MONTANAS ENERGY RESOURCES

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MONTANAS ENERGY RESOURCES

• Susan Ockert
• Senior Research Economist

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MONTANAS ENERGY
NLC
COE
BOR
Hungry Horse Dam
A
TM
PC
COE
Noxon
SKT
PPL
MDU
PPL
Kerr Dam
All PPL
MVP
MDU
PPL
PPL
BOR
QF
?
MDU
PPL, PSP, A, PGE, NWE
Colstrip (4)
CP
PPL
QF
PPL
QF
BOR
PPL
QF
Power sent out of Montana
Refinery
Sources listed on last page
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MONTANA ENERGY

• 1st in coal resources and reserves with nearly
  120 billion tons
• 6th largest producer of coal
• 5th in nation for wind energy potential
• 8th in oil wells drilled (2003)
• 10th in natural gas wells drilled (2003)
• 12th in daily production of crude oil (2003)
• 13th in installed wind energy capacity (2005)
  (26th in 2004)
• Coal represents 73 of all rail tonnage, 53 goes
  to Minnesota Wisconsin
• Only 5 of Montana crude oil is refined in
  Montana

Coal Big Horn 67 Rosebud 32
Electric Power Colstrip (4) 44 Libby
10 Avista 9 Hungry Horse
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Oil Gas Production Tax Richland 25 16.5
mil Fallon 23 15.1 mil Blaine 6
4.2 mil Phillips 4 4.1 mil
North Central Natural Gas 52 Oil Gas Tax
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Natural Gas Fallon 22 Phillips 17 Hill
13 Blaine 12 Big Horn
11 Richland 10
All power sent out of MT
Eastern Montana Oil 94 Natural Gas
36 Oil Gas Tax 67
Oil Richland 55 Fallon 23
Refining Capacity Yellowstone 95 Cascade
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Sources and Power Company abbreviations listed on
last page
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MONTANAS NATURAL GAS PIPELINE SYSTEM
HAVRE PIPELINE
Cut Bank
Havre
Blaine County 1
Kalispell
Glasgow
Blaine County 2
Big Sandy
Sidney
Wolf Point
Missoula
Great Falls
Lewistown
Glendive
NWEs Gas Transmission System
Helena
Morel
Hamilton
Miles City
Anaconda
Butte
Williston Basin Interstate/Warren (WBI) pipeline
Billings
Silver Bow Generation
Bozeman
Natural Gas
Dillon
NOTE Map not drawn to scale
Sources listed on page 5
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Montanas Natural Gas

• Montana produces more natural gas than it
  consumes
• Produce 86.1billion cubic feet (bcf)
• Consume 69.6 bcf
• 52 of natural gas production in north-central
  Montana and 36 in eastern Montana
• 3 distribution utilities and 2 transmission
  pipelines handle 99 of MT gas consumed
• NorthWestern (NWE) 60 of all natural gas sales
  in Montana, including 2 refineries in Billings
  uses own pipeline system
• Montana-Dakota Utilities 25-30 of all natural
  gas sales- covers eastern Montana uses
  Williston Basin Interstate/Warren pipeline
• Energy West 11-13 of all sales, provides gas
  to Great Falls area and uses NWEs pipeline

Source Montana Department of Environmental
Quality, Report to Environmental Quality
Committee, Montana State Legislature,
Understanding Energy in Montana, October 2004.
www.leg.mt.gov Williston Basin Interstate
Pipeline Company www.wbip.com/wbip_profile.html
American Gas Association www.aga.org U.S.
Department of Energy, Energy Information
Administration, www.eia.doe.gov.
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Petroleum Pipelines in Montana
Oil
Refinery
12th in Daily Production of Crude Oil - 2003

Sources listed on page 7
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Montana Petroleum

• 90 of Montana Petroleum exported to Wyoming and
  eastern pipeline system
• Eastern pipeline system is not connected to
  Montanas 4 refineries
• Less than 5 of Montana oil used in Montana
  refineries
• 75 from Alberta, Canada
• 20 from Wyoming
• Refinery capacity (barrels per day)
• Conoco Phillips - 58,000 and ExxonMobil - 60,000
  (Billings)
• Cenex - 55,000 (Laurel)
• Montana Refinery - 8,200 (Great Falls)

Source Montana Department of Environmental
Quality, Report to Environmental Quality
Committee, Montana State Legislature,
Understanding Energy in Montana, October 2004.
www.leg.mt.gov U.S. Department of Energy, Energy
Information Administration, www.eia.doe.gov.
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Insufficient and Aging
Kalispell - Plum Creek
Laurel ConocoPhillips Pipeline CHS Inc (Cenex)
Refinery
Missoula - Smurfit-Stone - Roseburg Forest
Products
Billings - ConocoPhillips - ExxonMobil
Clancy - Ash Grove Cement
Three Forks Holcim
Butte ASiMI
Whitehall - Golden Sunlight
Nye Stillwater Mining
Jefferson City - Montana Tunnels
Western Connection 93 of load, 98 of
electricity generatedEastern Connection 7 of
load, 2 of electricity generated
Generation Capability - 5,100 MWAverage
Generation - 3,000 aMWAverage Load
- 1,600 aMW
Sources listed on page 9
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Large Electricity Users (MW)
Source Montana Department of Environmental
Quality, Report to Environmental Quality
Committee, Montana State Legislature,
Understanding Energy in Montana, October 2004.
www.leg.mt.gov
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Transmission System

