Lex Anteinternet: Before the Oil. And after it? The economies of Wyoming and Alaska

Lex Anteinternet: Before the Oil. And after it? The economies of W...: 

Before the Oil. And after it? The economies of Wyoming and Alaska.

This is a thread that I captioned, in a somewhat different form ("Before the Oil") and then failed to add any text to, after I'd come back from the last vacation I went on, which was to Alaska.  

Fish hook statue, Homer Alaska.

That was several years ago, 2015, which I guess says something about me, and it isn't good.

Anyhow, what I had intended to write on, and still will, was Alaska before aggressive oil exploration in the 1970s.  I never got around to it, but unlike some undeveloped posts here, and indeed unlike some developed ones, I didn't trash the draft as I still intended to come back to it, which I'm not doing. 

But now, I'm going to add in Wyoming as well.

Indeed, even since I started what was sort of a pioneering thread, at the time I resumed it several days ago, this story has continued to develop and now I can't really claim the "you heard it here first" tag that it would have deserved.  An article very similar to this one, in some ways, has already appeared in the Tribune, for instance.  And indeed, not one articles, but now two.

Wyoming stands in a completely unique position in comparison to Alaska in that oil has been a feature of our economy going all the way back to the 1880s.  This isn't the case for Alaska, although oil was discovered in Alaska as early as 1902,but because of the state's high transient population, chances are good that there are plenty of Alaskans at this point who have no memory of a pre oil economy.  Both Wyoming and Alaska can be pretty chauvinistic about out states, but truth be known the transient population is so high that there are more imports than imports in the state at any one time.*

Real commercial exploration of oil started in Alaska in 1957, not earlier, in spite of a least one paper on Alaska's oil trying to track the history of oil exploration back that far.  I reality, prior to 57, oil wasn't much of a thing in Alaska and there are Alaskans just a little older than I am that might have a memory of the pre oil days. No living Wyomingite remembers a Wyoming before oil.

We may be about to find out what that is like.

Indeed, on the day I'm finally putting this up, it's believed that President Biden will enter a second, more permanent, order.

It's a fact of human memory that its largely inaccurate on certain things, while blisteringly accurate on others.  It's odd, but true.  And as part of that, it's almost impossible for people who have become acclimated to one economy to accept its change, let alone its disappearance. There are still people sitting around in Detroit who had worked in the automobile industry in the 1970s who are waiting for it to come back irrespective of the fact that automobile manufacturing went global in general, and went south, in the United States, in particular.  I don't know why Ford, Chrysler and General Motors centered their activities in that far northern state, but they did. They're never going to do that again.

Wyoming and Colorado were the homes, in the late 19th Century and early 20th, of a collection of famous saddle makers.  You could not only order one of their fine saddles in their shops, but also by mail.  There are still saddle makers in Wyoming, and in Colorado, and some very fine ones at that, but not that do the largescale sort of business that the saddle makers of that period did.  At least one of them located in Colorado warned his fellows to get out of the business in the early 20th Century before taking his own life.  He saw the automobile induced change coming, but he couldn't adapt to it himself.

At least Wyoming has been sort of like that.  We've experienced booms and busts repeatedly. Every time we busted, we vowed to broaden our economy, but we've never done it.  In our heart of hearts, we really don't think the oil economy will ever go away.

On this blog there's a very long thread on the history of coal.  I'm not going to repeat what was written out there, as its written out there. But what you'll find is that if you really look into it, coal began to decline as "King Coal" prior to World War One.  That wasn't obvious to common people however.  Indeed, it certainly wouldn't have been obvious to Wyomingites as coal came on strong here in the 1970s, well into the decline, paradoxically making coal's golden age something that's really a feature of my adult life.

Not so much that I obtained employment in the local coal industry, however.  Coal is cyclical like other energy sources and when oil slumped in the 1980s coal followed along, but more slowly. Again the history of my personal connection with it can be read in the other thread.

Petroleum oil and natural gas, which of course are not the same thing, have a more complicated history in regard to the state and the nation.  The US is a massive petroleum producer and always has been.  There's never been a point at which, after petroleum was first produced, that the US hasn't produced a lot of it.  And not just in the West, like we sometimes like to think, but also in regions of the East, Pacific Coast, and the South.  

The perception of an oil shortage, which came on strong in the US following the 1973 Oil Embargo, wasn't due to a lack of supply, but a gigantic demand.  After World War Two, and up until then, the US was the dominant economy of the world in an unprecedented way.  The Second World War left Europe and Asia's economies completely wrecked and they really didn't recover for a couple of decades thereafter.  It wasn't until the 1960s that European economies began to resemble what they had been, and it wasn't until the 1970s that Asian economies really entered the scene.

In that gap, the US economy went wild with expansion. At the same time, we became the free world's guardian or the world's policeman, depending upon your view.  At any rate, we kept producing a lot of oil but we also were consuming huge amounts at the same time.  We crept into being an oil importer without really realizing it and without doing anything to attempt to address it.  Cars that got 12 mpg were no big deal to us as the price of gasoline were pretty consistently low.

