Shortages of steel-toed boots in Helena? Yes, it's the Bakken, yet again

The article is too long and too jam-packed with information to summarize, so just go read Jan Falstad's article for Lee Newspapers entitled "Booming Bakken: Oil flurry spreads across Eastern Montana"

The usual information about housing shortages spreading ever westward in Montana is of course present, and there is this about traffic on I-94:

Like wagon trains of yesteryear, the traffic tells the tale of the Bakken oil boom.

Semitrailers haul sand, liquid nitrogen, pipe, tanks and modular homes across Montana to the oil fields and change the prairie night sky.

“When you drive down the interstate from Billings to Miles City or Glendive, all you see is traffic at night. It’s almost like the outskirts of Minneapolis,” said Mike Coryell, head of Miles City Economic Development Council.

Sigh. Yes, this is all too true. I log about 1000 miles a month pounding across eastern Montana highways, and I can attest that the days when one could put the cruise control on 82, put on some music, go to sleep, and wake up when you arrived at your destination are sadly gone. (Note to the beloved: I'm joking!)

On a more serious note, Falstad writes that the legislature has some serious work to do in sharing the wealth with the communities that created it. It's funny how Helena is full of politicians and bureaucrats who probably largely agree with President Obama's philosophy about "spreading the wealth around," particularly when the wealth flows from east to west in our fair state. That needs to change.

Under current law, the state keeps 50 percent of mineral tax revenues, schools get 20 percent, counties 19 percent and cities and towns, which shoulder most of the impacts, receive one-tenth of 1 percent.

She also notes that the real impact on Miles City may come if the Otter Creek coal fields start getting developed. I won't hold my breath.

But the most enjoyable part of the article was this:

One Helena mom couldn’t find steel-toed work boots for her son last summer because Bakken workers living in Montana’s capital and commuting to work had bought them all.

What will be next? Missoula becoming a bedroom community for the Bakken? That could prove interesting...

Decker coal mine in Montana laying off workers -- meanwhile, Bakken jobs are projected to boom

While this may not be directly related to the war on coal that the Obama administration has waged, it certainly couldn't have helped: the Decker coal mine in southeastern Montana is laying off 75 workers.

The increased regulation laid on coal-burning electricity plants by the EPA have already cost a good number of workers in Billings their jobs at PPL's plant, now scheduled to be mothballed. And now, another set of workers in a major southeastern Montana coal mine. Many of them live in the Sheridan area, but as everyone knows, folks in Sheridan come to Billings all the time for shopping, medical care, and other services that are found here in the nearest "big city" to Sheridan and surrounds.

Meanwhile (hat tip to Bruce Oksol at Million Dollar Way), the Bakken is going to be producing 50,000 new jobs by 2015.

Bismarck State College is teaming up with Williston State, Fort Berthold, Sitting Bull and Turtle Mountain Colleges to provide necessary training.

"This is probably one of the biggest and most important partnerships that we`ve had with the state institutions. And it should have happened a long time ago," said Fort Berthold Community College President Russell Mason

The multiplier effect of energy development (like any economic development) thus shows itself in a positive effect on tribal and other area colleges.

Of course, none of this is thanks to the federal government (in spite of the President standing in line to take credit for increased domestic oil production.) Also thanks to Bruce over at Million Dollar Way: of 187 rigs currently drilling in North Dakota, only 3 or 4 are on federal land. (Unless you count reservation land as federal land -- which you shouldn't, since its use should be determined solely by the tribes involved.) I would point out that there is not a lack of federal land in North Dakota -- the Forest Service has pretty vast tracts of National Grasslands in the western half of the state, and there is some BLM land, too.

As Bruce points out there is perhaps some Intelligent Design involved favoring North Dakota, allowing for "sweet spots" of Bakken drilling to be located outside federal land.

The full article is in the Minot Daily News.

Coal state Democrats -- does Montana follow the pattern?

A lot of coal state Democrats are running from President Obama and his stances, which can only be reasonably described as hostile to the coal industry.

Some (but by no means all) high-profile Montana Democrats have not tended to follow that example. Gubernatorial candidate Steve Bullock has broken with his fellow Democrats on the land board on a number of occasions, voting against coal development. Senator Tester has likewise been pretty quiet about President Obama's EPA, and indeed has doubled down in defending EPA policies that other coal-state Democrats have condemned as unreasonable. As we noted before in our "between a frack and a hard place" piece, one plausible explanation for Montana Democrats being timid about going all out for coal is matter of just who is writing the checks to their campaigns.

