Big Energy Dreams in Big Sky Country

COAL STRIP, Mont., Oct. 10, 2006 — -- Gov. Brian Schweitzer is on a mission.

"You see that black gold in the bottom of the pit?" he asks as we fly 2,000 feet above eastern Montana. "That's exposed coal."

If the governor has his way, that coal will solve America's dependence on imported oil.

Once on the ground, Schweitzer and his ever-present dog, Jag, lead us on a tour of open-pit coal mining. The rich black veins lie less than 20 feet below the surface.

Everywhere giant earth-moving equipment scoops up the coal and dumps it into a fleet of huge trucks. Equipped with tires measuring 8 feet tall, the giant transports each carry 200 tons of coal without pause. For now, some of the black gold fuels a power plant; the rest is shipped out of state.

Schweitzer's idea -- and it's a big idea even in Big Sky County -- is to convert the coal into liquid synthetic diesel fuel. The governor believes there's enough coal in Montana to make the United States independent of imported oil for the next 60 years.

It's not a new idea. In 1923, German researchers discovered a way to convert coal into synthetic gasoline, diesel and aviation fuel. Called the Fischer-Tropsch process, it was used by the Nazis to produce fuel for the Luftwaffe in World War II. South Africa used the same technique when the world refused to trade with the apartheid state.

"Plants 60 million years ago created this," Schweitzer said as he held up a chunk of coal. "And we're able to make this clean diesel fuel from it."

He holds up a vial of clear liquid. It looks like water and is virtually odorless.

"I call it Chanel No. 37," Schweitzer said, laughing.

Eastern Montana is a coal treasure trove. One-third of the nation's coal can be found here. That's 10 percent of the world's supply. But turning it into synthetic fuel has not been economically possible, until now.

"The break-even is about $35 a barrel," said Schweitzer. "Now that oil is trading at a much higher price, it's economically feasible to do this. We can produce diesel in Montana with Montana coal for about $1.18 a gallon. That's about half what you're buying it for right now."