The 73 Oil Embargo changed all of that. There was a dual front effort to address the situation.  One was to expand our production of petroleum, and another was to reduce our consumption.

In expansion, if you lived in Wyoming in the 1970s, you knew that was going on. Drilling was going on like crazy.  And that's when the  concept of a Trans Alaska Pipeline came on.

That petroleum existed under Alaska's North Slope had been proven, but there was no way to get it to market. The pipeline was pushed as a way to address that.  It was controversial even at the time, as the Environmental movement already existed, but backed by a nation suffering from high petroleum prices and rampaging inflation, and Alaska's politicians boosting it as a way to open coffers of money to the state, it was amazingly rapidly built.  Even while the controversy went on, it was heralded as a technological achievement of historical proportions. As a kid in grade school at the time I recall it being compared to the Transcontinental Railroad as an achievement.

The expectation that the pipeline would transform Alaska was completely correct.  Oil booms, like booms of any kind, transform a region wherever they occur.  For Alaska, the impact was profound.

Prudhoe Bay, 1971.

Alaska became a petroleum producing state prior to the pipeline.  The first oil discovery was in 1902, so in some ways it's economy mirrors Wyoming's in this respect, but only slightly.  There was a 55 year gap in oil discoveries in Alaska after that, and the industry really took off in 1957.  That's long ago enough, however, and prior to statehood, such that one study notes that employment in Alaska's "traditional" economy, which includes fishing and logging, as well as petroleum extraction, hasn't changed since its 1959 statehood.  

Be that as it may, Alaska's oil fields presented all sorts of challenges that Wyoming's, Colorado's, California's, North Dakota's, Texas', etc., do not, and transportation was one of them.  Oil was produced in Alaska's large North Slope fields prior to the mid 1970s, but it had to be shipped out literally by ship, with that really being a seasonal endeavor. The pipeline changed all that.

This left Wyoming and Alaska in similar positions in the 1970s.  A massive oil boom in states with vast distances (with Alaska's obviously being much more vast) and economies that were in need of cash.  Wyoming had been relying on petroleum production for a large part of its economy going back to at least the 1910s, and World War One greatly expanded that.  Alaska hadn't really relied upon it until the 1960s, but it rapidly acclimated to it.  By the late 1970s both states had economies that depended enormously on petroleum production.  Wyoming had augmented its original prime industry, agriculture, with petroleum, and then coal, up to the point where they largely supplanted agriculture as economic drivers.  Alaska had started off with fishing and logging, which remain, like Wyoming's agriculture, but with petroleum being the main economic driver.

So where are we now?

Now we can hardly imagine a world that works differently.  Do we have to start to?

That's difficult to tell, in terms of the complete story, but at least Wyoming's example would suggest the answer is yes.  Wyoming, unlike Alaska, never relied completely on petroleum, although it relied heavily on it.  It had coal too.  Now that's rapidly passing away and the state is in deep economic trouble.  New petroleum booms have come on since 1990, fueled in part by massive technological advances in petroleum extraction, but they've tended to be natural gas centered, something that has oddly not been noticed outside of the industry. This is actually a good thing for the industry in Wyoming, however, as gas seems to be an up and coming fuel.  It's a bad thing in that the price has been pretty depressed recently, but that may be a temporary thing.

Which leads us to where are now.

That probably should start with the state of the industry.

Which is actually pretty hard to flesh out.

At the time of my writing this, there are four oil rigs that are working in Wyoming.  There are five working in Alaska, half as many as were working last year.  In August 2019  the rig count in Wyoming was 37.  So things are not going great.

There's a lot that went into causing that situation to occur.  One of them was geopolitical.  Saudi Arabia and Russia got into a price war and the prices went down and down. During that time, there was speculation that the Saudis were intentionally depressing the price in order to attack the American industry, which had been hugely successful in the prior decade but which also now relies enormously on horizontal drilling and fracing.  This means U.S. drilling is comparatively expensive.  Saudi production is cheap, but they depressed their prices so low that they weren't making money on it, leading to legitimate questioning about how wise their engaging in a game of oil chicken was.  Whatever their logic, the price of oil has never returned to a break even place for them.  Indeed, all the benchmarks remain below $60.00 bbl today.

Recently there's been some real efforts on the part of the Saudis to get their act together, raise prices, and return to some sort of normalcy in the market.  That briefly boosted prices, although it didn't stick. The resolve is there, however.  If they stick to it, they can manage to dry up the current petroleum surplus and slowly rise out of the current situation. The problem is that they really need to, as prices have fallen so low that petrostates are now no longer able to balance their budgets. That oddly doesn't seem to be a problem with wester nations that never do, but with nothing to fall back on, it is a problem.

Indeed, it's a problem for Wyoming and Alaska, for the same exact reason, except we didn't bring this on ourselves through starting a price war.

That's part of the reason that the price of oil is low, but another has to do with a transition that's occurring away from petroleum.  It was subtle at first, but now electric cars are coming on strong.  And added to that, quite a few younger people are simply eschewing driving.  It's somehow lost its allure.

