Can a new governor bust the Cowboy State out of its stagnant economic corral?

The Embassy Tavern in Green River is a piece of the real Wyoming. The tavern’s awning and purple sign hang over Railroad Avenue. Across the street are the tracks that carry Union Pacific’s industrial traffic. Pickup trucks line the curb, and inside, the walls are decorated with beer posters, old railroad signs and a dartboard.

The clientele is authentic as well. Green River, in southwest Wyoming, has grown a recent crop of gourmet coffeeshops and art galleries. But the folks who frequent the Embassy are not the latte and wine-drinking type. They order Bud Light, Easy Street, Crown Royale, “the usual,” says the bartender, Misty.

The Embassy is a good place to get a look at the working-class heart of Green River, a bedroom community for the nearby industrial center of Rock Springs. There are no less than 5,000 local jobs in coal mining, soda ash (a raw material of glass and chemicals), natural gas, the railroad and a power plant, according to the Green River Chamber of Commerce — a fair number for a county of about 37,000 people.

This is also as good a place as any to put your finger on the pulse of Wyoming, particularly during election season, according to the bar’s owner, Chris Boswell, a five-term Democratic state lawmaker who serves as House minority leader. Last fall, the buzz around the bar focused on who would succeed Wyoming’s two-term governor, Republican Jim Geringer.

It might have seemed a given: Republicans outnumber Democrats in Wyoming two to one, and they had held all the state’s top elected offices for nearly a decade, including a strong majority in the Legislature and all three of Wyoming’s congressional seats.

House Speaker Eli Bebout, the Republican candidate for governor, was connected to — and financed by — industry, and also endorsed by Vice President Dick Cheney, who came back to his home state to pump Bebout’s candidacy. The last big industrial boom during the 1980s had attracted many workers with conservative leanings, even diluting Democratic strongholds like Boswell’s district.

But the barstool rumblings took Boswell by surprise. Many of his customers were talking about the Democratic candidate, Dave Freudenthal, a former U.S. attorney for Wyoming, who offered an alternative to the business-as-usual politics in the state. “So many conservative people, blue-collar, Republican, Wyoming voters coming in, said they were planning to vote for Freudenthal,” Boswell recalls.

As it turned out, the tavern’s crowd was a good predictor: When the electoral dust settled, Wyoming’s political landscape had changed. Freudenthal eked out a slim, 3,800-vote upset, which left Republican Party officials shocked and Democrats wildly celebrating.

But the election was just the first of the daunting challenges ahead for Freudenthal. Despite the state’s image of rugged independence and the bucking-bronc rider on its license plate, Wyoming, in reality, is a lot like Green River. To pay the bills, the state depends on mineral and energy companies that are headquartered far away and answer to stockholders, not local residents. Entrenched, powerful and highly subsidized ranching interests also have a great deal of control over the state — and they like things the way they are.

Gov. Freudenthal has the power to dramatically reshape state agencies and change the rhetoric regarding a range of issues, from methane gas drilling to wolves — both of which are spreading quickly across Wyoming. Yet Freudenthal is cautious about his plans to steer the state down a new path. It will be a “series of incremental steps that will have a bold outcome,” he says.

No one thinks it will be easy. With Republicans, industry rules In his role as a legislator, Chris Boswell talks to senior government classes at Green River High School, and every year he asks students the same question: “Are you planning to be in Wyoming in five years?”

Ten years ago, “three-quarters said they thought they would be in the state. Five or six years ago, maybe half said they would (stay),” Boswell reports. “What was astonishing this year (2002), when I talked to four classes, not a single person raised his or her hand.”

The depressing message from the students was clear. In increasing numbers, the youth of Wyoming are forced to seek economic opportunities elsewhere. Wyoming may be the energy and minerals capital of the nation — it ranks first among the states in the production of coal, soda ash, bentonite and uranium, and hundreds of millions of dollars of mineral and gas revenue flow into its treasury every year.

But the mineral-based economy doesn’t provide enough jobs. In fact, drilling and mining tend to require fewer people every year, even as production increases.

There’s no shortage of evidence that what Wyoming has done for more than a hundred years isn’t working. Repeated booms and busts in the coal mines and oil fields have alternately overwhelmed communities and then ripped out their souls, as fortune-seekers, exploiters and opportunists arrived and departed.

Wyoming’s last governor, Jim Geringer, promised reform and more diverse job opportunities when he was first elected in 1994, under the tired slogan that Wyoming was “open for business.” But Wyoming missed out on the 1990s tech-driven prosperity enjoyed by neighboring Rocky Mountain states, while Geringer merely poured more support into industry and agriculture.

