BOOM AND BUST IN WYOMING

Wyoming has relied heavily on natural resource wealth due mostly to just the sheer amount of valuable minerals, including oil, coal, uranium, and natural gas, in the state’s varied geologic formations. The social and economic complexities imposed on rural towns through the exploration and development of these mineral resources offer the opportunity to analyze the communities in terms of dramatic change. These powerful changes are caused by a boom-and-bust cycle that has become synonymous with Wyoming’s economy.

Nothing so dramatically illustrated the fact that Wyoming’s economy is dependent on energy resources as the mid-1970s energy boom and the ensuing bust in the 1980s. The severance tax on minerals had been imposed just in time, not only to help cushion the immediate impact of another minerals boom, but to try to mitigate the inevitable huge swings in economic fortune accompanying such events.

Some Wyomingites reveled in the sudden prosperity in the period, while others were alarmed by the influx of more people, the pressures on wildlife and the environment, and the social problems associated with boomtown conditions. Some towns were practically overwhelmed with the impact of the swelling population. The problems in some places were so great that State government stepped in.

In the previous two decades, Wyoming political and business leaders tried to reassure Wyomingites that the economy was becoming too diversified to be dependent on a single industry. Minerals, agriculture (primarily livestock raising) and tourism seemed to be steady partners in the state’s economy. However, tourism, centered around the national parks, paid low wages and remained distinctly seasonal. Crop agriculture, never a significant factor in employment, competed with the burgeoning corporate farms in California and elsewhere. By the 1970s, agriculture accounted for less than five percent of the state’s employment. Employment in minerals, substantial in the days of coal-fired locomotives, had fallen after World War II.

During the 1960s and the first two years of the 1970s, the Wyoming economy was in malaise. State income was more assured with the 1969 passage of the severance tax on minerals, but the energy industry was only staying stable with oil prices at less than $10 per barrel. Just one open-pit coal mine in Campbell County, providing fuel to a small power plant nearby, utilized the vast resource potential in the Powder River Basin. Elsewhere in Wyoming, the "bust" in coal brought about by conversion from coal-fired steam locomotives to diesels was still firmly in place. Rock Springs, Hanna, and the coal towns in Sheridan County recorded high unemployment and declines in population during the 1950s and 1960s. Young people, including UW graduates, left the state in high numbers because of the absence of good-paying jobs.

When the Arab oil embargo began in December 1973 and continued into 1974, the price shocks brought some oil exploration back to the state. As the industrial economy endured the oil price shocks, Wyoming’s energy-based industries began to grow rapidly once again. The Overthrust belt in southwestern Wyoming gained the attention of many multi-nationals, bringing boom times back to the quiet towns of Evanston and Kemmerer. High prices brought production back in some older fields.

Even more significant, however, coal became an important fuel source once again, not for locomotion, but for fueling electric power plants. Mines along the Union Pacific line across southern Wyoming, closed after diesels replaced coal-fired locomotives in the 1950s, returned to production. Clean air standards and increasing emphasis on coal also made the lower BTU Powder River Basin coal suddenly competitive with higher grades of coal mined in such places as West Virginia and Illinois that contained more air-fouling sulfur. The thick seams of coal lying only a few feet below the ground allowed for strip-mining to become the preferred method of coal extraction. By 1985, more coal was mined in Wyoming than any other state and that ranking continued into the 21st century.

Even though strip mines required far fewer workers than conventional underground mining, the numbers of new mines and the construction activities required to put them into production brought huge population increases to many Wyoming towns. Mining activities centered around Gillette, Rock Springs and Rawlins, but smaller towns in the coal fields also grew rapidly. Sweetwater County grew to 41,723 in 1980 from just 18,391 ten years earlier. Carbon, Uinta and Converse registered similar eye-popping population jumps, all due to energy production. Campbell County, with a population of 12, 957 in 1970, nearly doubled to 24,367 in 1980. To accommodate their workers, ARCO built an entire town—Wright, dedicated in July 1976—south of Gillette that grew to a population of more than 1,200 in the next decade.

Power-plant construction brought boom times to other Wyoming towns. The Laramie River Power Plant, built over the course of nearly a decade, changed Wheatland from a sleepy agricultural town to the home of a huge crew of construction workers. Similar construction projects in Lincoln and Sweetwater counties added both temporary workers to local payrolls as well as a smaller, but well-paid permanent workers to run the plants.

Prior to 1974, many towns had experienced booms (and the ensuing busts). Few, however, were prepared for the onslaught of miners, construction workers and employees for support companies that descended on Wyoming in a brief period of time. Long-abandoned coal mines in Carbon and Sweetwater counties reopened with investments in new underground and strip-mining equipment. Unemployment, chronic in the 1950s mining towns, shrank to nearly zero. Mines competed for skilled workers and thousands came to the state after hearing about the potential jobs when industrial employment in the Midwest and East was flat or decreasing.
Coal wasn’t the only energy mineral to gain attention in the period. As early as the late 1950s, uranium regained competitive advantage in power plant use in the 1970s. With these new non-weapon demands, industry expanded mines and built new processing mills in several Wyoming locations. Trona, a mineral important for manufacture of glass, detergents and environmental equipment, was in high supply in southwestern Wyoming’s Green River Basin, which held one-quarter of the world’s naturally-occurring trona source. By 1970, more than 1,000 people worked in the trona industry. Peak employment came in 1981 when nearly 4,000 workers were employed by five mines operating in the area.

