- Associated Press - Monday, February 17, 2014

CHEYENNE, Wyo. (AP) - The state budget bill that got its first airing before the full Wyoming Legislature on Monday calls for using state funds to get coal exported overseas and to avert a federal listing of the sage grouse, which would hamper mineral development in the state.

Rep. Steve Harshman, chairman of the House Appropriations Committee, told House members that the proposed budget drafted by the committee and its Senate counterpart recommends spending $500,000 over the coming two years to cover legal expenses if the state has to sue anyone - including possibly other states - to get access to deep water ports in the Northwest.

Wyoming, the nation’s biggest coal producing state, hopes to export coal to Asia, but the state has faced opposition from some in the Northwest who are concerned about dust and noise from coal trains.

Wyoming is casting about for new markets as domestic coal demand has slumped in the face of stiffer federal regulations on emissions from coal-fired power plants.

“There are folks in Asia want to buy our coal, the cleanest coal in the world,” said Harshman, R-Casper. “It’s a matter of getting it to market, but whether actions by our sister states violate international free trade agreements, the general commerce clause of the United States (Constitution), all those things are going to play out.

“We want to make sure that we properly set aside funds and also as a Legislature send a statement: This is very important. We’re going to fight for it,” Harshman said.

Wyoming’s coal production has slipped from more than 430 million tons in 2011 to 385 million tons last year, according to a recent report from the state’s Consensus Revenue Estimating Group.

Wyoming, which relies on coal revenues to fund education programs, didn’t see any successful federal coal lease sales last year. One scheduled sale received no bids, and the U.S. Bureau of Land Management rejected the highest bid it received for another sale, saying it was below market value.

Gov. Matt Mead, a Republican, traveled to South Korea and Taiwan on a trade mission last fall and said when he returned that both countries were eager to buy Wyoming coal to meet rising energy demands.

“Both countries are so interested in Wyoming coal that had I had coal on my person, I think they would have purchased it right then and there,” Mead said. “They want our coal. And they understand what we have to work through in terms of the ports, and the rails.”

Sen. Eli Bebout, chairman of the Senate Appropriations Committee, said Wyoming lawmakers have toured the Northwest and saw organized opposition to Wyoming’s export plans.

“The only way you might be able to resolve some of it is through litigation,” Bebout, R-Riverton, said in an interview. “So we’re setting it up. It’s so important to Wyoming to have access to those markets in the Far East.”

The proposed budget also calls for the state to spend $1.2 million for sage grouse research and protection. Wyoming officials are concerned that a determination by the federal government that the bird deserves protection under the federal Endangered Species Act could crimp energy production.

“As you know, listing sage grouse would be perhaps catastrophic to our minerals,” Harshman said on the House floor. “We want to make sure we’re out doing everything we can to avoid listing of that species.”

Sage grouse populations are down across its historic range in the West. While Wyoming has been working to protect the bird populations in recent years, Bebout noted the state could still find its fortunes tied to the success of its survival elsewhere.

Bebout said the ramifications of listing the sage grouse would for the entire West would be significant.

“It would just be devastating to multiple use, it would be recreation, it would certainly be mineral development, it would be agriculture and leasing, a lot of really tough issues. I really would like to head that off. I don’t want to see that happen. So yeah, it’s a high priority.”

Both houses of the Legislature will continue to consider and amend the $3.3 billion general funds budget proposal this week. The budget will fund state government operations for the two-year period beginning July 1.

Legislative leaders say they expect to appoint a conference committee by Friday that will meet later to resolve differences between the House and Senate versions of the bill.

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