As a Charles Johnson article noted today, Steve Bullock's lead in fundraising this cycle is completely a function of his high percentage of out-of-state donors. As always, Johnson's article is good, straight reporting. It is interesting that the Helena Independent Record's headline emphasizes Bullock's money lead, whereas the Billings Gazette headline emphasizes the fact that his lead results from out-of-state money. Given that the Gazette caused near-coronary events in Republican households across their readership area by endorsing Republican Rick Hill in Sunday's paper (is Hill poised for a more comfortable victory than we have been led to believe?), perhaps this headline is meant to give a little justification for that endorsement.

Getting back to money, Bullock's lead in fundraising demonstrates just how a dependence on out-of-state money puts Democrats in red states like Montana in a bind. Public sentiment is strongly in favor of natural resource development here in Montana -- and not just with Republicans.

And yet, when red state Democrats toe the environmentalist line insufficiently, they run the risk of losing all of that out-of-state money from liberal activists around the country who want some return on their investment.

Red state Republicans and blue state Democrats have no such conflict: any out-of-state conservative donor, for instance, will tend to have similar concerns as the average (right-of-center) Montanan on things like energy development.

Coal development in Montana and surface rights

There were recently a couple of articles that highlight some competing interests regarding coal mining in Montana. The first is a Daily Interlake editorial decrying the "war on coal" by the EPA, spurred by the closing of a PPL Montana coal plant, with ownership citing EPA regulations as the proximate cause of rendering the plant unprofitable to keep open.

The story is a familiar one -- the plant would have to be refitted to the tune of $38 million in order to meet current regulations. As someone who breathes the air in this part of the Yellowstone Valley and who has experienced some respiratory problems that were new to me until I moved here, I confess that I would want to know a bit more about just how out-of-date the plant is with regard to emissions before completely dismissing the EPA's standards as unreasonable.

Still, it seems inescapable that the editors are correct that the current bunch at the EPA have "declared war" on coal.

Rick Hill landed a nice body blow to Steve Bullock in the debate the other night on this very topic:

Hill used his question to attack Bullock’s record on coal development, asking why Bullock failed to join 24 state attorneys general from coal-producing states this year when they challenged new Environmental Protection Agency rules Hill said would harm coal-fired power plants.

It seems as though Bullock has a problem choosing which battles to fight. He could tilt at windmills by trying to take down Citizens United singlehandedly. But he couldn't be bothered to file a brief against Obamacare in spite of that law's unpopularity in Montana, and he wouldn't join in challenging EPA coal regulations in spite of his claim to support coal development.

I digress, however. The other article that was interesting to note was this piece in the Washington Post regarding the conflicts that some Montana ranchers are having over coal development.

The strip mining of coal is, without a doubt, the most unpleasant kind of energy resource development to have in one's backyard, since its footprint is so large. It is not a permanent footprint, given modern regulations about the restoration of the soil and landscape, but for a given generation, it probably feels like forever while it goes on.

The fundamental problem, however, is the American system of decoupling surface rights from mineral rights. I am fortunate to own the rights on my own ranch, but not all ranchers are blessed in that way. One thing is certain (at least to me) -- nothing, and I mean nothing, should be allowed to compromise the long-term viability of agricultural activity on anyone's land. Oil wells will eventually run dry, coal beds will be stripped, natural gas will be bled off. But as long as the rain falls and the sun shines, and as long as the soil is pure and ground water is uncontaminated, agriculture can go on -- theoretically forever, if things are taken care of. It is the ultimate renewable resource.

The point here is that while perhaps our legal system shouldn't allow a limitless veto power to surface owners, they should have a powerful say about what mining and drilling happens on land they own -- precisely because they and their descendants will be ranching and farming that land long after the resources beneath the ground are gone. If ranchers are trying to block coal development, it seems pretty clear that they as surface owners aren't being compensated fairly and their concerns aren't being adequately addressed.

While readers of Montana Headlines know that I am pretty bullish on traditional energy development, this is one place where I have to cast my vote with the sometimes curmudgeonly Cattle Queens (and Kings) of Montana.

