Climate proposal calls for 21 percent Montana cut

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Billings, Mont. • A White House plan unveiled Monday to rein in climate change by reducing carbon dioxide pollution from power plants would have a magnified impact in coal-rich Montana, with consequences for both electricity generation and a mining industry that sits atop the largest coal reserves in the U.S.

The draft rules from the Environmental Protection Agency give states flexibility to decide how to meet their share of a nationwide 30 percent reduction in carbon dioxide from 2005 levels by 2030.

For Montana, where some reductions already have occurred, emissions would have to be cut an additional 21 percent from recent levels.

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POLITICS OF COAL

Supporters said the reductions were needed to stave off rising temperatures that are spurring more forest fires, depleting rivers and leading to drought. They touted potential spin-off benefits to agriculture and tourism and for public health, from reductions in soot and smog pollution that is blamed for respiratory problems in children and some adults.

U.S. Sen. Jon Tester called it a "responsible proposal."

"Agriculture and outdoor recreation power Montana's economy. From floods to fires to beetle-killed trees, we know the consequences of the changing climate," said Tester, a Montana Democrat. "State-based solutions that reduce the effects of climate change will keep these industries strong."

Critics including U.S. Rep. Steve Daines warned the new rules could drive up electricity prices — an assertion disputed by the administration. Daines said in a statement that Monday's announcement revealed the Obama administration's "disregard" for those who work for the coal industry.

"Montanans know firsthand the damage that results from these shortsighted policies," the Republican said.

Daine's potential Democratic opponent in the fall election, Montana U.S. Sen. John Walsh, said "appropriate action" was needed. But Walsh stopped short of an explicit endorsement and said the policy must work for Montana.

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WORLD-CLASS COAL RESOURCES

Montana leads U.S. states in coal supplies with an estimated 120 billion tons in reserves, according to the Energy Information Administration. That's enough to supply the entire country's coal needs for more than a century based on current consumption levels.

The state ranks seventh in the nation in coal production. Its six major mines produced a total of 42 million tons of coal in 2013. It's also home to the second largest coal-fired power plant west of the Mississippi, the 2,100-megawatt Colstrip plant.

Efforts to increase production are underway in the Powder River Basin in southeast Montana along the Wyoming border, where new mines are proposed by Cloud Peak Energy and Arch Coal, Inc.

Both of those projects are aimed at overseas markets, as the companies try to offset declining coal demand in the U.S.

Coal production nationwide has dropped by about 16 percent since peaking in 2007. Exports roughly doubled in that same period, to roughly 117 million tons last year, but still account for just one-tenth of total U.S. coal output.

It's uncertain what impacts Monday's announcement could have on exports.

STATE FLEXIBILITY

Montana already is part way to meeting its reduction goal under a 2005 law that required 15 percent of the state's electricity to come from renewable energy sources by 2015.

States have until 2017 to come up with their own emission reductions plans and until 2018 if they partner with other states.

A spokesman for Colstrip's operator, David Hoffman with PPL Montana, it's too early to know how the new rules will play out. He said impacts to the 360-employee plant likely are unavoidable.

"We hope that whatever targets are in there are achievable based on proven and available technology," Hoffman said. He added that it was important to maintain diverse sources of power including coal to ensure the reliability of the electricity grid is not compromised.

Montana Gov. Steve Bullock said his staff would be reviewing the new rules carefully. He wants to make sure they allow the state to adopt what the Democratic governor called "a made-in-Montana solution."