That means that demand is actually fallen.  And as it fell, technology entered the picture and is increasingly changing the market.

Environmental concerns have been impacting automobile manufacturing since the 1970s, but within the last 20 years it was clear that electric cars would be on the scene in the near future.  In Wyoming, and I'd guess Alaska, there are still a fair number of people who are steadfastly obstinate in their rejection of the concept of electric cars, but the fact of the matter is that the pace of electric car technology is accelerating dramatically.  "They'll never make a pickup that can take you into the sticks" is still heard here, but it isn't true. They will, and soon.  Ford  and General Motors are introducing full sized standard electric 1/2 ton pickups  Chrysler hasn't, but it's holding back to see where things are going.  It will very soon.  Harley Davidson has an electric motorcycle. Chrysler's subsidiary has an electric Jeep.  

Within a decade, just on the current trend line, it's safe to assume that more electric automobiles will be sold than petroleum fueled ones.  With the accelerating pace of technology in the industry, that's all the more certain.  While people will deny it even now, we're in the end stage of the gasoline engine automobile.

And now new technologies are being explored for aircraft as well.  Boeing is going to be introducing aircraft that fly on biofuel.  Airbus is going to be introducing hydrogen fueled aircraft which would be even "greener" than that.  We're not only in the end of the era of fossil fuel ground automobiles, but in the end stage of fossil fueled aircraft as well, although that will take longer.

The only thing left, after that, are railroads, currently the most efficient, and greenest, means of transportation that there is.  The technological evolution there is obvious and has been for decades. The longest railway in the world, the Trans Siberian Railway, is electric.  American railways could be as well, but for the fact that fossil fuels have been so cheap.  

All of this leads, we'd note, to the topic of "green" electricity generation. And its been a big topic.  Ironically, its been something that's boosted the petroleum industry in the past couple of decades as coal has faded.  Environmental concerns on the part of consumers, and the inefficiency of coal in comparison to natural gas, has lead to a shift over to gas, which is cleaner.  It's not as clean, however, as wind and solar, which have really come on in the past couple of decades.

What would really put the bullet in all things fossil fuel would be nuclear power.  Bizarrely, and stupidly, the western world public just can't get around to grasping t hat.  It actually is the energy solution.  Having used nuclear energy first for a field deployed weapon has arguably put us decades behind deploying it for power.

The point of all of this is that Wyoming, and Alaska, the two states most heavily dependent on petroleum production, are frankly facing a pretty uncertain future in regard to them.  Pretty soon, electric cars will be the norm everywhere.  Pretty soon, aircraft will be using alternative fuels.  Pretty soon, maybe. . . . railroads will be electric, again maybe.

It's not that this would mean there's be no need for oil. There still would. Petrochemicals are a really big deal.  But the need would be dramatically reduced.  Where would we then be?

That's pretty hard to tell, actually.

It's hard in part because humans are notoriously inaccurate in predicting the future, and tend to block out things they don't like about what they can in fact predict.

Having said that, one thing that is clear is that "alternative energy" is going to be a big thing.  It already is.  But the number of people it employs is another thing.  One of the ironies about wind and solar is that not only are they greener in power generation, they're low overhead in terms of employees. The real work associated with them is in turnarounds, when infrastructure is replaced. But like turnarounds at refineries, that's not work that goes to locals.  Indeed, in a further irony, it tends, just like petroleum facility turnarounds to go to companies located in Texas and Oklahoma.  Those companies travel all over, and their employees are based somewhere else.

That leaves us with what we can see, which isn't necessarily what will be.  And that is those portions of the economy, or as I'm dealing with two, the economies, that predated the oil in the form it became.  And those were land based industries.  Agriculture, silviculture, and in Alaska's case, commercial fishing.  Those industries have been there the whole time.

But can you build a modern economy, if that's what we currently have, on those?

The evidence would be yes, but it'll require some thinking outside of the box.

We've dealt with this before, but the thing that Wyoming has been poor at it.  We'll pick that back up where we left off with it last time.

 Agriculture

 Oats

Agriculture is the great ignored industry in Wyoming.

This will being the hackles up on some, because agriculture in Wyoming is generally conceived of as ranching, and ranching has some real opponents in the modern U.S., even though in the West, contrary to the anti's views, its darned near environmentally neutral.  In fact, truth be known, it's environmentally positive if objectively views. That's right, that's what I'm saying as that's the truth. An environmentalist, if they're realistic, ought to thank a rancher every time he sees one (and ought to be for nuclear power also, but that's another topic).

 

Laramie Range hayfield.

Agriculture is an economic constant in Wyoming. While there was some economic activity, even national economic activity, if we consider that courier du bois  and trappers were in fact part of an international industry, it's agriculture that really created the state and made it what it was, and is.

