The Montana State Land Board has a critical decision on Monday. The board will decide to move Montana forward and develop our vast coal treasure, or it will decide to delay the greatest economic expansion for Eastern Montana in our lifetime. The economic impact of developing the Otter Creek coal tracts and the resulting tax revenue that will provide funding for the future well-being of the state of Montana is unprecedented. The magnitude of the decision is also unprecedented. The Land Board will decide the future of the Montana coal industry. A “no” decision will signal those who seek to develop Montana coal, and thus bring jobs and capital to Montana, to stay away. A “yes” decision will signal that the board has put out the welcome sign to economic growth and tipped its hat to move our state forward.
According to a Montana Chamber of Commerce poll, 63 percent of Montanans want to see Otter Creek developed, and our economy needs it desperately. To not move forward at this time of recession and economic difficulty is unconscionable, especially as Montana looks at looming budget shortfalls in the hundreds of millions of dollars in next biennium.
Otter Creek contains 1.2 billion tons of coal, of which 572 million tons are owned by the state of Montana. The board’s decision, however, unlocks the gate to all 1.2 billion tons and the jobs for railroaders, miners, engineers, accountants, secretaries, welders, managers, janitors and the hundreds of support jobs among retail and those who supply the equipment to mine and transport coal.
Appraisals by Montana Department of Natural Resources and Conservation have placed the minimum bonus bid on Otter Creek tract proposal at $37 million dollars. This is just the right to develop. Royalty payments alone (severance tax is additional) would amount to $1.4 billion dollars over 40 years.
And there is more. Spring Creek mine in Eastern Montana mines about 18 million tons per year, employs over 200 full-time miners and has spent approximately $52 million dollars in Montana in 2007. The average coal wage is $72,000 per year! The Montana DNRC estimates 30 million tons a year at Otter Creek and 443 full-time employees. In addition, the DNRC estimates that it will take $1.7 billion worth of capital over the life of the mine, not including the cost of rail from Otter Creek to Miles City. That will mean tens of millions of dollars per year circulating in the Montana economy — jobs for families, education for children, tax revenue for Montana.
Global warming rhetoric
Rhetoric that mining coal will create global warming is just that: rhetoric to keep Montana coal from being mined. The United States gets 50 percent of its electricity from coal. Other nations will continue to demand coal, and there are good prospects that Otter Creek coal will also be sold to other counties as well as the United States. It is time to stop being paralyzed by the rhetoric that obstructs development in Montana. Let us move forward!
As Montana legislators who care about people, jobs and families, we urge the land board to move now to develop this unparalleled resource. This issue has been debated for six years; it is time for action not more talk and more delays. It is time to stop leaving our treasure buried in the ground!
State Rep. Tom McGillvray represents District 50 in Billings. His opinion has been endorsed by these other Republican state lawmakers: Keith Bales, Tom Berry, Duane Ankney, Cary Smith, Lee Randall, David Howard, Ken Peterson, Penny Morgan, Dave Kasten, Krayton Kerns, Elsie Arntzen, Walt McNutt, and Sens. Bob Story, Roy Brown, Jeff Essmann and Don Steinbeisser. Keith Bales