federal, state, county and tribal leaders to gather a full account of under-served communities, particularly in smaller towns and the Wind River Indian Reservation, Fornstrom said.

Formstrom also pressed U.S. Environmental Protection Agency Administrator Michael Regan on the Justice40 issue when he visited the University of Wyoming School of Energy Resources in August. Regan reassured Formstrom that federal agencies are attuned to differing circumstances on the ground from state to state.

“We have worked with each individual state to come up with a definition that works,” Regan said. “The definition that works for North Carolina — it looks very different than the definition for West Virginia. 

“The catalyst behind these resources,” he continued, “is to make sure that as this country moves forward, and as we make transitions, more infrastructure is utilized, that no community is left behind.”

This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.