Agriculture made its appearance in a recognizable form in Wyoming as early as the 1840s when New Mexican laborers brought up to work on Adobe buildings at Ft. Laramie stayed on and started small vegetable farms on the "Mexican Hills" near there.  This gave them in an income in that the produce was available to sell both to soldiers at Ft. Laramie as well as to travelers on the Oregon Trail, who by that time no doubt were pretty darned ready for something green and fresh.  Unfortunately, while the area remains a farming area, as far as I know there aren't any farms in the area that are descendant from the original ones.

Cattle, of course, is what we think of in terms of Wyoming agriculture, although it was really farming that made its the first appearance and it certainly continues on in a big way.  Crop farming continues on in southeastern Wyoming which has a climate and soil much like Nebraska's, and hence is part of the giant corn and wheat belt that stretches all the way into the Mid West and which is a massive part of the economy in many such states.  It also exists in Fremont County as well, and in Big Horn and Washakie Counties.  Hay crop production exists in many places, as long as there's water to support it.

 

Porta-vet box of a large animal veterinarian.  A common ranch site in some times of the year.

Where there isn't sufficient water, which is most of the state we have cattle and sheep, although now days mostly cattle.  And Wyoming cattle live out on the range.  They're fed in the winter, but on the range.  Really, they're making use of the ground that in earlier eras buffalo made use of and in the same way, save for the fact that buffalo tended to crowd into Cottonwood groves in the winter and destroy them.

It's cattle and sheep that keep Wyoming wild.  This use of the land keeps the land open and natural. When that stops, you get houses and "ranchettes", something that environmentalist should keep in mind.  A strong cattle industry makes for a strong wild Wyoming.

Given this, and that it's so much a part of the background of the state, you'd think that this is an industry the state would seek to support in some ways.  But it doesn't.  Stockmen and other agriculturalist are largely on their own in all sorts of ways.  There is the leased ground, a very misunderstood public asset, but even this is under attack, unfortunately by agriculturalist as well as others.  At any rate, agriculture is an industry which, in spite of the slams against it, just keeps on keeping on by itself under its own steam, ignored by the state and by Wyoming communities.

It should and must be noted that employment in this industry has really changed over the years.  In the early days Wyoming ranches large and small employed a fair number of people directly.  That was due tot he nature of the operations, and even though a very significant amount of the labor on ranches remains the same now as it was in 1890, not nearly as many people are directly employed in the industry as once were.  There are a lot of reasons for this.

 

One reason is that barbed wire changed the nature of ranching and accelerated the change to smaller, in relative terms, family operations.  When that occurred large numbers of year around employees were not needed and to some extent those employees were members of the immediate family.  As this evolution took place family run operations relied on neighbors and friends for additional labor support during those times of the years which, at one time, caused large numbers of seasonal cowhands to be employed.

Another big factor was the 4x4 truck.  Up until World War Two ranches had to rely on cowhands stationed at the edges of their lands for winter feeding in many instances. The truck stopped that, and it reduced the need for labor as well.  Ranchers that once would employ several hands on remote areas of their ranches could now simply drive their with a 4x4 truck.  Such trucks were first available immediately after the war, and it was the war that really brought them on in strength and proved their utility.  So now many ranches, even large ones, employ no individual cowhands at all, although there are still quite a few that do.

 

World War Two era Dodge 4x4 truck.  With very little in the way of change, this model would go into civilian production immediately after World War Two.

The demise of the sheep industry also really played a large role in the number of direct employees.  There are still Sheepmen in Wyoming, but not like they once were. And this is because, in part, due to the fact that that sheep production was in fact one of the rare areas where there was government involvement, as up until the late 1980s the Federal Government supported the price of wool due to the Defense Wool program.  That program came in during the Korean War when the military had to purchase heavy woolen clothing in large quantities and found that there wasn't a sufficient supply of it. The wool program was therefore brought in but it carried on well after it probably should not have.  Even defending the program it has to be admitted that ending it in the late 1980s made sense, keeping in mind that we hadn't fought a cold weather war since 1954 (we would again in the 2000s) and the technology of winter clothing had changed a lot in that 30 year period.

 Sheep in Natrona County, Wyoming, 1940s.  This photo could have been taken at any point in the 20th Century up into the 1990s.

Also related to it, however, is that the United Kingdom joined the European Community which in turn caused the UK to dump the market policies that favored its former Dominions.  During the late Empire stage of the UK the UK had a policy of developing agricultural production in its Dominions but finishing the products in the UK. So Australian, New Zealand and Canadian wool all went to fine British wool mills for a finished product.  When the UK became part of the EC, however, that violated the EC's policies and the British stopped doing that, focusing on local markets instead.  Indeed, the EC has sort of a bizarre semi autarkic economic policy that heavily impacts agriculture in a negative way in some instances and which explains some odd things, such as a constant EU effort at serious beef production, which it really doesn't have an agricultural landmass to support properly.

When that occurred the Australians dumped their wool in the United States and an already ailing American wool industry was really hurt. So we see few sheep now, although they've come back a bit.

The sheep industry supported an infrastructure that was immediate and obvious, which brings us to the next part of this story.  While Wyoming has lost direct employment in agriculture, it's really lost the infrastructure over the years in a major way.

