While renewable energy and natural gas race to stake their claim in Montana, the state’s coal industry is staying afloat despite reports to the contrary.
Montana Coal Council Executive Director Bud Clinch told the Big Sky Times though the volume of coal isn’t the same as it was this time last year it’s not a reason to sound the alarm.
He said Montana is down approximately 1 million tons from what it was last year, which is only a 2-percent reduction, but that could change before the end of 2019.
“I’m reluctant to say that we’re on a continuing downward trend because a number of factors change month to month,” he said.
Fox News reported that U.S. coal consumption has reached a 41-year low and coal plant closures have increased.
The announcement that two Colstrip, Montana coal plants will be closing in December has elicited concern. But Clinch said the plants don’t define the state’s entire coal industry.
“I know Montana is in the news because of the issue associated with closing down two of our power-generating units at Colstrip, units one and two,” Clinch said. “And it’s oftentimes confused, or people don’t realize that only about a third of our coal consumption, actually less than that — maybe 25 percent — goes to the Colstrip facilities.”
He explained the remainder of the coal is used domestically and internationally.
“It doesn’t mean it’s the demise of the Montana coal industry,” he said. “It’s a much smaller impact than the uninformed people would think.”
Clinch indicated the state coal industry is below the 10-year average because of competition with natural gas power plants that have come online. He said the inexpensive price of natural gas is due to massive extraction occurring in North Dakota’s Bakken shale formation
Competition coupled with concerns over carbon dioxide emissions and rising carbon dioxide emission regulations has adversely impacted the coal industry, he said. Additionally, the promulgation of new regulations during the Obama administration scared some companies into retiring older coal plants and compelled them to move toward natural gas.
“And as I understand it, natural gas produces a lesser emission per gigawatt-hour than coal,” he said. “And so consequently, I think in boardrooms around the country those people that are in charge of long-term investments in energy facilities are forced with decisions about whether they continue to invest millions of dollars into air quality containment systems or do they phase into natural gas production.”
Renewable energy sources are another factor in the downturn of the coal industry. Clinch believes the notion to desire them is a superficial one.
“I think when people are asked would you rather get your electricity from a fossil fuel source or renewables I think to the credit of the environmental community they’ve done a very good job of convincing the public that renewables is where it’s at,” he said.
The rubber has not hit the road enough to prove that renewable energy sources are a more viable financial trade-off, Clinch said.
President Trump has taken action to help the industry, but it may not be enough.
“There’s nothing he can do about it,” said Randy Hardy, former head of the Bonneville Power Administration, in a Fox News article. “The market economics are so compelling that absent massive federal government subsidies to keep coal alive, you couldn’t do it economically.”
Clinch was slightly more optimistic in his outlook.
“Already, I think President Trump has had some effect on it by rolling back some of the regulations that the Obama administration had initiated,” he said. “So, I think we’ve already seen the benefits of that. The other thing, the marketplace, and those factors that are in place, I’m not quite sure what kind of role he can have in that.”
