A top railroad executive said Wednesday in Billings that declining oil prices and coal demand have thrust his industry into depths not seen since the Great Recession.
Matthew Rose, chairman of Burlington Northern Santa Fe, told The Gazette during the Montana Energy conference that about 4,600 railroad employees are furloughed nationwide, about 10 percent of the workforce. These are roughly the same levels as in 2007 and 2008 when the economy began falling off a cliff, he said.
Volumes were down 3 percent in 2015, and Rose said the Fort Worth, Texas-based company — whose energy portfolio is about 30 percent — is bracing for a tough few years.
“We are in an energy depression, and industrial recession, and the consumer is doing just OK,” said Rose, a keynote speaker at the conference at the Radisson Hotel’s Montana Convention Center in Billings.
BNSF has about 2,500 employees in Montana, where 71 percent of the company’s shipments are coal. Rose said he did not have the number of furloughs in the state immediately available.
The company has also stopped hiring during the downturn and is offering buyouts to older employees, Rose said. Those staying are frustrated but hanging on, he added.
“Our employees, they’re pretty resilient. Everybody is pretty disappointed that the volumes are down, but they want to know what they can do to help.”
The three-day Montana Energy conference is hosted by U.S. Sen. Steve Daines, R-Mont. The primary sponsor is the Montana Chamber Foundation.
The event features 12 keynote speeches centered around the beleaguered fossil-fuel industry, although several speakers address renewable energy.
With energy prices in the tank across most sectors, industry leaders had little to cheer about Wednesday. In the fossil-fuel industry, executives said they’re also concerned about looming federal regulations, such as the Clean Power Plan, but still feel hydrocarbons will remain a component of the U.S. energy portfolio long-term.
Colin Marshall, CEO of Cloud Peak Energy, said Montana has a chance to be a leader in developing cleaner coal technology, such as carbon capture and sequestration.
Does this make economic sense now, as much as other new technologies did at the ground floor? Marshall wondered. And it will need public help to get started.
“It’s about as economical as the first windmill,” he said.
Cloud Peak operates the Spring Creek coal mine near Decker with 245 employees and two mines in Wyoming, Cordero Rojo and the Antelope mines.
The company is also attempting to develop the estimated 1.4-billion-ton Big Metal mine with the Crow tribe on the reservation, then export through the proposed Gateway Pacific terminal near Ferndale, Wash., on the Puget Sound.
The project could deliver an economic shot in the arm on the reservation, where unemployment is high, Marshall said.
“We’re really focused on that, because we think it’s the right thing to do.”
Daines said Wednesday he hopes the conference will help people better understand the diverse impact of energy statewide.
“As Montanans, we need to come together on the same page about energy in Montana,” Daines said.