Early on, there was no infrastructure and everything produced here was shipped out for processing in some fashion.  We've almost completely returned to that.  Turning first to wool, when the sheep industry massively contracted all the supporting wool buyers and shearers, an immediate support industry, were hurt.  But its in other areas where the change has been more dramatic in some ways.  Wyoming once had a very large number of stockyards. Every city had them, and they were mostly associated with railroads.  Those are almost all gone, and that's due to the fact that commercial trucking has completely taken over that role from the railroads, although as late as the 1990s the railroads were still attempting to get back into this for sheep.  Perhaps nothing can be done about that and it was inevitable.

Less inevitable, however has been the end of the local meat processing operations on a large scale. There are still some, but they're really small custom houses.  It was this industry that brought my father's family to Wyoming, as we owned a packing plant here in Casper. Today there is no packing plant in Casper, or anywhere in Wyoming for that matter, of that type.  The plant produced not only meat for sale to stores, but other products as well.  Now, you will not find that in Wyoming.  The cattle are all here, but they are shipped out of state for finishing and processing.

 Closed packing plant, Omaha Nebraska.

You'll also not find much in the way of dairy production, although the Starr Valley in western Wyoming hands on in this area, producing cheese on a commercial basis. At one time most larger towns had a creamery that processed milk, and indeed my family had one for a time here in Casper. That meant that there were dairy cows nearby, which there were, and where you have dairy cows, you have to have a large quantity of high quality hay for them, which was also produced locally.

 

Former Jersey Creamery, Casper Wyoming.

Now all of this is gone.  National consolidation of these things is the reason why.  The situation in the meat packing industry is legendary and is the source of steady complaints from both ranchers and consumers.  Indeed, ti's slowly spawned a direct buy movement, which is now pretty common, where families will purchase a cow, i.e., a "beef", for a half beef, for slaughter.

Having said all of this, the direct economic impact of agriculture remains quite large in Wyoming, it's just not very well noted by anyone. Independent truckers, local feeds stores, professional services, and even local manufacturing all rely on it pretty heavily.  Seemingly nobody notices.  Indeed, in some instances, local governments can be a bit hostile to agriculture when some sorts of support facilities are proposed.

Before I depart from this topic, I'm going to note one thing that seems self evident but for some reason is never treated that way.  Silviculture, the raising of trees for harvest, is agriculture. That makes logging part of agriculture.  Indeed in Wyoming, all logging, to the extent any remains, and it isn't much, takes place on land that cattle are normally on.  Logging is an industry that's really been hurt in the US over the last thirty years and this may actually be one area where environmental concerns have hurt agriculture, although ironically here too its something that environmentalist should reconsider.  Growing trees are carbon sinks.  Full grown trees much less so.

 

 Cattle sharing ground with camping fisherman.

And, in the same thread:

So where do we go?

So then, what to make of this?

Well, usually when we go through a crash, we start to talk about diversification.  We also usually start to take about cutting back government spending.  And we're going to have to talk about a new government revenue sources, or having a state government that matches the money we take in.  It's probably time for all of that.

Maybe its' time to talk about building upon what we have, and actually realizing what that is.  And, as we can see from the above, in terms of private industry, that's agriculture, tourism and mineral extraction.  And, like it philosophically or not, we have a lot of government employment in this state and government entities that are pretty darned involved in some sectors of the economy, particularly oil and gas, already.

So, what do we have to build with?  Let's start with mineral extraction.

Mineral extraction?  Perhaps you're thinking "why I thought you were arguing against relying on that?"  No, I'm really not. I'm arguing that we have to be smart and realistic about that.

The boom and bust nature of much of the mineral industry is a feature of it that is pretty fixed, long established by history, and that's all largely beyond our control.  We have to accept that.  But these industries aren't going completely away.  Even coal, which is in real trouble, isn't going completely away and indeed even right now there's an effort by one coal company to start a mine near Sheridan.

The thing we can do, therefore, is to be smart in our planning on these industries.  And that would have to accept that they're going to have rocky periods.

We may also want to be very careful, and we very rarely are, about thinking that when times are good that they're going to go on forever.  There are those who will act that way and they nearly take any suggestion to the contrary as a hostile comment.  Planning for the crash ought to go on during the boom, rather than waiting until it occurs, and that's just smart.

It's also smart to recognize long term trends, none of which are hugely favorable towards the fossil fuel industry.  Recognizing that isn't being hostile, once again, it's just recognizing it.

And perhaps we also ought to at least ponder that, like the oil exporting nations of the Middle East, we really don't do much with the raw product anymore.  We did at one time with petroleum oil, in that we did refine it here, but we no longer do that.  Natural gas, because of its nature, is "refined", or rather processed here, and that will go on.  We ought to consider all of that, however.  We never processed the iron we mined, for example, even though we had all the things necessary to do it (except, perhaps, the large scale shipping necessary for that).

