Jump to: OTTER CREEK COAL TRACTS
Studies find no U.S. market for Otter Creek coal
View Declining Markets for Montana Coal, the Synapse Energy Economics (pdf)>>
Two recent studies commissioned by Northern Plains Resource Council confirm the lack of domestic markets for Otter Creek coal. A detailed report by Boston-based Synapse Energy Economics and another report by Montana economist Tom Power delve into a variety of reasons why Arch Coal’s proposed Otter Creek mine would be an overseas export mine.
U.S. demand for coal has declined by 14 percent since 2007, and according to the Synapse report, “The future of coal for U.S. power generation is uncertain at best.” Only five new coal plants were built in 2012, versus 50 plants that were retired, with many more retirements announced.
Lower natural gas prices, new environmental regulations, and higher mining and transportation costs, have hurt coal’s short- and long-term cost competitiveness. New energy efficiency is curbing increased energy demand, while renewable energy’s market share is growing as wind and solar power become cheaper. America’s coal fleet is aging, leaving decades-old power plants struggling to meet emission standards that are aimed at protecting public health.
Beyond the general economic case against coal, Otter Creek coal has an additional unique disadvantage – it is up to seven times higher in sodium than coal from the southern Powder River Basin in Wyoming. Because sodium causes slagging problems at power plants, demand is weak for high-sodium coal, and the few power plants that would take high-sodium coal are particularly on the chopping block. Already, seven of 10 prospective buyers of Otter Creek coal have announced plant retirements or conversion to natural gas or biomass.
The Power report also documents that the market for Tongue River Valley coal has changed dramatically between 1986 and 2012.
The case is clear – Otter Creek coal would be bound for Asian markets.
Proposed Otter Creek coal mine comments
On January 16 & 17th, the state Department of Environmental Quality (DEQ) held public scoping meetings about Arch Coal’s plan to mine 1.3 billion tons of Otter Creek coal near Ashland and export it to Asian markets.
Some sample talking points for Otter Creek scoping comments included:
The process is flawed: The permitting process for the Otter Creek mine is being fast-tracked by Montana DEQ and the impacts to the Otter Creek and Tongue River Valley must be considered thoroughly with no environmental issues overlooked.
The Otter Creek mine will do nothing for America’s energy independence: As U.S. coal markets are declining, Arch Coal and other coal companies are looking toward overseas coal markets. China and other Asian nations would get the energy, coal and railroad companies would get the profits, while Montanans would bear the social and environmental costs of this development.
The Otter Creek mine will lead to the building of the Tongue River railroad: The Tongue River railroad would condemn private ranchland and property for 50+ miles, cutting ranches apart, creating hardship for landowners, and devaluing property.
Agriculture – not coal – is Montana’s number #1 industry: The one-time “harvest” of coal in the Otter Creek Valley will permanently ruin good ranch country. The aquifer will be mined away and the piles of crushed rock making up the “reclaimed” land surface will no longer be good bottomland. In addition, land will be taken out of production for the Tongue River Railroad, and remaining farm and ranch operations will be harder to operate and the property will be de-valued. The long-term economic health of family-based farming and ranching will be sacrificed for the boom and bust of a strip mine.
Air pollution. Greenhouse gases aren’t the only issue with coal. Burning coal, for example, is far and away the biggest source of toxic mercury pollution. Other pollutants like nitrogen oxide, sulfur dioxide, carbon monoxide, and other toxins. Burning coal also releases fine particulate matter into the air, as do the diesel engines that will carry the coal by train for over a thousand miles to the West Coast, and the ships that will carry this coal across the Pacific. These particulates lead to heart disease and can worsen chronic conditions like asthma and COPD.
Climate Change: The coal from this one mine would release 2.5 billion tons of carbon dioxide into our atmosphere, one of the biggest sources of new carbon to be released into the atmosphere. The threat of climate change is real, and it is accelerating. 2012 was the hottest, driest year ever in the contiguous United States and across much of Montana, and was Montana’s worst year for wildfires in more than a century. The coal from Otter Creek will aggravate an already deteriorating situation, and it will exact a particularly high price on farms and ranches.
