Primary Petroleum Completes Teton Prospect

MONTANA, Dec 28 (Neo Natura) - Calgary-based exploration and production firm Primary Petroleum has completed its review of the 3D seismic data processing and interpretation on its Teton prospect in Montana, and has initially selected 12 drilling locations to commence its drilling program.

The company has contracted FX Drilling Company from Oilmont, Montana, for an eight well drilling program, which is scheduled to commence in January 2008.

The Teton prospect covers some 97,400 net acres and is offset to the Gypsy basin which has claimed to have produced over 510,000 barrels of oil from 1280 net acres, to date.

The company said that the key targets for these multi-zone wells are the Madison oil and Sunburst gas formations. The current royalty rate on Primary Petroleum's land in Montana is 12.5%.

More Camelina For Biodiesel

MONTANA, Dec 19 (Neo Natura) - Montana’s newest oilseed crop, camelina, may get a big boost this coming year from two joint ventures announced this fall to develop the crop for biodiesel production.

Montana-based Great Plains Oil and Exploration-The Camelina Co. conducted a series of grower meetings across the state's northern-tier counties in the fall. The company is hoping to recruit growers to expand camelina acres for its new partnerships. In August, Great Plains announced a partnership with INEOS Enterprises, a U.K. manufacturer of specialty chemicals and oil products. The partnership seeks to boost the production of camelina in the state's, Canada and the Pacific Northwest to 100,000 acres. INEOS Enterprises currently has a French plant that crushes more than 100,000 tons of rapeseed each year for the fuel and chemical market. Its Web site indicates plans to dramatically increase its European biodiesel production. Great Plains also has a partnership with Ohio-based Peter Cremer North America LP to supply camelina for the company’s Nexsol brand of biodiesel. Great Plains said it is willing to contract all the camelina acres that Montana growers are willing to plant. In addition, 2007 growers were offered the opportunity to plant up to 50 acres in the fall for harvest in the early summer of 2008 to test the plant’s winter hardiness.

In a separate project, Sustainable Oils Inc. was formed in late November through a joint venture between Seattle-based Targeted Growth Inc. and Houston-based Green Earth Fuels LLC. The new company aims to produce 100 million gallons of camelina-based biodiesel by 2010 in a U.S. location yet to be determined. Targeted Growth is a crop development firm working in the United States and Canada to improve biofuel crops including soybeans, canola and, most recently, camelina. It plans to sell its new camelina seed variety to farmers through Western State Breeders Inc. in Bozeman, Mont. Green Earth operates a 90 MMgy multi-feedstock biodiesel facility in the Galena Park Liquids Terminal owned by Kinder Morgan Energy Partners LP on Houston’s ship canal.

NWE Hikes Utility Rates

MONTANA, Dec 19 (Neo Natura) - State regulators Tuesday granted a temporary 2 percent rate increase for NorthWestern Energy electric-and-gas customers - and it could be permanent by next spring.

The increase, effective Jan. 1, comes on the heels of a proposed agreement by NorthWestern and the state Consumer Counsel to support a permanent 2 percent increase, which would be the first hike in the company's electric and gas delivery rates in nearly eight years. The state Public Service Commission, which approved the temporary rate increase on a 4-1 vote, also scheduled a February hearing on the request to make it permanent.

The 2 percent, $15 million annual increase is about two-thirds less than the amount requested by NorthWestern five months ago.

Under the increase, the average residential customer will pay about $18 more a year for electricity and $25 a year more for natural gas. NorthWestern serves 320,000 customers, most of which are in central and western Montana.

Members of Montana's Public Service Commission say that they want to take a closer look at the rate deal NorthWestern Energy has cut with consumer advocates. The PSC decided on Tuesday to seek more information on the agreement which was reached between the utility and the Montana Consumer Counsel.

Commissioner Brad Molnar, R-Laurel, was the sole commissioner Tuesday to vote against the temporary rate increase.

Molnar said later that NorthWestern already charges the highest delivery rates in the region for natural gas, and that he sees no justification for the high price or an increase.

Molnar also said there's no need to grant NorthWestern a temporary rate increase, because the commission will consider the permanent increase in a couple of months. Approving an increase now amounts to a “piecemeal” approach to rate-making, he said.

Staffers for the PSC pointed out that the Consumer Counsel agreed that the company needs the temporary increase. They also said such increases often take effect while the commission considers an overall rate-change request.

“What it is doing is providing relief for the company,” said Al Brogan, staff attorney for the PSC, noting that NorthWestern faces many inflationary costs.

The increase is in the rates that NorthWestern charges customers to deliver natural gas and electricity to their homes or businesses. Customers pay an additional price for the actual power or natural gas, tied to prices on commodities markets.

The 2 percent increase is on the total price customers pay for the energy and its delivery.