Now, at this point in time, I may have to admit that the ship has sailed on all of these things.  Down to a handful of refineries, I don't see that industry coming back.  There's a reason that super sized refineries are all located on the Gulf Coast.  But if we're not going to process our raw products here, maybe taxing slightly what we export would be a good idea.  Nothing radical, but to add a little bit of a tax in addition to the existing ones for what is departing would not impact the price and might help us out quite a bit in lean times, particularly based upon how the funds were earmarked.  And who knows, maybe that would encourage a little processing here as well.

All of which might do nothing at all, I'll concede.

Okay then, what about agriculture the one we ignore?

Well, here's something I think we can do a fair amount about.

Agriculture in the state has weathered all the storms. Everything we've ever raised or grown here we still do, we just don't do it in the same proportions as some prior eras, but that's not surprising. What we don't do is to process hardly anything here.  We don't pack any of the meat on a large scale.  We don't process any wool into woolens.  We don't mill any flour.  We don't do any of that.

Indeed, the only processing we do, and its a return to something we hadn't done in a long time, is to brew beer and bottle it and (and this is new) to distill grain and bottle that.

Maybe it's time to sit back and have one of those beers and ponder that.

There's a lot we can do here, but in some ways we have to be a bit bold and buck some trends.  There's a large multi-state industry devoted to processing remotely here, and to suggest we ought to do it locally means having to deal with that.

But it can be dealt with.

Let's start with the toughest aspect of that, the beef cattle industry.

At one time, Wyoming had at least one packing plant, indeed right here in Casper.  There was another just outside of the state in Scottsbluff, right over the border, and yet another in Denver.  There were probably others, including perhaps some in the state, but now there are none and all of those which I have mentioned are gone, although one remains in Greeley Colorado.

 February 1922 Casper Packing Company advertisement.

Now, they are gone because the meat packing industry has become amazingly consolidated and the profit margins in packing are, or at least were, low. But if the packing industry could be revived, it would be a natural for Wyoming.  We have everything it requires, at least in certain localities, that being cattle, agriculture for hay and feed corn, sufficient water, good roads and land.

The situation is similar when we consider sheep.  While the sheep industry has really taken a hit, it's slowly somewhat revived over the years and we do have sheep.  Sheep, as an agricultural animal, are interesting in that their primary crop is really wool, with meat being a secondary one.  The meat aspect of this is already addressed by the comments on beef above, but the wool part isn't.

Wool itself used to contribute quite a bit to the Wyoming economy in that there were wool buyers, sorters, and shearers, all in addition to the sheep ranchers, who employed themselves and their herders.  What we never had, however, was a woolen mill, to process raw wool into anything.  We could, but we don't.

This is also true of the milling industry; i.e., flour milling.

 Old elevator in Sheridan Wyoming. This elevator belonged to the Best Out West flour mill, and apparently this was the mill. The hotel next to it is named after the mill.  From Painted Bricks.

Wyoming grows a fair amount of grain, and grows it all over, even though we often do not seem to realize it.  Major agricultural areas can be found in southeastern Wyoming, west central Wyoming, northeastern Wyoming and northern Wyoming.  We grow a fair amount of wheat and corn and if milling facilities were here, we could go the next step.  We don't, however.

We've done better with sugar. We do have some sugar facilities serving, in particular, the Big Horn Basin. Those, it should be noted, are owned by co-ops that formed to operate them with the sugar companies pulled out of that area.  Elsewhere we haven't done as well with that.

Probably the one area that we've done well at recently that might point the way forward a bit is in the category of alcohol.  

A bottle of Wyoming Whiskey, depicted in a thread here on Lex Anteinternet.

I addressed the introduction of a local bourbon some time ago, indeed quite some time ago, on a thread that was once one of the most popular here on this page, that being The Rebirth Of Rye Whiskey And Nostalgia For 'The Good Stuff' & Beer and Prohibition.  That thread also addressed, a bit, the history of local beers.  On the whiskey, I noted; 

Wyoming Whiskey is a new brand of whiskey that's distilled in the tiny Hot Springs County town of Kirby.  It came about, according to what I've read, as the Meads purchased farm ground in the area in order to have a steady supply of corn for their cattle operation, and then hit upon the idea of distilling whiskey in the county.  Hot Springs County is otherwise famous for, well, hots springs, and is of course the location of Thermopolis, which features the same.

This trend has really continued since then, and there's apparently some sort of distillery in Teton County now as well, and there is one that is distilling a couple of different types of hard alcohol here in Natrona County.  I can't opine on the Teton County one at all, and I'm only aware of it as the state government recently turned down the request of an Idaho distiller for a grant to help relocate its headquarters over into the county, as another distiller opposed it.  For that matter, my experience with the local Natrona County distiller is limited to having had a single shot of its vodka, given to me by a friend as proof that not all vodka is bad.  While my position on vodka remains that the difference between the best vodka and the worst is the price, I have to say that I was impressed because . . . well, it didn't taste like vodka.

It's not only hard alcohol that's making inroads into Wyoming and processing the state's agricultural produce. Beer has made an amazing return in these regards.

Snake River Brewery in Jackson Wyoming.