Geringer appointed industry-friendly leaders to run key state
agencies, including the Wyoming Oil and Gas Conservation Commission, which regulates oil and gas wells. His assistant state-land director, Harold Kemp, came up with the winning motto, “Go Blue!” to encourage gas companies to drill for coalbed methane on the patchwork of state lands that are colored blue on most land-use maps.

As President Bush and Vice President Cheney helped push thousands of new coalbed methane wells, with their associated grids of new roads, pipelines, power lines and compressor stations, “Geringer’s Environmental Quality Council (another state agency) was very active weakening environmental regulations,” says Dan Heilig, director of the state’s leading environmental group, the Wyoming Outdoor Council. This included loosening restrictions on how much arsenic and barium are allowed in water discharged from methane wells, Heilig says.

Even ranchers who opposed methane development on their land couldn’t get through to Gov. Geringer, environmentalists say. “Conservative Republican ranchers couldn’t get a meeting with Geringer,” says Jill Morrison, an organizer for the Powder River Basin Resource Council.

“Geringer just did not want to have a dialogue about it. Anyone who was having trouble (with methane) was locked out of his administration. He had his marching orders (for state agencies) to facilitate (drilling), and that’s what they did.”

Geringer squelched any dissent from within the state agencies by imposing a “one-voice” policy, which required all official comments to be funneled through the governor’s office. Agencies such as the Wyoming Game and Fish Department couldn’t go public independently with their concerns about environmental impacts. Geringer ran his administration as “an arrogant, know-it-all kind of guy who was argumentative and didn’t want to hear anybody else’s point of view,” says former State Auditor Dave Ferrari, who worked on Freudenthal’s campaign.

Voters look for a fresh start

The Republican candidate for governor, Bebout, seemed to be made in Geringer’s image. He had served in the Legislature for 14 years, all the while running an oil and gas and reclamation business. Critics accused him of conflict-of-interest votes. His campaign was heavily financed by industry: According to an analysis by the Wyoming Equality State Policy Center, roughly half of his out-of-state contributions and about one-quarter of his in-state donations came from oil and gas interests.

In contrast, Freudenthal sauntered into election season with a different viewpoint and a down-to-earth way of operating.
Freudenthal, 52, is a polished lawyer with solid government experience, but he also has undeniable rural credentials, having grown up on the family farm near Thermopolis, a tiny northwest Wyoming town. He paid for his college education by building tanks for nearby oil fields, although, like many others in Wyoming, he picked a college in the East.

With a degree from Amherst College in Massachusetts, he “permanently returned” to Wyoming in 1973, as he pointedly noted in his campaign biography. He began his government career working for then-Gov. Ed Herschler, D, in a variety of planning, advisory and economic positions. Then he earned his law degree from the University of Wyoming and followed the legal path. In 1994, President Bill Clinton appointed him U.S. attorney for Wyoming. Wyoming has had numerous Democrats in the governor’s office over the years, but Freudenthal was an underdog in the polling before this election.

Political analysts offered a variety of reasons for his stunning upset over a Cheney-backed candidate in what’s become a solid GOP state. Voters were unimpressed with Geringer’s lackluster eight years and feared more of the same with Bebout. The Republicans also couldn’t smooth over inner-party differences after a bruising primary, which included newspaper and radio ads by former Sen. Alan Simpson, who called one of Bebout’s Republican opponents a liar. For some Republicans, Bebout was also too much of a Democrat — he had switched to the GOP in the early 1990s.

The most important reason for Freudenthal’s win apparently was the voters’ deep desire for something new. “People wanted to see some kind of change, or at least a mid-course correction,” says Freudenthal. The youth exodus, he adds, is a symptom of the problem: “The state hasn’t invested in an economic future that works.”

It was clear that the Republican Party’s connection to the state’s extractive and ranching interests played a pivotal role in the election. In one of the many newspaper editorials endorsing Freudenthal, Rob Shaul, editor of the rural Pinedale Roundup, said he planned to vote Democrat “for the first time in my voting life.” Shaul called Bebout “the establishment candidate of the Wyoming Republican party, and I feel the Republican Party has a rot growing at its core because of its super-cozy relationship with the state’s mineral and ranching industries.”

During his campaign, Freudenthal didn’t emphasize his environmental concerns, but there were hints of them in his speeches and writings. There are intimations in his private life, as well. His wife, Nancy, also a lawyer, works in a private law firm that has a partner, Kim Cannon, who used to be president of the Wyoming Outdoor Council. Nancy Freudenthal also once headed the state agency regulating mining reclamation. She’s handled mineral tax litigation, including a landmark case that forced energy giant Exxon to pay its fair share of taxes.

