Coal mines pursued northeast of Billings

2010-03-01T15:03:00Z Coal mines pursued northeast of BillingsThe Associated Press The Associated Press
March 01, 2010 3:03 pm  • 

The push to mine Montana coal continued to pick up steam Monday, as a company with Texas roots said it was pursu-ing mines northeast of Billings that could tap into an estimated 1.2 billion ton underground seam of the low-cost fuel.

The proposal is the latest in a string of coal mine openings and announcements for Montana, which has more coal than any other state — but relatively few mines.

Nick Shakesby, chief operating officer at Maple Carpenter Creek, said Monday that a new mine could be running by 2014, at a site the company controls about 50 miles northeast of Billings.

"We’re not interested in sitting on it. We’re interested in developing it and putting in a mine," he added. "We’re mar-keting it offshore — Asia and India."

The Billings-based company is owned by Jack Hanks of Dallas, founder and former chairman of Maple Energy. It has a permit application pending before state regulators to dig a 300,000 ton test pit near rural Melstone.

Public comments on the application are due by March 10, said Ed Coleman of the Montana Department of Environ-mental Quality.

Maple Carpenter Creek controls 380 million tons of coal through leases on an estimated 30,000 acres. More leases are in the works, Shakesby said.

The company is considering a second mine farther west, near the recently opened Signal Peak mine in area known as the Snider Ranch.

Coal production in the area dates back to the late 19th century. But until Signal Peak, mining activity had largely ended decades ago, after changes to the industry that included the introduction of massive surface mines in neighboring Wyo-ming.

Wyoming now turns out about 400 million tons of coal a year — roughly 10 times the 39 million tons Montana pro-duced in 2009.

But with those surface mines growing more expensive as the most accessible coal disappears — and many mines in the Appalachians suffering a slow decline — Montana increasingly is in the industry’s sights.

"It was always recognized that as things started declining in Wyoming, Montana is the play," Montana’s Democratic governor, Brian Schweitzer, said Monday.

Citing coal’s contributions to climate change, environmental groups and some landowners near proposed mines have tried to curb the expansion of the state’s coal industry.

But so far those concerns have come up short against economic pressures to develop a domestic fuel that is in plentiful supply.

Montana has a reserve base of 120 billion tons of the fuel — enough to last the nation more than a century at current consumption rates.

"Coal is the most abundant energy source in the United States," Schweitzer said. "We’ve got to capture the (carbon di-oxide), but coal will be a significant energy source for decades to come."

Maple Carpenter Creek’s export plans are in line with moves by several major domestic coal producers to strengthen their ties with consumers in China and India. As the Asian economy rebounds from the worldwide recession, industry analysts say imported coal will be in high demand to power future growth.

Shakesby said his company has an agreement with Sumitomo, a Japanese coal brokerage, to market its coal in Asia. However, no sales contracts are in place, he said.

Many of company’s Musselshell county leases were acquired by John Baugues, a Tennessee coal entrepreneur who also laid much of the groundwork for Signal Peak.

Baugues said in a phone interview that he was no longer involved with Maple Carpenter Creek. He is now pursuing mines in the Red Lodge and Bridger areas with California-based Management Energy Inc.

The opening of Signal Peak last fall marked Montana’s first new mine in three decades. The project included a 35-mile rail spur that Maple Carpenter Creek is now negotiating to access.

Other Montana coal projects in the works include a coal-to-liquids plant and accompanying mine on the Crow Indian Reservation, the recent leasing of 731 million tons of coal near Ashland by industry giant Arch Coal Inc., and the state’s pending sale of 532 million tons of the fuel, also near Ashland.

Bud Clinch of the Montana Coal Council said it remains to be seen if that flurry of activity translates into projects on the ground. He said many companies come to Montana "to kick the tires," but only a handful have the money and willing-ness to pull coal out of the ground and deliver it to consumers.

"These projects take huge amounts of capital and a long time to develop," Clinch said.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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