I've commented on this before, but here too the trend has really developed.  And to an amazing extent.  There are now breweries in quite a few Wyoming towns putting out a really high quality product.  This industry has gone from one which, a few years ago, would have required a person to hunt for a Wyoming beer (and a few years before that there were none) to one in which a person could easily buy beer on any occasional and always find a high quality Wyoming beer of any type.  It's really amazing.  

Indeed, Wyoming beer is even canned now.  That may not seem so amazing, but a brewery has to put out quite a bit of beer before they begin canning it.  But that's now going on.  Indeed, beer is the Distributist Economic champion of Wyoming.

This revival, it should be noted, represents a return of an industry that once was all over and very local.  Casper, which recently saw local beer return at The Wonder Bar, an bar that dates back forever in Casper's history, once had a regional brewer in the form of Hillcrest Brewery.  

Bottles from Hillcrest Lager Beer, a beer that was once brewed locally but is no more. Casper doesn't bottle any beer anymore, but it does brew it once again.

There are even a couple of wineries in Wyoming. I don't know anything about them, other than that they exist, but this is additional evidence that at least in terms of processing a local agricultural product into a finished one, alcohol leads the way.

Okay, its one thing to point all of these things out, but what of it.  We don't have packing plants, mills, etc.  What, a person might ask, do you propose?

Well, I'd propose something that Wyomingites hate, state assistance for private enterprise, or even direct involvement in it.

Now, before people have their hackles up too much, let me point out that we only oppose this to a limited degree.  We're actually okay, based on our track records, of supporting start ups with grants.  We're also okay with investing in doubtful technologies, if they relate to the mineral industry.  Witness there all the money the state is sinking into Clean Coal Technology.  I'm not opposed to that by any means, but we must admit that the chances of it ever paying off are remote.

So, before we get too much further, let us consider North Dakota Mill and Elevator.

Eh?

Postcard of the North Dakota State Mill, 1915.

While nearly a neighboring state (it doesn't border us, but you can sprint across the corner of South Dakota and be there in no time at all), North Dakota, which we will return to when we discuss education, has a really different cultural history compared to Wyoming.  With a heavily Scandinavian immigrant population from early in the 20th Century, North Dakota had and still has a political culture that, quite frankly, was occasionally sympathetic to socialism.

Now, let me be frank, I'm not terribly sympathetic with socialism, but we can take a page out of an example of something that works, if it works.  And here's something that has worked for North Dakota.

It's a state owned operation, formed to address problems that farmers were experiencing, but it doesn't receive a subsidy from the state and its self supporting.  

This is the same model used by the other Dakota, South Dakota, for South Dakota Cement, an operation so successful that it has expanded even recently and markets its product in every state bordering South Dakota.  It even had a plant, at one time, here in Casper.

Now, I'm not suggesting that we need state run or owned industries everywhere.  But perhaps we can take an example where there isn't a private industry.  Critics would say, and they should be listened to, that if a private industry isn't operating it's for a good reason. But, we also have to admit that there are a fair number of industries that get their start from some sort of government support.  Indeed, the entire transcontinental railroad was such an example, getting state support in the form of massive land grants, which is essentially the same as a massive infusion of capital.  There's no reason to pretend otherwise.

So, where we don't have a local industry, perhaps we should consider if the state should help. The state's already helping the coal and petroleum industries via various studies at the University of Wyoming, including clean coal.  The very day I wrote this part of this entry, Governor Mead was appearing on the front page of the Tribune at a state funded facility studying clean coal.  And let's not forget the pile of administrative entities that help business one way or another, from the Farmers Home Administration to the Small Business Administration.

So, suing the North and South Dakota models, could the state infest in the infrastructure for milling, packing and wool processing?  Perhaps it could. And, after an initial start up, perhaps it could require those industries to run on a self-sufficient basis.

We could make a shift of this type, but as noted, it's going to take some outside the box thinking.  One thing it would also take is some inside the state, state investment.   And we have to do that now, like Frank Pantangeli has it in The Godfather Part II, "while we have the muscle".

What that would mean is that we actually do some thing that we claim we've been going to do forever, and diversify the economy, but in a way that we can actually do it, rather than on some wild hypothetical.

And we do have the cash, i.e., the economic muscle, right now.

Part of the evidence of that is that the state has been wasting money on long shot lawsuits to try to bend Montana and Washington to our will in order to ship coal to a coal shipping port yet to be built and which never will be.  That appears likely to come to an end here soon, as even Trump Administration didn't support Wyoming in the case pending in front of the Supreme Court (the Biden Administration may very well oppose Wyoming at that level, if it can).  And that's not the only place Wyoming is applying case even in an era in which we are stripping money from everything we can.  Wyoming gets the concept of strategic spending, but it's not strategically spending for a new economy, but in attempts to preserve the old one which has such an uncertain future.  Packing plants to process the state's livestock, grain mills to process the state's grains, wool mills to process wool, and other modern agricultural sector investments should be made right now.

People will look at this and thing "oh no, that's old fashioned", but the truth is that agriculture is the economic base of some states that do at least as well as we do.  And we have to build with what we have and, more importantly perhaps, what people want.  Right now the signs are there that people aren't going to be wanting petroleum the way they once did, and they don't want coal anymore at all.