The actual increase that NorthWestern will receive for its delivery rates is higher:

4.7 percent on electricity and 5.4 percent on natural gas.

In July, NorthWestern initially asked for a $42 million increase in electric and gas rates, or 6.6 percent on electricity and about 4 percent on natural gas.

The Consumer Counsel and NorthWestern agreed to support the lower rate in a proposal filed with the PSC on Dec. 7. Consumer Counsel Bob Nelson said the agreement is good for consumers, and NorthWestern said it wanted to avoid a long, contested battle over its rate request.

If the Public Service Commission eventually adopts the agreement, the case would not be complete.

The commission, NorthWestern and others still would have to settle the “rate design,” which is how the increase will be allocated among different types of customers, such as homeowners, business and industrial consumers.

The proposed rate deal includes a promise from the company to provide to customers 21 megawatts of electricity from its Colstrip plant at below-market rates for consumers, for 6 1/2 years.

Eric Eck, chief of utility revenue requirements for the PSC, said Tuesday the below-market power is “an incredible benefit” for customers.

Behind Montana's Natural Gas Usage

MONTANA, Dec 10 (Neo Natura) - Alberta provides the largest supply of natural gas for Montana customers and will likely continue to do so in the years to come. The reason for this is our proximity to Alberta’s large gas reserves. The next largest supply for Montana is from in-state wells mostly located in the north-central portion of the state. Supplies from the other Rocky Mountain states represent a small portion of total in-state usage and continue to decline from historic levels. Future changes in supplies from in-state development and from other Rocky Mountain states are uncertain at this point. Coal bed methane may eventually increase the portion of gas used in Montana that comes from Rocky Mountain states, but the peak of that production is still a few years off.

Montana currently produces more gas than it consumes. In 2002, Montana produced 86.1 billion cubic feet (bcf) and consumed 69.6 bcf (Tables NG1 and NG2). The bulk of what Montana produces is exported, and the bulk of what Montana consumes is imported. In 1999, for example, Montana produced 61.2 bcf of gas and exported 51.8 bcf total to North Dakota, South Dakota and the Midwest. The reasons for this are the way in which natural gas utilities structure their gas purchasing contracts and the configuration of gas pipelines in Montana.

Most gas produced in Montana comes from the north-central portion of the state. In 2002, the north-central portion accounted for 71% of total production and the northeastern portion of the state accounted for 15% (MBOGC 2003). In-state gas production has been increasing in recent years (Figure 1, below). The south-central and northeastern portions have greatly increased their production level since 1998, resulting in most of the recent statewide increase (MBOGC 2003). Because most gas is exported, increases or decreases in natural gas production in Montana likely have little impact on Montana natural gas consumers.

Coal bed methane development in Montana has not yet become significant, due in part to difficult environmental issues. Some residents in Montana have forcefully opposed methane Connection with Electric Generation Page 2 III-2 development, especially in or near the Powder River Basin. However, with the Montana Environmental Impact Statement completed and released to the public in the fall of 2003, in-state development is expected to increase in the near future. The total amount of methane development that will occur in Montana is yet to be determined. The future extraction of other known gas reserves along Montana’s Rocky Mountain Front likewise is uncertain at this point

ConocoPhillips to Expand Montana Refinery

MONTANA, Dec 6 (Neo Natura) - ConocoPhillips is interested in increasing the capacity of its refinery in Billings, Mont., by 16 percent, a state official says.

Jim Hughes, a specialist with the Montana Department of Environmental Quality, said officials from the company met with him Wednesday to discuss the project, which would raise the plant's maximum operating capacity to 71,000 barrels a day from 61,000 currently.

"They're going to change out their old crude unit and replace it with a new unit," Hughes told Bloomberg News.

Hughes said ConocoPhillips officials told him they plan to submit permit applications for the expansion by the end of February. The project would be completed in 2011.

Houston-based ConocoPhillips had no comment.

The Billings refinery is the second-largest in Montana, behind Exxon Mobil's facility in Billings.

Border Dispute May Turn International

MONTANA, Nov 27 (Neo Natura) - International law could bolster the state of Montana’s position in a coal mining dispute with Canada, and tying the controversy to broader environmental concerns might provide the forum for much-needed “quiet diplomacy” on the issue.

That’s the opinion of two recent visitors from British Columbia, an activist and an expert in international water law, who came to Whitefish this week to address the Flathead Coalition. The coalition has long been concerned with British Columbia’s coal and coalbed methane proposals north of Glacier National Park.

“As with all legal matters, there are different opinions,” said Richard Paisley. “But from my perspective, I see what’s coming down from B.C. as violating the standards of international law.”

In Montana, the flathead river corridor enjoys some of the nation’s most stringent environmental protections, and downstream interests worry Canadian energy development could harm fish, wildlife and water quality south of the border.