Environmental concerns have rarely been so pressing as now in Wyoming. Plans abound for development, from dramatically increased drilling for coalbed methane in the Powder River Basin to expanded oil and gas activity in the Red Desert. There’s also more pressure to drill the Bridger-Teton National Forest and even talk about siting more power plants in the state’s massive coal fields. In the Powder River Basin alone, where 15,000 coalbed methane wells have already been drilled, the Bureau of Land Management is analyzing company requests for another 35,000 wells. Wyoming, says Jill Morrison of the Powder River Basin Resource Council, “is going to look like Swiss cheese all over.”

Dan Heilig of the Wyoming Outdoor Council cites studies showing that the Green River Basin in southwestern Wyoming contains an estimated 300 trillion cubic-feet of coalbed methane, “one of the most signif-icant gas-bearing basins in the country.” That means the state can expect considerable industry pressure, furthered by the Bush-Cheney initiative, to develop that area also, he says. But Heilig hopes that, under Freudenthal, Wyoming will be less inclined to buy the Bush administration’s programs “hook, line and sinker,” and that it will be possible “to balance the environment and not let oil and gas activity dominate the landscape.”

Turning “a very large boat”

Wyoming is equipped for transformation at the moment, because unlike almost every other state in the nation, Wyoming has money to spend. Most state governments are running deeply in the red, their tax collections down due to recent national economic distress. But Wyoming, even though it has no income tax and low consumer taxes, has built up nearly $2 billion in a state trust fund through taxes on extractive industries.

Ironically, while the high-tech economy has bombed, Wyoming’s traditional energy economy has provided Gov. Freudenthal with a surplus of over a hundred million dollars.
“Wyoming is in an unprecedented position to influence its future,” says Sam Western of Sheridan, author of the recent book, Pushed Off the Mountain, Sold Down the River: Wyoming’s Search for its Soul. Western criticizes Wyoming for depending so heavily on industry for state funding, and for dumping subsidies into agriculture, which accounts for scarcely 2 percent of the state’s economy. He would rather see the state broaden its economic base and adequately fund its single four-year university. But don’t expect Freudenthal to take the big-bang, large-stroke approach.

“Dramatic action has been talked about for years, and it hasn’t happened,” says the new governor. “I’ve made some relatively modest proposals because I’m convinced that this is a long march and not a quick step.”
In his first speech to the Legislature, Freudenthal called for investing $15 million each year over the next 10 years in “community economic infrastructure.” The money could be used to buy land to attract companies, extend utilities and telecommunications to industrial parks — perhaps even to build daycare centers.

It’s part of what Freudenthal refers to as his “pragmatic” strategy. The new governor doesn’t like labels; he cringes when he hears suggestions that he was elected because of his “conservative Democrat” agenda. Likewise, he won’t accept that he’s a “liberal.” Freudenthal prefers to think of himself as realistic: Fundamental change, he explains, “maybe won’t happen even in my lifetime.” Wyoming, he says, “is a really large boat and it’s hard to move it more than a few degrees at a time.”

Freudenthal believes “the mineral industry will continue to be bulwark of the economy,” and he steadfastly defends agriculture. Asked if ranchers and farmers have been oversubsidized, he says flatly, “No,” and adds, “I don’t take lightly the importance of agriculture as it relates to the culture and how we see ourselves and open space.”

It should come as no surprise that Freudenthal treads lightly around the heavy-hitter issues that confront Wyoming. He is, after all, still one of the only Democrats at the Capitol. He’s already appointed some Republicans to jobs in his administration, a move which may keep the radical GOP wolves at bay. Bowing toward agriculture is a way to buy time and offer an olive branch to Wyoming tradition. It also gives Freudenthal a chance to acknowledge the support he received from Powder River Basin ranchers, who were dismayed by their treatment at the hands of coalbed methane developers.
But Freudenthal is moving quickly to change one aspect of Wyoming’s colonial status, with what amounts to a financial crackdown on industry. Among his first legislative proposals, he’s requested about $400,000 to pay for five new mineral auditors. For years, there’s been suspicion — and occasional proof — that mining and energy companies under-report their production and revenues. Accountability groups, such as the Equality State Policy Center, have pressed for increased scrutiny, saying the state loses millions in royalties and taxes each year.

