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."

But coal has a terrible reputation. It's dirty, messy and pollutes the environment when it's burned. So how would this rancher-turned-politician change any of that? Schweitzer is also a soil scientist and said he's spent a lot of time studying the conversion of coal into synfuel.

"It works and it's clean," he said. "It's just that simple."

Scientists agree and said it's all in how the coal is processed.

The Fischer-Tropsch process entails "gasifying" coal. In simple terms, that means cooking the coal to 2,000 degrees. Because oxygen would be limited, the coal does not ignite. Instead, it chemically breaks down and gives off gas. In this case, the important gas is methane, which can be liquefied into diesel fuel.

The synthetic fuel also burns clean because it contains no sulfur, mercury or arsenic.

"This is the cleanest fuel you can burn in a vehicle," Schweitzer said, driving a state-owned pickup truck equipped to run on the synthetic fuel.

Robert Williams, a senior scientist at the Princeton Environmental Institute, said the synthetic fuels are cleaner.

"When you gasify coal as opposed to combusting it or burning it in air you remove the harmful air pollutant contaminants," he said. "The Fischer-Tropsch liquids are much cleaner because noxious materials like sulfur and mercury are removed from the synthetic gas before the gas is converted into a liquid."

But the Fischer-Tropsch process does create a lot of carbon dioxide, the chief pollutant responsible for global warming.

The governor said he'd pump it underground. Energy experts said it could then be used to squeeze oil from unproductive wells. Schweitzer's proposal would be to link into a pipeline that already exists between Colorado and Texas, which could be used to supply CO2 to the oil patches in those states.

That could be a boon to the domestic oil industry, some experts said.

"If you inject CO2 into these mature oil fields, you can get out another 8 to ultimately 15 percent more, Williams said. "If we had enough supplies of cheap CO2, we could increase the amount of oil that we get out of these mature fields for the next couple of decades by something like a factor of 20. So instead of 200,000 barrels of oil per day which is the current rate, we could extract as much as 4 million barrels of oil per day by means of this enhanced oil recovery operation."

While environmentalists generally like the idea because the synfuel is cleaner than traditional gasoline, not everyone here is onboard.

Opponents believe increased strip mining will scar the open prairie, foul the water and endanger the livelihoods of Montana's farmers and ranchers.

The Northern Plains Resource Council has fought coal for decades.

"All of us U.S. citizens need to understand there are no free lunches," said Tom Schneider, a petroleum engineer with the Northern Plains Resource Council. "And if you strip mine those areas, you disrupt a way of a life."

He says the mining would disrupt the region's groundwater and badly damage the area's aquifer.

But the governor has answered that complaint before and quickly assured anyone willing to listen that the mining would not go so deep that it would disturb the groundwater.

"The aquifer is about 200 feet below the surface, and we're able to find this coal at a much, much shallower depth," he said.

With Jag leading the way, we end up in the middle of a winter wheat field. It's not by accident.

"We have farmers planting on land that used to be a pit like this," he said. "We have cattle grazing on land that used to be a coal pit like this. This soil is as good as any soil in Montana, and it's all reclaimed."

The land we were standing on had been an open pit mine that was backfilled with top soil and planted with native grass. The governor said there's now a state law that requires mining companies to restore the land once the "black gold" has been removed.

The state of Montana just announced an agreement for construction of the first coal-to-liquid-fuel conversion plant. It's a big undertaking. Initial estimates place the cost at about $1.5 billion. For the governor's dream to be realized, 10 such plants would have to be built over the next decade.

Then again, Schweitzer has already defied skeptics by getting elected governor in the first place. It's the first public office he's held, and he's a Democrat in a solidly Republican state. But he insists energy self-sufficiency cuts across party lines.

"We can produce our own fuels, and we can do it cleaner than importing oil from foreign dictators," he said.

As we fly back to the state capital in Helena, with Jag tucked under the governor's seat, Schweitzer is still on a mission.

"See that?" he asked as he pointed out the window to a row of tall windmills. "Those windmills are generating electricity, and they're my pride and joy."

Coal is not the only alternative energy source in Montana. As far as the governor is concerned, Big Sky Country inspires big dreams.