Montana coal trains ready to “spew”?

Railroads make money by hauling things that people want to buy. That money can in turn be used to improve rail service.

This is vital in places like Montana that depend on rail and highway transportation to access markets around the country and around the globe. As demand rises in Asia for coal from Montana and Wyoming, traffic from trains hauling coal will increase in Montana. On that point, opponents of coal mining in Montana are right.

Whether the trains will "spew coal dust across several states,” as the purple prose of the Billings Gazette photo caption states (using the language of coal opponents in an indirect quotation without identifying who used that word -- the text of the article doesn’t say), remains to be seen. With increased traffic does come the necessity for improvements, whether of safer crossings, more overpasses and underpasses, or lines that are routed around denser population centers -- all the things that high-volume rail traffic requires.

Coal opponents, as the Gazette article reports, claim that "the local impacts could be severe for local and state governments dealing with the increased rail traffic,” and that state and local governments could be left picking up the tab.

It is true that railroad crossings involve government funding, and that is because railroad crossings are a shared responsibility between governments and railroads. Railroads own the railway rights of way and the tracks, while governments own the roads and streets involved. This is primarily a federal responsibility, not a state and local one. The federal government brings in a great deal of tax revenue in corporate and individual income taxes from the coal industry. Any costs that state governments might incur will be more than made up for with royalties, excise taxes, and income taxes that the state collects.

What we are talking about here is what our friends on the left claim always to want the government to build -- infrastructure. But infrastructure that greases the wheels for traditional energy development (and that is a shared private/public responsibility, no less) apparently isn’t the kind of infrastructure they have in mind.

Why, the logical person asks, don’t opponents take a collaborative and constructive attitude toward coal development and the railway service that builds up around it? Just once, it would be nice to hear something to this effect: “We fully support the development of coal mining in Montana -- and we look forward to working with the coal industry and railroads to improve our railway infrastructure in Montana. We want coal development and we want rail traffic that disrupts our lives and our air quality as little as possible. So here are some suggestions that we think will work to everyone’s benefit...”

Would that be so hard? If the real agenda is global warming activism, I suppose it would be very hard indeed. If the real agenda could instead become economic development and our state’s fiscal health, then we might hope for something more constructive and collaborative.

Coal development should go full speed ahead in Montana, and those who are concerned about rail traffic should put their energies into finding ways to improve railway crossings and routes rather than into stopping coal-mining in Montana.

Signal Peak Energy -- Coal in the Bull Mountains

It's Monday, and time for more on old-fashioned energy development in Montana.

Signal Peak Energy has submitted their bid to lease state land for coal development in the Bull Mountains near Roundup. Their bid of $3.5 million essentially meets the minimum bid that the state said it would accept -- 30 cents per ton, which was the same bonus payment Signal Peak had agreed on with the BLM for its land in the area.

This is, of course, just an upfront bonus. The state will also receive additional money in the form of royalties (set by Montana law at a minimum 10%) on all coal actually produced.

We are a long way from coal actually being mined, though. The state Land Board (made up of our 5 statewide officeholders -- currently all Democrats) must approve the lease, and then all of those agencies have to go to work on their studies and reviews and analyses and inquiries. One or more agencies can be predicted to make things difficult -- we'll see down the road -- and we'll see whether any objections are solid or simply obstructionist.

There is a time for public comment on the bid, but one would expect that the Land Board will approve the lease, this being an election year and all.

One thing worth noting -- Signal Peak is the only bidder and was probably willing to make the bid because it already has operations and infrastructure in the area. If Montana's government were going out of its way to encourage developing what the governor calls the "Saudi Arabia of coal" we have in this state, wouldn't we have a business climate that would encourage more players to be in on the action?

In the long run, having multiple competing coal developers actively working in Montana would not only increase the amount of coal being produced, with attendant state revenue, jobs, and economic development -- it would also eventually lead to bids actually being part of a... yes!... bidding process -- as in competition -- which generally leads to higher bonuses and royalties.

We should, however, perhaps consider ourselves fortunate that we have at least one company willing to meet the minimum bids set by the state. We could, after all, have thrown a coal party where no guests ever arrived.

