For decades, Sidney Sugars has fired its boilers in late September with coal from Savage Mine. That first wisp of steam trailing from the factory’s stacks is as a reliable a sign of summer’s end as the yellowing of the cottonwoods.
The 874-acre, single-pit mine could soon be closing.
Power plant owner Montana Dakota Utilities says the 50-megawatt generator is no longer economical and will be replaced with natural gas. The same might have to be true at Sidney Sugars, too.
“We always felt it was like a three-legged stool,” said Sidney Sugars General Manager David Garland, describing relationship between the mine, the power plant and the beet factory. “And now the other two legs are being kicked out.”
Already natural gas is used to fire some of Sidney Sugar’s boiler needs. If necessary, the company will transition to gas completely, though Garland said there’s unease about converting entirely to one fuel source, of not being able to switch to coal if gas prices jump.
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Sugar beets are a $100 million a year economy in southcentral and northeastern Montana.
Coal economics have been working against the mine and power plant for some time. Facing $1.4 billion in debt in October 2018, Savage Mine owner Westmoreland Coal Co. filed for bankruptcy, a move that affected three Montana mines, Savage being the smallest. Rosebud Mine, which feeds Colstrip Power Plant was the largest. The third is Absaloka Mine, a key revenue source for the Crow Tribe of Southeast Montana and fuel source for the Sherburne County Generating Station in Minnesota.
The big driver for coal’s decline was just across the state line from Sidney in North Dakota, in the Bakken shale formation, where in March natural gas production set a record, according to the North Dakota Department of Mineral Resources.
The North Dakota oil boom has captured the headlines, but Bakken natural gas production has outpaced the growth of oil output from 2007 to 2017, the federal Energy Information Administration reports. During the same time period, natural gas leapfrogged coal as the nation’s primary fuel source for generating electricity. The last year coal was the United States' dominant energy source was 2015, when it generated 33% of the nation’s electricity. Coal's energy share is now less than 30 percent. Ten years ago, coal accounted for 44% of the nation’s electricity, EIA reports.
MDU’s contract for coal from Savage Mine will tap out at the end of next year, but the utility has indicated to the sugar factory that the power plant may continue to use coal into the first few months of 2021, which would keep coal around through February, while Sidney Sugars is still turning beets to sugar.
After the Lewis and Clark draws its last load of coal from Savage Mine, there will be a few years of mine reclamation, during which time Sidney Sugars might still be able to obtain truckloads of coal from parts of the mine that haven’t yet been reclaimed, Garland said.