Recently, Chloe O’Loughlin said, Canadians likewise have been stirring in opposition to the proposals, as increased media attention in British Columbia has put the issue on the political table.

O’Loughlin is executive director of British Columbia’s chapter of the Canadian Parks and Wilderness Society, and with Paisley and other Canadians traveled south to address the Flathead Coalition this week.

“British Columbia’s government is recognizing it needs to fix the Flathead issue,” she said, “before it can enter into any more complex discussions.”

Montana Joins Cap-And-Trade Initiative

MONTANA, Nov 27 (Neo Natura) - Montana is aligning with California and Utah to join a "cap and trade" initiative due to federal slacking.

That lack of leadership from the White House has led states to act unilaterally. Governors are signing regional agreements to cap greenhouse gas emissions. California, Montana and Utah signed one last week. Fourteen states have adopted California's tough tailpipe emissions standards. Yet, approval from the Environmental Protection Agency has been two years in coming -- if it comes at all. Court cases from federal district courts right up to the Supreme Court have beaten back challenges to states' proactive policies.

The washington post writes:

"This [clean energy] sector could be the largest economic opportunity of the 21st century," says John Doerr, a prominent venture capitalist whose firm nurtured many of the iconic companies of the computer and Internet revolutions, from Netscape to Google. "The Internet and its effect on the economy and our lives pale in comparison."

More and more institutions are moving to seize those opportunities -- and respond to the threats that climate change poses. Consider the developments in just the past two weeks.

Six Midwestern states (and one Canadian province) last week signed a regional accord imposing mandatory reductions on carbon dioxide and the other emissions linked to global warming through a market-based "cap-and-trade" system. That approach establishes binding limits on greenhouse gas emissions, but seeks the most efficient reductions by allowing industry to trade credits for the right to pollute.

World Heritage Sites Under Threat

MONTANA, Nov 21 (Neo Natura) - The following is an article released by the AFP on November 19th. It highlights the continuing fight Montana has been taking against Canada to stop industrial development on the national border.

VANCOUVER, Canada (AFP) — Two ambitious energy exploration projects in western Canada are raising fears among US environmentalists of irreversible ecological damage to a pristine expanse of the famed Rocky Mountains.

The rugged northwestern US state of Montana is hoping to convince the Canadian province of British Columbia to abandon proposals to explore for coal and natural gas in the Flathead valley -- an expansive, mountainous region shared by Canada and its southern neighbor the United States.

On the American side of the valley lies the famous Glacier National Park, while the Canadian section forms the Waterton Lakes National Park.

Together, they comprise the Waterton-Glacier International Peace Park, which is listed by the United Nations Educational Scientific and Cultural Organization (UNESCO) as one of its world heritage site.

Both the Canadian and US parks also have been declared by UNESCO to be Biosphere Reserves. World heritage sites are said to have outstanding cultural or natural importance to the common heritage of all humankind.

Critics also say the mining project runs the risk of spoiling the pristine waters and fragile ecosystem of parks on both the Canadian and US sides of the Rocky Mountains, which have come to symbolize peace and friendship between the two countries.

Chief among environmentalists' concerns are the impact on the area's abundant wildlife, including lynx, wolves and especially grizzly bears, whose mating habits could be adversely impacted by the noisy and intrusive mining equipment.

Scientists worry about the release of nitrate, selenium and harmful sediments which have proven harmful to the reproduction of some fish species in the United States.

Canadian authorities have assured officials in Montana that exhaustive efforts will be taken to ensure that the ecological wonderland on their shared border remains unspoiled.

"We've been assured that the environmental processes are equal to ours. But let's be frank, we are not convinced," said Hal Harper, chief policy adviser to the governor of Montana.

Both energy exploration projects are in the initial application stage, as officials seek construction permits. The outdoor mining project is being led by Cline Mining Corporation, while the methane gas project is being led by oil giant British Petroleum (BP).

BP, for one, insists however that US environmental interests have nothing to fear.

"We will not be putting sediments into the streams," said Christopher Revington, vice-president of coal-bed methane at BP Canada, who said new technology allowed his company to extract the gas while minimizing the environmental impact of the planned 1,500 wells.

Environmentalists, however, are not convinced.

They are fearful that a forest of new gas ducts and an expansive network of roads to allow the transport of more coal, equipment and workers will wreak potentially dire ecological consequences.

Already in 1988, an international commission charged with resolving such cross borders disputes concluded that British Columbia should abandon a mining project on the Canadian-US border deemed too polluting.

But those in favor of the energy exploitation projects point out that there are already some 250 kilometer of roads in the valley.

John van Dongen, British Columbia's Minister of State for Intergovernmental Relations told AFP in a written statement that the concerns are overblown, and that the plans for the new development are in keeping with what has occurred in the past.

"Historically, this region has been an area of economic activity, particularly forestry," he said.