Helena’s City Council tries to stop coal in Montana -- and some food for thought on alternative energy

It’s Monday -- time for some fossil fuel news. Again this week we will venture far afield from the Bakken, and even from oil. It is to Helena we go, and coal...

There has been quite an ongoing kerfuffle in Helena, as said city’s council weighs in on whether coal shipping terminals should be built out in Washington. Apparently, the city council has members who are concerned that shipping terminals in the Puget Sound area will decrease quality of life in Helena, and they want the U.S. Army Corps of Engineers to do a study, pronto.

For those who aren’t familiar with the routine, if you want to stop something, you study it to death. And the question of why Helena, alone among Montana cities with railroad tracks running through them, should be uniquely concerned about increased train traffic isn’t really explained.

Don’t get us wrong -- we don’t like waiting for trains to get through a crossing any more than the next person. And perhaps there will be more train exhaust in town -- we personally prefer magic trains that don’t have exhaust or make noise. Montana Rail Link should buy some. But at a recent meeting in Helena, it was left to someone named Schweitzer to ask the obvious question: “If it didn’t have the word coal in here, if it had grain, would we be here?” In other words, would they be debating this issue?

We’d like to say that this was the good guv sticking up for coal, but it wasn’t. It was somebody named Carl Schweitzer, not Brian (no word on whether they are related.) While the governor has called Montana the “Saudi Arabia of coal,” Gov. Schweitzer apparently seems to think that Saudi Arabia got all of that wealth by leaving oil in the ground rather than drilling for it.

Getting back to Carl Schweitzer’s question, though -- it was apparently never answered, which is in itself an answer. No, if Montana were shipping out huge quantities of grain by rail, with the same traffic and the same exhaust and noise issues, we doubt that activists would be trying to stop the building of a major grain-loading terminal on the West Coast. They might justly want practical solutions to the increased traffic, but one doubts they would be trying to stop or even decrease the amount of grain shipped from Montana.

The Sierra Club, predictably, was at the Helena City Council meeting. We would like to say that the Sierra Club has an undying interest in the traffic waits, air quality, and noise in every city the size of Helena across America, showing up regularly at their city council meetings. No, the reason that the Sierra Club is weighing in would not go away, even if railway companies built bridges and tunnels sufficient to keep there from being any waits at railway crossings, and even if they could baffle the sound into silence and suction the exhaust from Helena’s air:

Bob Clark, senior organizing representative for the Sierra Club in Missoula, acknowledged that his group seeks to phase out coal in favor of renewable energy, energy efficiency and energy conservation, and he said the barriers to those solutions are not technological.

This is, in other words, just about stopping coal development by any means necessary, and it would be more honest if those involved would just say so. There is much to admire about the Sierra Club. No sane person wants dirty air or water, and there was unfortunately an earlier generation of industry that honestly didn’t seem to care if they were dumping pollutants wherever it was convenient. The Sierra Club played an important role in changing our nation’s culture for the better on that score.

With all due respect to Mr. Clark, however, the barriers to replacing coal are technological, just as the barriers to having a computer in every home back in the 1960’s was technological -- it was possible to put a computer in every American home in 1969, but could it have been done without massively wasteful government subsidies, and would the product really have been any good?

It is all well and good to go on about alternative energy, but the reality is that if we had the technology to efficiently produce wind and solar energy at competitive prices, its production wouldn’t need to be subsidized -- and it is massively subsidized, while providing a minuscule amount of our energy supply. We are all for the government supporting research into alternative energy -- billions of dollars worth of research. It is crazy, however, to rush technologies into mass production that just aren’t ready.

In 2012, it makes as much sense to try, on a commercial scale, to replace coal and oil with wind and solar as it would have, in 1969, to have a government-subsidized program to replace the libraries in every city and home with a computer. Had governments tried to do so -- putting high-cost, low-functionality computers into every home (taking up most of the living room,) we would today look at those beasts in a museum or junkyard and text someone (using a cheap mobile device that does infinitely more than a 1969 mainframe,) asking “what were they thinking?

Likewise, someday, as a future generation is driving (or hovering -- so the cost and unsightliness of roads can also be eliminated) vehicles that use cheap and clean energy sources that haven’t even been thought of yet, at less cost than we pay now for gas, they will see all of these ugly wind farms, rusting unused in the rain, and wonder out loud: “what were they thinking?”