MTPR

Montana Coal Production Drops By 4 Million Tons In 2016

Jun 9, 2016

Montana coal production is down by nearly a third of what it was last year. From January to the end of April, coal companies in Montana produced 9.6 million tons of coal, 4 million fewer tons than last year.

Bud Clinch from the Montana Coal Council says it’s caused by a combination of economic and environmental issues. He says this year in particular has been difficult because of the mild winter weather. Most people don’t need to use coal energy for heat.

"The consumption at the utilities around the country are using less coal. Two, there is unprecedented low prices of natural gas. And the third factor coming into play is the total reduction in exports. And so that market has kind of dried up right now because it’s being filled by other Pacific Rim countries that have expanded their coal production."

Clinch says a combination of that with the low price of coal may cause a significant decrease in tax revenue for the state. He says that if this year keeps going the way it seems to be going, tax revenue from coal could be down by $25 million by the end of the year.

"It’s a huge deficit that many statewide programs are dependent on that revenue. And so there will have to be some adjustments."

Clinch says it’s difficult to predict what the future for coal will look like from here.

"Well, I don’t see any short-term relief. People that are much more familiar with this than I am will continue to say that coal will continue to be a large fuel source for electrical generation well into the future. Whether it will ever increase back to the level that it was a year, or two, or five years ago, that’s kind of yet to be seen."

Jeff Fox from Renewable Northwest, an organization that promotes clean energy, says that investing more in renewable energy can fill the energy gap.

"Montana really needs to act in order to remain energy relevant. We’ve been an energy state for a long time and it's important we continue to be active in the energy space. And that means focusing on developing our solar and wind energy resources. Overall, I just think the markets for coal power are down as utilities and consumers are opting for cleaner energy."

Fox says that Montana is currently considering several new wind energy resources. He says if the projects come to fruition, it will open up 500 permanent jobs and 11,000 construction jobs.