Protesting Coal

MONTANA, Nov 20 (Neo Natura) - On October 22nd a demonstration occurred outside the University of Montana to protest the proposed construction of 11 new coal plants. The rally took place before NASA's top climate change scientist, James Hansen, took the stage for a speech.

The anti-coal rally was attended by about 70-100 people, many holding protest signs, and featured speakers from Missoula-based environmental groups such as GlobalWarmingSolution.org, members of national groups such as Greenpeace and the Sierra Club, and local politicians. Their main objection to clean coal? It doesn’t exist, they say.

“There is no such thing as clean coal,” said regional director of the Sierra Club Paul Shively, before he urged audience members to call their congressmen demanding a moratorium on coal.

State Rep. Betsy Hands (D-Missoula) spoke about a recent bill – a bill that would reduce Montana’s carbon emissions to 1990 levels by 2020 – that was voted down in the House along partisan lines (51-49).

The basic premise behind making coal clean, or carbon neutral, is that if coal is converted to synthetic fuel by a certain process known as the Fischer-Tropsch process its polluting impurities are removed. The CO2 that is emitted during processing is caught in a process called carbon sequestration and stored, thus never reaching the atmosphere and not contributing to global warming.

Many of the critics of clean coal say that carbon sequestration technology has not been perfected and that some CO2 will still reach the atmosphere during processing. Many critics also see coal extraction as inherently destructive to the natural environment.

The topic of coal-as-fuel featured prominently in the lecture by top NASA climate scientist James Hansen, which was held following the rally in the packed University Center ballroom.

New Biodiesel Facility Proposed

MONTANA, Nov 20 (Neo Natura) - Two companies from Houston and Seattle are joining forces to build a 100 million-gallon biodiesel manufacturing facility in Montana.

It will be the largest biodiesel plant in the nation to be fueled from Camelina feedstock, a distant relative to Canola that can grow on marginal land with minimal water or fertilizer.

Houston-based Green Earth Fuels LLC and Seattle-based Targeted Growth Inc. announced the formation of its joint venture, Sustainable Oils Inc., at a press conference in Helena on Tuesday.

Targeted Growth, an agricultural bioscience firm that focuses on renewable energy, has been working on developing a Camelina seed that will thrive in Montana's climate and make a good feedstock. Almost all of the initial feedstock will be grown in Montana.

"We have created a better feedstock for biodiesel," said Tom Todaro, chief executive officer of Targeted Growth. "Camelina can be rotated with current Montana crops, it grows in land with lower agricultural value, and it doesn't significantly increase the use of fertilizer or irrigation water. We think this will be a model for the development and use of other biofuel-specific crops."

After it opened one of America's largest biodiesel plants earlier this month in Houston, privately owned Green Earth Fuels was a logical choice to usher in the Montana facility.

"This deal allows us access to a high-quality feedstock at an extraordinarily competitive price," said Green Earth CEO Greg Bafalis. "There's an advantage to being vertically integrated -- it closely aligns our interests with those of our feedstock suppliers. And because Camelina exists outside of the traditional commodity market, it should not be as volatile as other feedstocks."

Gov. Schweitzer Calls For Energy Conservation

MONTANA, Nov 20 (Neo Natura) - At a news conference yesterday, Montana Governor Brian Schweitzer announced a new initiative seeking a 20% reduction in energy consumption by state agencies by the year 2010. He also discussed the climate change report presented to him today by the Director of the Department of Environmental Quality Richard Opper and announced that Montana has joined the Western Climate Initiative.

"Climate change is serious and Montana should lead by example," said Governor Schweitzer. "By setting a goal and working toward it, we can become leaders in addressing climate change. I would like to thank Director Richard Opper, DEQ staff and the members of the Climate Change Advisory Committee for their hard work on the report."

"Every agency will get to the goal in its own way," said Governor Schweitzer. "I have confidence that they will get there and I hope folks across the state will join the effort in their communities as well. This is not only the right thing to do but it also has huge cost saving potential for the taxpayers. This makes government more efficient."

While much of the reduction will come from a reduction in the use of utilities, Governor Schweitzer is also asking agencies to apply a Montana CAFE (corporate average fuel economy) standard and move state vehicle fleets to achieve an average of 30 miles per gallon or better. "With the exception of industrial vehicles and pickups needed for state work, many of the vehicles in the state fleet could be more efficient."

Governor Schweitzer also encouraged schools, universities, business and communities to join in the effort, saying "Montana will lead by example and Montana will make a difference."

Governor Schweitzer was also presented the Climate Change Report [pdf] today. The report was put together by the Climate Change Advisory Committee.

"I want to thank all the folks who worked so hard on this report," said Governor Schweitzer. "It is a monumental task to look at all the avenues and the council did an excellent job."

