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Minerals Committee Covers Many Issues

By Charles Ware

The meeting’s content, originally planned for two days, was presented in one day to accommodate a tour. Committee members and guests took a tour the of energy projects in the Campbell County area. The result was a very packed meeting with delays in covering topics and frustrated presenters.

Reports were made by the taxation department, the Aeronautics Commission, the DEQ, the Business Council, the Pipeline Authority, and UW’s coal research project. All agencies had important information to give the Committee regarding the 2011 legislative session. I am selecting two reports for analysis from a liberty perspective because of their relationship to limited government and free enterprise.

The first liberty topic is about changing the Infrastructure and Pipeline Authorities by turning them into state agencies. There is a bill drafted to do this. Committee members (e.g. Senator Bebout and Rep. Dave Zwonitzer) want to keep the Authorities “instruments of the state” rather than have them be formal state agencies. Their reasoning, and the general reasoning, is the “authority” can make decisions more quickly, can raise money by floating bonds, and can react more quickly to the marketplace than a government department. By operating this way, Wyoming has increased its pipeline capacity by 25% over a five year period. The bottom line here is that Wyoming’s increased delivery capacity has made it more competitive in the national market. The increased capacity has shrunk the price differential between Henry Hub (Louisiana) and Opal (Wyoming) from $1.25/mcf to $.50/mcf. This is a major difference in the gas delivery market which increases sales of Wyoming gas.

The liberty position is that the results the two “Authorities” have achieved since they were formed supports keeping them as “instruments of the state.” Since they can move at the speed of business, they can compete in the real world of business. They are small groups of decision makers, they have the authority to raise money, and they can speak for the state in making contracts.

They are not slowed by the internal checks and balances found in a government agency. Some Legislators question whether or not these “Authorities” should have the power to commit the State to financial obligations without the full vetting of the legislative branch. Yet, it is this ability that has produced the 25% growth of capacity in the last five years. It is noted that the two authorities have never sold bonds or raised money. Just having the authority to do so has led to timely decisions backed with financial power to support those decisions.

The second liberty topic is also about limited government and free enterprise. The Business Council has always been a department under the Mineral Committee’s jurisdiction. The Council has done good work, but has the challenge of being perceived as a true business development company since it is a quasi government department. They always question if they should recruit new business to Wyoming, or expand current businesses.

Director, Bob Jensen, pointed out that other states envy Wyoming because it has such close working relationships with local economic development groups, the Governor’s office, the Department of Employment, and the Department of Workforce Services. These close working relationships can happen since the Business Council is a “quasi” government/private sector business. Still the Committee and the Legislature have a concern regarding their results based on the appropriation to run the Council ($914 million) per biennium.

The liberty position is that mixing of state monies in economic development to reduce the risk a business owner would otherwise take does not ensure free enterprise. Further is the fact there is less accountability of success or failure when public money is part of the equation.

The Committee has asked the Council to give them a more detailed report showing the amount of new jobs the Council’s grants have generated as well as the number of business successes created by the grants they have awarded. This information will assist the Committee in making a better judgment as to the value of this quasi government/private sector state economic development group.

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Thursday, 18 January 2018

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