One of Freudenthal’s high-profile GOP supporters, Tom Stroock, a petroleum landman and former Casper legislator, says he backs the more stringent audits. Comparing the situation to the way Enron and other energy traders manipulated markets and defrauded investors, Stroock says, “The same nice people who brought Texas and California their problems sure didn’t treat us any different.”

Freudenthal is also pushing for Wyoming to get a better deal from the pipeline companies that take the state’s natural gas to distant markets. Because of a complicated situation involving energy traders, other middlemen, and a bottleneck in pipelines leaving Wyoming, the state’s natural gas sells for only a third of the price of gas produced in other states, such as Texas. This “price differential” costs Wyoming as much as $1 million a day in revenues. Freudenthal wants to finance the Wyoming Natural Gas Pipeline Authority to tackle the problem.
On energy-company accountability, the last governor’s approach was “government shouldn’t involve itself in private affairs,” Stroock says. “But if you’ve got an industry that means a million dollars a day to the state, you can’t argue government philosophy.” That’s why he supported Freudenthal, Stroock adds, because “he’s more open to new ideas and new ways.”

Off to a cautious — and rocky — start
So far, Freudenthal’s go-slow approach seems to resonate in the Legislature, where Republicans hold a 45-15 majority in the House and a 20-10 margin in the Senate. “We expect to work together. He’s open and likes the clash of ideas,” says incoming House Speaker Fred Parady, a Republican who has managed to get re-elected five times in what was once staunchly Democratic Sweetwater County.

Though Parady is reluctant to talk about Bebout’s defeat, he acknowledges that voters wanted change. “I think expectations are high,” he says. “They’ve seen the state drifting for a decade or better.” One of the most “startling indicators” is the sharp decline in school enrollment, Parady says. From 1990 to 2000, while the state population grew from 458,000 to 493,000, school enrollment tumbled from 100,000 to 86,000. Wyoming, Parady says, “is a hard place for families to get established.” Even without full support in the Legislature, Freudenthal wields significant power, making appointments to run state agencies and exercising a line-item veto over budget bills.

Freudenthal remains publicly cautious about environmental protection. “I think we will be more sensitive to those issues than the prior administration,” he says. Using a twist on an old Wyoming cowboy adage, he says that the hands-off, “ ‘Powder River, let her buck’ approach of the last administration (toward industry) will be moderated to some considerable degree.”

He’s already made symbolic headway by removing the muzzle Gov. Geringer had placed on state agencies. “Agencies are free to communicate with you ... without prior clearance from our office,” he told the annual Wyoming Press Association convention in January. Heilig of the Outdoor Council says the new governor “will let biologists be biologists and let engineers be engineers.”

Freudenthal has also toned down the anti-federal, anti-environmentalist rhetoric that prevailed in the state. Steve Thomas, who runs the regional Sierra Club office based in Sheridan, hopes that Wyoming can “get over this hyperbole and get down to some serious conversations over these issues.”

Conservationist optimism has already been tempered, however. On January 31, Freudenthal named John Corra as the new director of the Department of Environmental Quality. Corra, a Republican who worked as an environment coordinator in the soda ash industry, is also a former president of the Wyoming Mining Association.

Freudenthal told the Casper Star-Tribune that he expects Corra to be fair and that the appointment does not represent “an abandonment of environmental values.”

Heilig disagrees: “I find it difficult to believe that (Corra) is the best man for the job.” The problem isn’t just that Corra has worked for a minerals company, Heilig says; it’s more that Corra has led “an advocacy group” — the Mining Association.
It’s too early to tell how Corra will perform as head of the state agency that assesses environmental impacts, environmentalists say. They are worried, but still hold out hope.

Freudenthal says his larger goal — building a strong new economy of Wyoming entrepreneurs — is one that “doesn’t happen overnight.” He would like to see a state where wealth is created locally, instead of one to which wealthy outsiders flock because of its low tax burden. But the new governor is realist enough to know it may never happen, given Wyoming’s formidable barriers to development — harsh climate, long distances between towns, isolation, lack of amenities and the skewed importance of minerals. Freudenthal readily admits, “Wyoming is not for everybody.”

Former State Auditor Dave Ferrari, who was part of the broad coalition of progressive Republicans and activist Democrats at the core of the governor’s campaign, worries that Wyoming’s history will be hard to overcome. “I hate to be cynical, but they were talking about the same things 50 and 75 years ago,” he says. Still, Freudenthal has taken a significant step forward by opening the doors to state government. Good intentions, access to information and democracy can go a long way toward solving problems.

“The governor sets the overall tone for the state of Wyoming,” Heilig says. So far, the tone seems better.