Here are some of the 54 recommendations made by the committee:

• Requiring that utilities in Montana include at least 25 percent of “renewable” energy in the electricity they sell by 2025.
• Montana should advocate for a national carbon tax or “cap-and-trade” system that limits industrial greenhouse gas emissions - either of which would create economic incentives to consume less fossil fuels.
• Montana should continue to offer incentives to develop clean energy in the state, such as tax credits.
• Implement greenhouse gas emission standards for major producers, such as power plants. However, the panel said the state should “consider a long-term phase-in” for such standards, to make sure the technology is available and that electricity supply won't be unduly affected.
• Require that any coal-to-liquid refineries constructed in Montana meet standards for emitting greenhouse gases, and that fuel produced from coal ultimately have emissions that are less than other fuels.
• Implement a widespread consumer-education program on energy efficiency and how consumers and businesses can cut energy consumption.
• Adopt “clean car” standards for light-duty vehicles to reduce smog- and soot-forming pollutants.
• Implement energy-efficient building codes in Montana that further reduce the consumption of fossil fuels.
• Increase the acres of cropland using “best management practices,” including conservation/no-tillage, to increase the level of organic carbon in the soil.
• Increase production of crops that can be converted to biodiesel fuel to the point that by 2020, 20 percent of the diesel fuel consumed is biodiesel.
• Expand the forestland base in Montana to absorb more carbon, in part by restocking forests that have been destroyed by fire.

Schweitzer said he has not been able to read all of the detailed items in the report, or decide which ones he can advocate.

Industry representatives on the panel took issue with some of the recommendations, saying they need more study before they are implemented. They said the costs to consumers of reducing carbon output in the state's electricity supply could be significant.

The group, in a letter to the governor, said the overall emissions goal may not be technologically or economically feasible.

"We should not set targets without a solid understanding of the potential to achieve them or the consequences to the state's economy," representatives of PPL Montana, Southern Montana Electric and Nance Petroleum wrote. All three sat on the global warming committee.

They also said there is no technology available to capture 90 percent of the carbon from new coal-fire power plants, as advocated by the panel.

Governor Schweitzer also announced that Montana will be joining the Western Climate Initiative. The Western Climate Initiative is a collaboration launched in February 2007 between the Governors of several western states to meet regional challenges raised by climate change. WCI is identifying, evaluating and implementing collective and cooperative ways to reduce greenhouse gas emissions in the region.

Pros and Cons of Oil

MONTANA, Nov 19 (Neo Natura) - The following is an excerpt from an November 18th article written by John Cramer of the Missoulian discussing the pros and cons of future petroleum drilling in Montana.

Much of Montana's Rocky Mountain Front, a wilderness largely unchanged since Lewis and Clark's expedition, was protected from energy development last year after a high-profile push by citizens and legislators.

Many of Montana's other prairies, peaks and watersheds, though, have proved to be gushers for the oil and natural gas industry as it expands its search for more domestic energy sources.

Their next shot at reserving some of the state's fossil fuels comes Nov. 27, when the federal Bureau of Land Management hosts another round of bidding in a drilling expansion that's producing record amounts of revenue in the Big Sky state.

But those profits may be coming at a cost.

Early studies show that petroleum development is threatening habitat for many native species, including antelope, sage grouse, mule deer, elk, burrowing owls, pallid sturgeon and westslope cutthroat, rainbow and brown trout.

Some of those species have healthy populations statewide, but their numbers are declining in areas close to oil and gas wellheads, roads, pipelines, power lines and other energy infrastructure, said T.O. Smith, energy coordinator for Montana Fish, Wildlife and Parks.

“It's an urban development built in a short period in rural areas,” Smith said. “There's no way you can have that kind of intense development and not damage the fish and wildlife habitat nearby. But there are ways to mitigate the damage. That's why we try to look at the landscape comprehensively.”

David Dobkin, executive director of the High Desert Ecological Research Institute in Bend, Ore., said the drilling boom has overwhelmed the BLM, leaving it incapable of monitoring drilling sites and their impact on wildlife.

“It's clearly a formula for implosion,” Dobkin said. If oversight isn't dramatically increased, Montana “could easily become another Wyoming,” where gas development is wiping out vast stretches of sage grouse habitat.

In western Montana, many areas are protected from drilling by national park and wilderness designations, but energy companies have proposed adding thousands of new wells covering hundreds of square miles on federal, state and privately owned land in central and eastern Montana. And on the west side of the Continental Divide, drilling has been approved from near Glacier National Park to Beaverhead County in the state's northwestern and southwestern corners, respectively.

Across the West, the oil and gas boom continues to worry conservation groups and others who say it's harming wildlife habitat, fishing streams, hunting grounds, Native American tribal sites and public health in exchange for only enough petroleum to meet national consumption for a few months.

They maintain that the Bush administration should focus on energy efficiency, conservation and renewable power rather than drilling without adequate environmental review and public input.