• Western Governors Association (WGA)
• Rocky Mountain Transmission Study (RMATS)
• Federal Energy Regulatory Commission (FERC)
• Bonneville Power Administration (BPA)
• Bureau of Land Management (BLM)
• Western Area Power Administration (WAPA)
• Great Northern Power Development (GNPD)
• PacifiCorp (PAC)
• Composite Power Corp. (CPC)
• Montana Environmental Information Center (MEIC)
• Montana Alberta Tie Ltd (MATL)
• Frontier Line

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Energy and Montana

• Oil and Gas
• Renewable
• Wind

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Oil Production in Montana
Barrels
Price per barrel
Oil production
2005 Katrina

• Events Impacting Oil
• OPEC 1960
• Yom Kipper War 1973
• Iraq invades Iran - 1980

1998 Asian Crisis
9/11
2003 U.S. invades Iraq
1990 Iraq invades Kuwait
Price per barrel
Source U.S. Department of Energy, Energy
Information Administration, International
Petroleum Prices. WTRG Economics, History of
Oil Prices, www.wtrg.com
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Oil and Gas Industry 2004
Source Independent Petroleum Association of
America, www.ipaa.org U.S. Department of Labor,
Bureau of Labor Statistics, Quarterly Census of
Wages and Employment, www.bls.gov
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Oil and Gas Impacts
Source IMPLAN, www.IMPLAN.com
Source Montana Department of Revenue, Biennial
Report, July 1, 2002 to June 30, 2004,
mt.gov/revenue/formsandresources/biennialreports/
biennialreports.asp
Source Effective Tax Rate, 2004, Montana
Department of Revenue, Biennial Report, July 1,
2002 to June 30, 2004, mt.gov/revenue/formsandres
ources/biennialreports/biennialreports.asp
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WIND POTENTIAL

• Rankings
• 5th in wind potential
• 26th in 2004
• 13th in 2005

SourceU.S. Department of Energy, National
Renewable Energy Lab Jobs, www.nrel.gov
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Wind Farm Construction Phase
Local Material
Local Services/Labor

• Cranes
• Concrete
• Cable
• Rebar
• Poles
• Fuel and lubricants
• Restaurants
• Hotels

• Moving towers and blades
• Excavation of turbine foundations
• Digging trenches for cable
• Poring concrete
• Build roads between turbines
• Build power substation

Sources U.S. Department of Energy, Energy
Efficienty and Renewable Energy,
www.eere.energy.gov Great Falls Tribune, Wind
Energy Projects Dot Horizon, April 10, 2006
Billings Gazette, Ropin the Wind Judith Gap
Wind Farm to tap Montanas Invisible Resource,
July 7, 2005 The Prairie Star, Judith Gap Wind
Farm not affecting grazing sheep, March 30, 2006
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Valley County

• 334 Turbines to produce 500 MW
• 4 phases
• 20,120 acres
• 6,889 private
• 11,279 public managed by BLM
• 1,953 School Trust Lands

Source Montana Department of Natural Resources,
Trust Land Management Division,
dnrc.mt.gov/trust/wind/valley_county.asp
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Economic Impacts
Source Wind Hunter Project Highlights
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Potential Tax Impacts
Taxes are collected annually
School Trust money depends on when turbines are
put on the land. School trust land will host 43
turbines.
Source National Renewable Energy Lab Jobs,
Economic Development and Impacts Model (JEDI),
www.nrel.gov Wind Hunter Project Highlights
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Preparing for New Energy Plant
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• Finance
• Venture Capital
• Loans

• Construction
• Electricians
• Boilermaker
• Welders

• Operation
• Engineers
• Operation Managers

• Distribution
• Transmission Lines
• Substations

• Infrastructure
• Roads
• Water
• Rail
• Telecommunications

• Training/Education
• Skilled Labor
• High School
• 2-year college
• 4-year college

POWER PLANT

• Living Arrangements
• Housing
• Schools for children
• Work for spouse
• Shopping
• Food
• Clothing

• Amenities
• Restaurants
• Recreation
• Entertainment

• Support Businesses
• Equipment
• Materials
• Tools
• Parts

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Summary

• Energy generation is economic engine
• (Rural) Montana has abundance of energy resources
• Major constraint is insufficient and aging
  transmission system
• Environmental issues
• Need comprehensive planning

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Contact Information

• Susan Ockert
• Senior Research Economist
• [phone]
• sockert_at_mt.gov
• www.ceic.mt.gov

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• Sources
• Montana Department of Natural Resources and
  Conservation, www.bogc.dnrc.state.mt.us/OnlineData
  .htm
• U.S. Department of Energy, Energy Information
  Administration, www.eia.doe.gov
• Montana Coal Council, www.montanacoalcouncil.com
• Montana State Legislature, Understanding Energy
  in Montana, October 2004
• U. S. Army Corps of Engineers, www.nwo.usace.army.
  mil
• U.S. Bureau of Reclamation, www.usbr.gov
• American Wind Energy Association, www.awea.org
• U.S. Department of Energy, Pacific Northwest
  Laboratory Study
• Renewable Northwest Project, www.rnp.org
• R. L. Banks Associates, Inc, Rail Freight
  Competition Study As Provided by Montana Senate
  Bill 315, Oct 2004
• Independent Petroleum Association of America,
  July 2005, www.ipaa.org
• Montana Department of Revenue, Office of Tax
  Policy and Research