In Mont. governor race, candidates vie to be coal’s champion

Source: Benjamin Storrow, E&E News reporter • Posted: Friday, November 4, 2016

Montana gubernatorial candidate Greg Gianforte (R) has visited the town of Colstrip six times in the last year. The community of 2,300 might seem like an odd place to mine for votes — but what Colstrip lacks in electoral heft, it makes up for in symbolic importance.

The eastern Montana prairie town is home to the second-largest coal-fired power plant west of the Mississippi River. And like most coal plants these days, its future is very much in doubt. Two of the plant’s four units are scheduled to shut down by 2022 (ClimateWire, April 12).

Gianforte, who is locked in a tight race with Democratic incumbent Steve Bullock, has positioned himself as a defender of the Colstrip power plant and, by extension, Montana’s coal industry. He excoriates Bullock, saying the governor has not done enough to defend the state from the Clean Power Plan, President Obama’s carbon-cutting regulations. The governor’s administration, Gianforte is fond of warning voters, is littered with environmental extremists.

“Unfortunately, we’ve seen outrageous federal overreach through the Clean Power Plan that will have catastrophic impact on Montana,” Gianforte told E&E News, pointing to a 2015 study from the University of Montana, which predicted the regulations could cost the state 7,100 jobs. “It’s prudent to plan for all eventualities, but I’m not giving up on Colstrip.”

In truth, both candidates are coal backers. Both support enhanced funding for carbon capture and sequestration research. Both say they want to streamline permitting for new projects. And both want to keep Colstrip’s four units operating.

Bullock has opposed the Clean Power Plan, questioned a federal proposal to overhaul the royalties that companies pay to mine on public land and pleaded with Washington Gov. Jay Inslee (D) to block his state’s utilities from cutting their ties to Colstrip. He says Gianforte lacks a plan for protecting Montana’s miners and power plant workers.

Heated rhetoric aside, the candidates’ similarities highlight an uncomfortable truth for a state with roughly a fourth of America’s unmined reserves: When it comes to coal, the decisions will largely be made elsewhere.

“We’re dependent on outside interests for these decisions,” said Jerry Johnson, a professor of political science at Montana State University. “I’m not sure we have a lot wiggle room.”

Montana accounts for roughly 4 percent of U.S. coal production, but its reserve base of 120 billion tons of recoverable coal is the largest in the nation. A long line of coal companies have proposed building new mines or expanding existing ones in hopes of reaching those reserves. But those projects’ fortunes are more closely linked to international thermal prices than who occupies the corner office in Helena.

In 2014, roughly a third of the state’s production was sent abroad, according to Headwaters Economics, a Bozeman-based think tank. Seaborne prices collapsed earlier this year, all but bringing thermal exports to a halt, though prices have rebound in recent months. Coal firms, already laboring to shed previous debts, have subsequently shelved or abandoned expansion plans.

Montana’s next governor will also have little say over the Clean Power Plan. The regulation’s legal fate and the outcome of the presidential election will be far more consequential in deciding if Montana has to comply with the emission cuts outlined in the plan.

Even so, the next governor will have to deal with the fallout of coal’s decline. While western Montana’s economy has posted solid growth in recent years, fueled by an infusion of telecommuters, eastern Montana remains highly reliant on resource extraction. Colstrip alone contributes roughly $100 million to state and local coffers annually.

The question is less can Montana save Colstrip and more how does the state manage its decline, said Mark Haggerty, an analyst at Headwaters.

“We think we need to have some kind of plan in place that the people who lose jobs have some access to opportunity that helps them move on and communities have resources to plan for their future,” he said.

Falling coal revenues have contributed to declining tax collections, but Montana is well-placed to ride out a downturn in the coal market, analysts said. Total coal revenues account for 2 percent of all state tax collections.

The political stakes are considerably higher. Colstrip allows Gianforte to paint the governor as an environmentalist beholden to Washington, D.C., said Lee Banville, a journalism professor at the University of Montana and longtime watcher of state politics. For Bullock, Colstrip presents more of a challenge. He must appear pro-coal without losing environmentalists who support regulations like the Clean Power Plan, Banville said.

All the positioning obscures a harder point: Whoever wins in November will be hard-pressed to deliver something more than symbolism to Colstrip.