“It's a broken system and we don't want Montana to make the mistakes Wyoming did,” said Bruce Farling, executive director of Montana Trout Unlimited.

Industry officials and the BLM, which oversees most drilling in the West, say underground exploration can occur with little impact to the environment, creating jobs, revenue for the state and energy independence.

Greg Albright, a BLM spokesman in Montana, said the agency is obligated to manage public lands for multiple uses, which means balancing energy needs and ecological concerns.

“Granted, oil wells aren't the prettiest thing on the face of the planet, but we also have a responsibility to develop natural resources in an environmentally sound way for the benefit of everybody,” he said. “There are a lot of fears, a lot of emotion, but we don't have a division called ‘How Can We Circumvent The Law?' ”

Energy companies often request that much more land be offered than they intend to lease in an effort to conceal their real interest from their competitors, so the true measure of energy development is how many drilling applications are filed and how much oil and gas is actually being produced.

Over the past decade in Montana, the leases and acreage offered and the number that sold decreased until this year, when there was a big jump, according to BLM records.

During the same 10-year period, though, drilling permit applications increased, the annual production of natural gas nearly tripled and the amount of oil increased more than 50 percent in Montana.

That's because energy companies have become more efficient at the risky and costly business of locating, tapping and transporting underground fuels.

Since 1997 in Montana, that efficiency translated into $264 million in royalties, rents and bonuses, some of which were shared with the state.

During that period, the BLM has offered lease sales on 4,570 parcels covering

4.4 million acres in Montana. Of those, 3,122 parcels were sold covering 3.3 million acres. Of those, 2,226 parcels produced applications for drilling permits.

Since 1999, Montana has increased its total oil production from both public and private lands, making it one of only two states in the nation to boost oil production in the last year, according to the Energy Information Administration and the governor's office.

On Nov. 27, the BLM will offer 215 leases for sale covering 227,654 acres in Montana. Most are in traditional oil- and gas-producing areas in the central and eastern parts of the state, but some are in western Montana.

The BLM has responsibility for oil and gas leases on its lands, national forest lands and private lands where the federal government has mineral rights.

The agency can refuse leasing requests if they threaten wildlife habitat, but some environmental protections can be waived at the request of companies. The companies post bonds and other fees, but those fees often fall far short of costs incurred closing wells and cleaning up drill sites.

Drilling on federal lands in five Western states - Montana, Wyoming, Utah, Colorado and New Mexico - has doubled over the past decade to more than 2,000 wells per year, and another 118,000 wells are planned, according to the Environmental Working Group and the National Wildlife Federation.

According to the Government Accountability Office, the BLM doesn't have enough time for oil and gas field inspections or to care for wildlife, cultural resources and the environment because it's so busy processing drilling permit applications.

Federal lease sales in Montana used to be handled quarterly, but now occur every other month. Conservationists say that's because of pressure from the Bush administration to open more public land to energy development, but the BLM says it's because of greater market demand.

The average number of federal oil and gas leases sold each year in Montana has fluctuated under the last three presidents: 199 in the first Bush administration, 301 in the Clinton administration and 260 under the current Bush administration.

Petroleum companies bid to buy the leases, which typically last 10 years but can be extended if the wells are in production. Of the 35 million acres under lease nationwide, about 12 million are in production.

As of September 2006, 3,714 leases covering 4,012,246 acres were in effect in Montana. So far this year, 469,137 acres have been offered for sale in Montana, a big jump after a decade of decline in the amount of land on the auction block.

That increased offering hasn't translated into more actual sales, but it has prompted protests from hunting and fishing groups.

They objected to more than 285,000 acres offered for sale in July alone, prompting the BLM to withdraw 73,000 acres that are to undergo further environmental reviews.

The protests also resulted in several restrictions being added to lease parcels, including protections of streamside areas, although the BLM refused to withdraw leases near the Beaverhead River.

In addition to environmental and sportsmen's groups, concern also is being expressed by outdoor-dependent businesses, the 19-state Western Governors Association and some pro-industry politicians, such as former Sen. Conrad Burns, R-Mont., who want tighter environmental restrictions on oil and gas projects.

The BLM's Albright said the leasing system works well. He cited the agency's decision to remove some tracts from its July lease sale in McCone and Garfield counties because of concerns about sage grouse habitat.

“Everything people do has an impact,” he said. “Just hiking and taking pictures and driving our car to the trailhead have an impact. But we try to minimize our impacts and not allow anything that's irreversible.”

Farling, of Montana Trout Unlimited, said Montanans must act now.

“You're not going to see another Jonah Field in Montana yet, but that's what people are afraid of,” he said, referring to a vast natural gas field in Wyoming that has become ground zero in the controversy over energy development in the West. “We want to get ahead of the curve, so that won't happen.”

