As trade tensions escalate following tariff announcements by former President Donald Trump, Wyoming’s energy sector — a crucial part of the state’s economy — faces a mix of potential gains and losses, Wyo File reports.
Industry experts caution that while the coal industry may remain relatively insulated, the effects on natural gas and other energy resources could ripple through the state.
China’s recent announcement of a 15% tariff on US coal and liquefied natural gas (LNG) imports may not directly affect Wyoming’s coal industry. The state predominantly produces thermal coal, used for electricity generation, while US exports to China mainly consist of metallurgical coal for steelmaking.
According to US Energy Information Administration data, Wyoming exported only 0.5% of its total coal production internationally in 2023, making it unlikely that coal tariffs will have a substantial immediate impact. Seth Feaster, an energy analyst at the Institute for Energy Economics and Financial Analysis, noted that Wyoming’s coal market is largely focused on domestic power plants.
While direct coal exports may be unaffected, the potential for tariffs on US LNG could disrupt energy markets. If international demand for US natural gas declines due to higher tariffs, an oversupply could drive down domestic prices. This would benefit households and businesses that rely on natural gas for heating but could shrink state tax revenue and discourage new drilling projects.
The glut of cheap natural gas could also undermine Wyoming coal. US electric utilities, which often have the flexibility to switch between coal and natural gas, may opt for the cheaper option to save costs, reducing coal consumption.
“Energy markets don’t exist in isolation,” Feaster emphasized.
He suggested that factors like weather conditions could have a more immediate influence on Wyoming coal demand than trade disputes.
Further uncertainty looms in the oil sector. A trade war that restricts the flow of Canadian crude oil to US refineries could create new incentives for increased domestic oil production. Wyoming, with its established oil industry, might benefit from such a shift, though the scale and timing of the impact are uncertain.
Meanwhile, Wyoming’s growing interest in rare-earth minerals — critical for technology and renewable energy applications — faces an unpredictable future in the context of tariff battles, particularly with China, a dominant player in the rare-earth market.
