Energy development key to Montana's future, expert says

2011-09-07T16:34:00Z 2011-11-02T16:37:36Z Energy development key to Montana's future, expert says

By JAN FALSTAD

Of The Gazette Staff

The Billings Gazette
September 07, 2011 4:34 pm  • 

Montana, especially Billings, is poised to benefit economically from energy development, but the state still lags far behind Wyoming in coal production.

Don Sterhan, president and chief executive of Mountain Plains Equity Group Inc. of Billings, told the sold-out annual luncheon of the Billings Area Chamber of Commerce on Wednesday that the U.S. demand for electricity is expected to jump 30 percent by 2035.

Montana coal reserves, the largest in the nation and among the largest in the world, can help produce that power, he said.

“Wyoming has half the reserves we do, but their production is 10 times as much. Do you think we have some upside?” Sterhan asked.

In 2009, Montana produced 38 million tons of its estimated 119 billion tons of coal. Last year, production rose to 44 tons from six Eastern Montana mines, he said.

For all the talk of renewable energy, Sterhan said last year the U.S. generated 46 percent of its electricity from coal, 23 percent from natural gas and 20 percent from nuclear sources. Hydropower contributed 6 percent and renewable sources 4 percent.

That mix isn’t likely to change soon, he said.

“We have an infrastructure in this state and the country built primarily on fossil fuels and unless we make a huge investment to turn that around, it will stay dependent on fossil fuels and that’s good for Billings,” Sterhan said.

Montana is unique because it produces 44 percent of its power through hydro-generation, he said, but the country isn’t likely to build more dams.

Addressing the jobless problem requires developing Montana’s energy resources, he said.

“This isn’t huckleberry jam and elk-antler furniture. If we want to move the economy forward in an aggressive way, these are the industries that can produce,” he said.

In addition to the Powder River coal reserves, four other energy projects deserve Montana’s attention and support, he said:

The Bakken oil fields, where 3,000 wells have been drilled in the past three years in a play that could last 40 years.

The Montana-Alberta Tie Line power transmission project.

The Keystone XL pipeline to carry crude from Canada to the Gulf of Mexico with a terminal planned in Baker.

And the Otter Creek coal reserves and Tongue River Railroad, which has the potential of supporting 500 jobs and producing $1.8 billion over its lifetime.

The Billings energy developer, who sits on the board of the U.S. chamber, asked the audience to get involved politically, as well as through their businesses.

After the keynote speech, other executives offered tips to local businesses chasing a chunk of the energy boom.

Mark Francis, general manager of Integra Telecom, said large companies from other states can’t execute very well in rural areas like Wyoming and Montana, so the locals can fill that gap.

“Convince them you know how to solve their day-to-day business problems,” he said.

Michael Sanderson, chief executive of Sanderson Stewart, an engineering and community development company in Billings, said they have pulled Bakken work back home.

“We’re still developing infrastructure, but doing it from Billings because you can’t hire people in western North Dakota or find a place to live,” he said.

Mike Wilson, co-owner and president of Whitewood Transport in Billings, said his company has moved a tremendous amount of heavy machinery for oil- and-natural-gas developers and that work won’t be slacking off soon.

“At least for the next three months, we’re rocking and rolling,” Wilson said. “The rest of the country may not be, but we are.”

Contact Jan Falstad at jfalstad@billingsgazette.com or 657-1306.

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