Proposed Coal Plant Becomes Political

MONTANA, Nov 19 (Neo Natura) - A new Coal Power Plant is proposed to be built eight miles east of Great Falls, Montana in conjunction with five rural electric cooperatives. The "Highwood Generating Station [pdf]" is proposed to come online in 2012.

A meeting to discuss concerns about the coal-fired plant occurs today at 10 a.m. in the courtroom of the Chouteau County Courthouse in Fort Benton.

Residents looking for a definitive vote by the public on the proposed coal-fired Highwood Generating Station may have been disappointed by the November 6th municipal government election in Great Falls.

Coal-plant critics were hoping to sweep three races, which would have given them a majority on Great Falls' five-member City Commission. Coal-plant supporters were hoping for a sweep by candidates in favor of the plant.

Instead, voters split their votes, defeating incumbent City Commissioner Diane Jovick-Kuntz, but apparently granting Mayor Dona Stebbins another term in a tight race against second-place finisher Ed McKnight.

Winning two City Commission seats were Mary Jolley, who has been skeptical of the coal plant, and Bill Bronson, an attorney who strongly supports the plant.

A majority of the City Commission will remain in favor of the power plant.

MT D.O.C. - New "Green" Division

MONTANA, Nov 19 (Neo Natura) - In a continuing effort to promote renewable energy development and bring new jobs to Montana, the state’s Department of Commerce created a new division to specifically focus on renewable energy infrastructure.

The Montana Legislature approved the division, dubbed Energy Infrastructure Promotion and Development, during its 2007 session to focus on promoting and developing additional energy distribution capacity. The state says it expects the new division to bring more jobs to the state, increasing the tax base.

“This new energy division will aggressively pursue opportunities to obtain leveraged resources to ensure Montana achieves the biggest bang for the buck,” says Gov. Brian Schweitzer (D).

The division comes after a law created under Montana legislature in 2005 that requires each public utility operating in the state to procure a minimum of 5 percent of retail electricity sales from eligible renewable energy sources beginning in 2008, increasing to 10 percent in 2010, and 15 percent in 2015 and thereafter. At least 75 MW of capacity must come from community renewable energy projects.

Wind On The Rocks (Part 2)

MONTANA, Nov 19 (Neo Natura) - Congress enacted a broad range of renewable energy tax credits in the Energy Policy Act of 2005, but most expire at the end of 2008. Geothermal projects are already feeling the impact of the approaching deadline, as companies must increasingly gamble on what Congress and the President will or will not do about these credits. Unfortunately, this means some projects could be downsized or put on hold.

Both the House and Senate have passed energy legislation this year. The House bill proposes a four-year extension of the production tax credit (PTC) for wind, geothermal, biomass and small hydropower as well as the investment tax credit (ITC) for solar, fuel cells and other distributed technologies.

The Senate Finance Committee approved a five-year extension of the PTC and ITC; however, because there were objections to how the credit is paid for, the provision needs 60 votes to pass on the Senate floor. As a result, the tax extensions have not yet been voted on. In addition, both the House and Senate legislation have included provisions that would expand the Clean Renewable Energy Bond (CREBs) program, which gives co-ops and public power groups incentives to invest in renewable energy.

But the fate of the energy bill is still unclear, as you probably have read in the news. Even with oil hitting $90 a barrel and a growing consensus about the urgent need to address global warming, it’s unclear if Congress will extend these credits before they expire.

There are still real hurdles to overcome. The Administration’s formal statements on the House and Senate energy bills indicate the President will likely veto the bills as currently written. Also, the official Office of Management and Budget (OMB) statement ambiguously expresses opposition to the House bill’s $8 billion in renewable energy and conservation “tax credit bonds” and voices generalized “concerns” about the bill’s renewable energy and energy efficiency tax credits.

The history of the production tax credit, which was first written for new wind and closed-loop biomass plants in 1992, shows that the credit often expired before it was extended. It has been a rollercoaster ride for wind project developers, causing damage to the industry whenever the credit expired.

Wind On The Rocks

MONTANA, Nov 19 (Neo Natura) - Federal funding swept into eastern Montana in November of 2006, bringing with it new opportunities for wind generation.

Montana wind energy projects received $72 million in federal funds Nov. 20 through the Clean Renewable Energy Bonds program. Created by the 2005 Energy Bill, the program allows governmental and tax-exempt entities to finance alternative energy projects at zero interest. The program set aside a total of $800 million in tax credit bonds.

Last June the ambitious scheme to bring 40 Montana farmers into the renewable energy business is now on hold, due to legislative and financial woes.

Things looked promising for the project, dubbed “40 windmills on 40 farms,” or “40 by 40,” as recently as November 2006, when the federal government awarded 34 Montana wind projects a total of $72 million interest-free Clean Renewable Energy Bonds (CREBs).