Conflict of Interest: Because almost half the coal at Otter Creek belongs to the state, the state is – for all practical purposes – the business partner of Arch Coal in this mine. It’s simply not reasonable to believe that the state will honestly study and effectively regulate this mine when it has a direct financial interest in the mine’s development.
Cumulative impacts. Little things can be hard to see, but they often add up to big things. Important things can be hard to see if they happen slowly. The Otter Creek mine will create many costs, and the accumulation of these costs adds up to a high price paid for this project. But it’s a price that won’t be paid by the developers. Instead, Montanans will pay the price for ruined land and water, for an altered climate, for an overburdened rail system, and for communities cut in half by growing coal train traffic. Native residents will pay the price of ruined cultural sites and artifacts. Hunters and anglers will pay the price when our surface and ground waters are damaged, and healthy rural landscapes cut to pieces. Montanans will pay the price of having a state government that once again wears the “collar” of extractive industries owned by out-of-state interests.
Please call Natalie or Svein if you have questions at 406-248-1154.
Coal Export: Raise Your Voice, Montana!
The U.S. Army Corps of Engineers announced in October 2012 where it will hold public meetings on the proposed coal export terminal at Cherry Point, Washington, to gather comments for an environmental impact statement (EIS). All the public hearing locations are in Washington state. There were no public meetings in Montana, even though Montanans will be greatly impacted by the increased export of Montana and Wyoming coal via rail and ship to Asia. In December 2012, Northern Plains chartered a bus and picked up dozens of Montanans on its way to the closest hearings in Spokane, Washington. About 20 were able to give verbal comments at the Army Corps hearing attended by 700 people.
Strip mining for coal poses a direct threat to farmers and ranchers whose livelihoods depend on access to productive land and clean water, and communities along the route would be impacted by substantially increased coal train traffic, potentially experiencing serious health effects from diesel fumes, increased noise, and coal dust; traffic congestion that could delay emergency vehicle response times; increased numbers of accidents and dangerous derailments; and a decline in economic productivity due to a decrease in overall quality of life.
Montana needs to be included when the U.S. Army Corps of Engineers evaluates this project! Because it did not schedule any meetings in Montana to seek input from citizens who will be impacted, Northern Plains also held “People’s Hearings” in Billings, Bozeman, and Missoula. Montanans were given an opportunity to voice their concerns about the impacts coal export will have on their lives and their communities. Comments were sent to the Army Corps.
Heavy Traffic Ahead
Arch Coal files Otter Creek mine permit
In July, Arch Coal filed a new mining permit application with the Montana Department of Environmental Quality to open up the Otter Creek coal strip mine. The proposal would cover 19,200 acres of state, federal and private land in southeastern Montana. The permit was filed at the end of July, but DEQ officials kept it quiet for a few weeks and the public wasn’t notified.
Northern Plains, National Wildlife Federation, Montana Environmental Information Center, Sierra Club, and Earth Justice are all plaintiffs in a case that challenged the Otter Creek coal tracts lease granted by the Montana Land Board. If this mine is approved, it would threaten the water, land, and livelihoods of the Northern Plains members and family farmers and ranchers in the Tongue River and Otter Creek area. The coal is slated for export to Asia. We intend to fight this tooth and nail every step of the way.
The permit has not been deemed complete yet. When it is considered completed, the review process, which includes public comment and hearings, will begin. Here is a link to the current permit application. The entire permit is very large, if you would like a copy of the entire permit (which includes the application, baseline tests, maps, etc.) please contact Natalie at 406-248-1154 or natalie@northernplains.org
The Greenhouse Gas Impact of Exporting Coal from the West Coast, (2011) an economic analysis by Dr. Thomas Michael Power. He spoke at the Billings coal conference March 9-10, 2012, at MSU-Billings. For more information on how to get involved in the conversation on increased coal trains through Billings, call Rose at 248-1154.