Nuclear power would offer another opportunity to Wyoming as well, if only we could overcome the bizarre negative mindset about it, which we've also addressed  here before.

The POWER Interview: Technology Can Solve Problem of Nuclear Waste

The POWER Interview: Technology Can Solve Problem of Nuclear Waste: Debate continues about nuclear power's role in electricity production, particularly as it revolves around climate change. As a zero-emissions source of

Interesting article on this topic.

Nuclear power should be something that Greens, particularly radical Greens, should be screaming for night and day.  Indeed, any really scientific thought on energy that was designed to address safe, sustainable, and clean energy, would be based on nuclear power.  Opposition to it is so unscientific as to make Godzilla movies look like actual paleontology.  

Suggesting the state build a nuclear power plant is really going big, so to speak, but perhaps we really need to ponder the state getting into that somehow.  I can't see the state building one, although just a few months ago we were read to invest in the checkerboard lands to an extent that would have exceeded building a nuclear power plant.  Perhaps we should ponder it.  We should at least ponder backing one, and backing one or more in locations where others have just shut down.

And yes, I can hear the cries "Socialist!"

Now, granted, this is a species of socialism, albeit of an odd type that differs from the classic economy destroying the government owns everything variety.  The concept would only be, on sort of  Distributist basis, to form those entities aiding major Wyoming industries where we aren't able to finish the product ourselves on an reasonably economic level.  We can't, for example, create refineries and have them compete.  Nor power plants. But packing plants are another matter, and mills are a demonstrated different matter.  This wouldn't bring in an economic miracle by any means, but it would allow us to further make use of the resources that we do have, right here. And there would be a market for the product, including a small market right here, in that the state is already in the lunch business for kids up to age 19.  Moreover, tags like "Wyoming beef" do have a local price and maybe even a regional one that could be useful for a product grown and finished here, and that is already the case.

M'eh

We're going to have to do something, and do something with what we've got the resources to do that something on.  Doing nothing is never an option unless failure is.  

So what about Alaska?

Well, it seems its challenge is similar, but with different resources. The way out seems about the same.

Assuming it is a way out. But it seems to me it is.  Working in a flour mill or packing plant no doubt wouldn't be as lucrative as working on a rig, but its work.  Right now, with four rigs, it isn't as if there's that much work in that sector.  And a successful economy builds on itself.

So, we could do something about where we are heading, which is to focus on what we have, and where the future seems headed.  But will we?

I sort of doubt it.  

In today's Tribune there's an interesting op ed by Mike Leman, the Catholic legislative liaison in Wyoming, which had this interesting quote.

For decades, many who follow the legislature have quipped that Wyoming is the most conservative socialist state in the country. How so? Because we Wyomingites have never been averse to true benefits that come from government programs, but we have preferred to let the oil and coal industries pay for them, rather than reaching deeper into our own pockets. Due to declining revenue from mineral severance tax, local government agencies have been cutting services and putting in place hiring freezes for years. Last November, Governor Gordon announced an additional $500 million in cuts, which include layoffs.

The quote is amusing in that there's more than an element of truth to it.  Proud of our independence and conservative values, we sometimes fail to appreciate that we've had it good, except when we had it bad, because of the extractive industries upon which we've nearly solely relied for everything.  Even those who don't work for those industries do in some fashion, one way or another, as everything is dependent upon them.  We're getting a clear warning that we're going to now have to look elsewhere, and even if Leman doesn't really have the definition of subsidiarity really right, in my view, the principal is there and now its applicable to us in spades.

But that will require an overhaul of our thinking.  And that would require us to face grim reality that things are pretty rapidly changing.  There's no sign whatsoever that coal will "come back" and blaming that on the government or pinning hopes on a lawsuit pending at the Supreme Court level is hoping against hope.  The energy economy is rapidly evolving and with it transportation technology is rapidly evolving as well.  

We have, however, other resources upon which we rely.  We could build on those.

My prediction is, however, we won't.  Instead, we're going to hear, in this bizarrely polarized era, how the Federal Government must give the Federal lands the state forever eschewed when it became a state, to the state, based on strained theories. And we're going to hear railing against the Biden Administration, which is going to be blamed for everything.  The GOP will either unite in the state on those points or rip itself apart as some harbor the fantasy that there was some way that Trump could have received another term, if "only if", in spite of the rejection by over half the electorate, a half that has no sympathy whatsoever with Wyoming's economic woes.  We won't be building packing plants when we could, or flour mills.  And we'll continue to tolerate a situation in which agricultural land is needlessly busted up into patches that don't raise a single cow, and the passing of large ranches to out of state owners who hold them as playgrounds.

At some point, we'll ask the satirical question, "is this why we can't have nice things?", when in fact we have them, if only we had the vision to see that we do.

*Which is a reason, I'd note, that people who claim to speak for "Wyoming values" ought to be given a second glance, as often they don't have all that stout of connection with the state.