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Montana looking at oil from coal reserves
The Associated Press
Montana Gov. Brian Schweitzer believes the state could produce oil and other petroleum products from the millions of tons of coal reserves it owns in southeastern Montana.
“This is developing energy without pollution,” he said in an interview May 20. “That’s a win for everybody.”
Schweitzer’s pitch, which stems from a meeting earlier in May with U.S. Defense Department officials in Washington, D.C., is to mine the coal and convert it to liquid fuel, which would be shipped out of state via pipeline.
The project could involve building a $2.5 billion conversion plant that would employ 1,000 people, as well as provide 5,000 jobs during its construction phase, he said. And the plant already has a buyer for the fuel: the U.S. government.
“The (Defense Department) said they will buy all the fuel that we can produce with the ... process,” Schweitzer said.
“It sounds too good to be true, doesn’t it?” Schweitzer said. “This is a physicist at the Department of Defense saying we’re getting serious about this, and we’ll buy all you produce.”
The governor first mentioned the potential project during speeches in mid-May at Montana Tech in Butte and to a Missoula Rotary Club luncheon. Fischer-Tropsch technology would be used His office is just beginning to form an informal task force that will examine the idea, with help from research officials at Montana State University, said Bruce Nelson, the governor’s chief of staff.
“This is pretty exciting stuff,” Nelson said. “If you can utilize the coal without those downsides, it becomes an incredible potential for benefit in so many ways.”
The coal in question is more than 1 billion tons in the Otter Creek valley, which lies due east of the Northern Cheyenne Indian Reservation and 75 miles south of Miles City.
The state owns rights to about 600 million tons of this coal, gained three years ago in an exchange with the federal government. Great Northern Properties, a Colorado-based company, owns about the same amount, interspersed with the state-owned tracts. The Northern Cheyenne Tribe also owns rights to nearby coal.
At the heart of the plan is using an updated version of the Fischer-Tropsch technology developed by two German scientists in 1923 to convert coal into petroleum products. Hitler used the process to power German tanks and other vehicles during World War II when the country was short of oil. More recently, when much of the world wouldn’t trade with South Africa during Apartheid, that country used the same technology to produce oil.
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