Coal exports: The costs to Montana communities
The Otter Creek Valley (Photo by Peter Lesica)
When Arch Coal leased the Otter Creek coal tracts in southeastern Montana, it stated in its March 18, 2010 press release, ”We believe these Northern PRB [Powder River Basin] reserves will help us competitively serve U.S. power producers, supply additional coal for export to emerging Asia or possibly house the site of a future coal-conversion facility.”
Since then, Arch has acquired a 38% interest in Millennium Bulk Terminals-Longview, LLC., the company behind a proposed coal export port in Longview, Washington, created an Asia-Pacific subsidiary, and brokered a deal to export coal out of a British Columbia terminal.
What will this mean for Montanans? It will mean that communities such as Billings and Helena could see 40+ additional trains per day passing through the city. Western Organization of Resource Councils (WORC) has authored an informative white paper on the subject.
For more information:
The Hidden Costs of Coal: Exporting Montana coal to Asia factsheet
Farmers, ranchers have fought coal development for 40 years
Local farmers and ranchers are asked (or told) to pay a heavy price so that an out-of-state mining company can maximize its profit profile. Since much of our membership base is in rural southeastern Montana, many of our members are directly affected by the costs of coal. In the words of Rosebud Creek rancher Clint McRae:
For 40 years, the citizens of southeast Montana have been repeatedly asked to absorb the impacts of natural resource extraction. We have done our part. We have sacrificed the loss of water, land, property, and quality of life for others to enjoy electricity at the flick of a switch.
Coal and other fossil fuel development is based on the practice and principle of externalizing costs, shoving them onto the general public and onto the natural world in the form of pollution, impacts to human health, and destruction of land and water resources. These costs are rarely, if ever, reflected in the price consumers pay. Coal, for example, is a dirty, financially risky fuel of the past filled with substantial hidden costs to society. Every new coal project puts off America’s transition to clean energy and is a step backward at a time when America needs to be reaching for a future of clean and renewable energy sources.
Northern Plains has two responses to the many fossil fuel projects facing Montana. First, we shine a light on the true costs of fossil fuel development so that people, land, and water do not unfairly bear those costs. In some cases, that means changing the way development is approached and ensuring that laws are enforced; in some cases, it means preventing certain developments because they are inherently unjust.
Second, our members understand that making progress to reduce our dependence on fossil fuels also means (1) helping people to understand the practical value of renewables and energy efficiency, and (2) helping people overcome institutional and policy obstacles to increased use of renewables and energy efficiency. Therefore, Northern Plains is promoting opportunities that energy efficiency and renewable energy can offer to rural Montana.
We have significant wind and solar opportunity in Montana. Together with an aggressive energy efficiency program, wind and solar represent a viable alternative to coal in terms of employment opportunities, tax base, and a source of electricity. A recent report prepared for the Civil Society Institute outlines a plan to meet our nation’s energy demands by phasing out coal and increasing energy efficiency and renewable energy sources.
For more information:
The Hidden Costs of Coal: Coal ash factsheet
Civil Society Institute report: Toward a Sustainable Future (2011) A few key highlights of the report include:
- The steep health and environmental impacts (including water use) of coal-fired electricity would be eliminated by 2050 when all such facilities are retired.
- Construction and operation of the new power plants (geothermal, combined heat & power and solar) in the first decade would create roughly 3.1 million new job-years, which is the equivalent of 310,000 people employed for the entire decade.
- Natural gas use in 2050 would be reduced 28% from projected levels for 2050.
- Over $450 billion in health effects related to air pollution would be avoided, translating into roughly 55,000 fewer premature deaths.
For more information:
Otter Creek coal factsheet (reasons for not leasing the coal)
The Hidden Costs of Coal: Otter Creek coal tracts (impacts of the proposed mine)
Dr. Tom Powers’ report on the economics of leasing the Otter Creek coal tracts
www.heavytrafficahead.org Report on coal exports and rail traffic in the Northwest.