This energy boom period lasted from 1974 to about 1983. Secondary booms, caused by businesses expanding or new service businesses opening to accommodate the needs of the newly arrived energy workers, fueled local population growth.

Housing, if it was available, became spectacularly expensive in the boom towns. Most towns had no zoning ordinances. Contractors rushed completion of man-camps and barracks. Entire neighborhoods went up within months of their platting. By the end of the decade, mobile homes accounted for almost 20 percent of housing units in the state.

Many Wyomingites became prosperous during those years, but there were contradictions of “prosperity.” Older residents, living off of Social Security or other fixed income, watched property prices spiral upward and, with the rising assessments, the tax bills on their already-paid-for homes. Small business operators, accustomed to hire employees at the minimum wage, suddenly faced competition for laborers from the much better paying mines. Employees in non-mining industries paid increasing prices for food and other staples.

With the increasing population moving into the community, many with families, local schools were stretched to the limit. Some districts were forced to hold double-sessions as new, often modular, units were put up to accommodate the incoming students. Teachers, facing the same inflation as other non-miners in town, demanded higher wages or turned to moonlighting in second jobs. Some left education altogether and took jobs in mining or became land developers. High schools reported increasing incidents of students dropping out before graduation in order to take jobs paying $40-$50 per hour in the mines.

The hard-working and hard-living population brought increasing demands on social service agencies. Child and spousal abuse cases increased dramatically. Law enforcement officers, accustomed to dealing with traffic matters or an occasional shop-lifting complaint, were besieged with calls involving assaults and other more serious felonies.

Town councils were overwhelmed with demands for water and sewer taps for housing developments. Indeed, had not severance taxes been initiated in the late 1960s, state government would have been in no position to help. Without state assistance in the form of loans from the State Farm Loan Board or state housing authority, cities and towns would not have been able to provide water, sewer, and streets for new residents. The State helped with funds for law enforcement and provided an increasingly greater proportion of public assistance, once the province of the cities and counties.

Restaurants and bars were crowded around the clock. Promoters of local festivals, initially aimed at bringing in tourists but also enjoyed by town residents, found little interest among the newcomers in participating. For those working in the mines, they were too busy making money to volunteer for parts in local fairs. However, many newcomers did bring families and a number of them, while not initially thinking they would stay permanently, found they liked it and remained.

By end of the 1980s, Wyoming boom towns began to experience varying degrees of downturn. What started out with a bang in the 1970s turned into a bust in the next decade as several sectors of the minerals industry slumped. Oil prices plummeted with a glut on the market caused by falling demand from the 1970s energy crisis. Coal prices also fell in the 1980s, partly in response to oil price movements, but primarily in response to a large increase in supply worldwide that was brought about by an earlier price surge. 1979’s Three Mile Island accident spelled disaster for the uranium industry and the rapid collapse of Western Nuclear’s company town Jeffrey City.

Thousands of middle class families with children fled Wyoming never to return. At one point in Lander, more than 600 homes were on the market out of 3,000. The town’s Main Street was photographed for the front page of the Denver Rocky Mountain News above the headline “Modern Ghost Town.” During the boom, the minerals industry ranked a close second in terms of percent of total employment, retail trade being first. During the bust, jobs in the mining industry went from 38,603 in 1981 to 17,804 in 1987. Minerals industry employment continued a downward trend even after the bust period, going from 17.9 in 1981 to 10 percent in 1987 to 7.4 percent in 1996. The decline in this industry was especially unfortunate for Wyomingites since it was also the highest-paid industry; average weekly wages in mining in 1996 were $864, far above those of even the second highest-paid industry (federal government, with average weekly wages of $673).

The booms and busts of the 1970s and ‘80s were marked by inexperience blended with community and national obligation, shock mingled with entrepreneurial spirit, excitement turning, at times, to ambivalence and even melancholy, and a process of coming to terms with some of the essentials, both at the state and local level, when it came to mitigating impacts. It was a time too for the minerals industry to directly encounter their effect on the communities within their development areas. This led, in fits and starts, to a shifting philosophy, at least for larger corporations, to a greater sense of social responsibility among executives more versed in geology than psychology.

The twenty-first century brought another boom to the Rockies, this time in the communities of Sublette County, a rural section of western Wyoming. This area of the state is just as rural and was just as untried as the communities already discussed. How Sublette County dealt with their own energy impact dilemma reveals a continuum of boom reactions along with a few lessons learned, as well as some modern variations.

Much of this text is excerpted from Chapter 19 of Dr. Philip Roberts’ A New History of Wyoming.