Billings, Mont.-based Green Electricity Buying Cooperative (GEBCo) came away the big winner, receiving $31.7 million to move forward with two 10-megawatt (MW) wind developments in Montana’s Yellowstone and McCone counties. The 40 by 40 project, which aimed to install one 100-kilowatt turbine on the land of 40 different Montana farmers, then sell the power through the creation of a “green” cooperative based on voluntary membership, was based on future CREBs financing.

But for GEBCo to put its plans into action, it needed Montana’s legislature to pass a law allowing co-ops to own generating facilities.

“We were pretty much assured that if we could get a piece of legislation passed that said we could own property, we would also get the money to do the 40 by 40,” says Pat Dopler, GEBCo board president. “The lobbying effort we put on was Herculean.”

The co-op’s plans began to fall apart when Montana’s legislature killed GEBCo's bill in committee this spring, according to Dopler. GEBCo then turned its attention to House Bill 25 (HB 25), known as “the re-regulation bill.” The proposed bill was a major piece of Montana energy legislation intended to undo parts of the state’s 1997 utility deregulation bill, a law that had forced the state’s largest utility, Montana Power, to sell its power plants, and freed customers to shop for electricity among competing suppliers.

HB 25, supported by NorthWestern Energy, a Sioux Falls, S.D.-based utility that had bought Montana Power in 2002, was signed into law in May 2006 with none of the provisions sought by GEBCo.

When the new law goes into effect in October 2007, NorthWestern will again be able to own generation facilities. But GEBCo and other Montana co-ops will not. While Montana law allows co-ops to purchase and sell power, they’re prohibited from doing business in generation, transmission and distribution. Further, Montana electricity purchasers will no longer be able to choose their suppliers — essentially locking some 300,000 customers into NorthWestern.

“GEBCo was trying to siphon off customers of NorthWestern, and that is simply a continuation of the deregulation of the industry,” says Jim Jensen, executive director of the Montana Environmental Information Center. “We’ve learned from bitter experience that model doesn’t work, and we’re trying to reverse it, not continue it.”

But failed legislation wasn’t GEBCo's only problem. While it earmarked CREB money for the 10-MW projects, the co-op was short on start-up financing, as well as access to transmission lines, wind turbines and members. The co-op also lacked plans for firming resources, an essential element for stabilizing the grid when using an intermittent generator such as wind power — especially in Montana, a state characterized by strong gusts.

GEBCo had seemingly put the cart before the horse, according to some experts, including Greg Jergeson, chairman of the Montana Public Service Commission (PSC). “From the perspective of the PSC, there were questions about how far along they were and what commitment they were asking to be made by the legislature for what was an uncertain business plan.”

GEBCo was formed in March 2006 specifically to pursue renewable energy and sell it to Montanans. Members were to pay more for wind power at the outset and less over time as projects were paid for. But deregulation’s critics argue that expected competition never materialized and most Montana customers have been forced to buy power at higher rates.

“The whole notion of CREBs was to bring alternative energy operated by nonprofits or public agencies into the market the same way that the tax credit brings alternative energy into the market for investor-owned entities,” Jergeson says, referring to the federal production tax credit that provides lucrative incentives for large companies that have a significant tax burden. Jergeson says he had questions about GEBCo since its inception, mainly because it planned to sell power for more than market rates.

John Fitzpatrick, NorthWestern’s governmental affairs director, says the whole point of eliminating or limiting customer choice is to allow for a stable planning base for investment in utility generation assets.

“A utility can’t go out and basically sign a contract for a power plant and spend a billion dollars on it, anticipating that it’s got a 500-MW load, and then have 200 MW go to choice — either to municipal utilities or green electric buying co-ops or anybody else — only to have the balance of the ratepayers standing there holding the bag for a financial commitment that was based on certain expectations,” Fitzpatrick says.

Cut Bank Wind Farm To Double In Size

MONTANA, Nov 16 (Neo Natura) - The company Naturener, who bought Montana's largest wind farm, is planning on expanding the size of their Cut Bank operation.

Naturener's first announcement was its intention to more than double the size of the proposed McCormick Ranch Wind Park from 120 to 300 megawatts. That would make the project in Toole and Glacier counties even bigger than the 135-megawatt wind farm in Judith Gap, the state's sole wind farm producing at a large commercial level.

The $500 million wind farm is proposed for 10 miles west of Shelby between U.S. Highway 2 and the Marias River, in Toole and Glacier counties.

Combined, the Alberta and Montana companies were planning 1,800 megawatts of wind power. And both had purchased capacity on a proposed power line between Great Falls and Lethbridge that will ship wind-generated electricity to customers in Montana and Alberta. Naturener now owns that capacity. The company also says it plans to invest $3 billion in developing the full 1,800 megawatts by 2012.

Gov. Brian Schweitzer said that utility lobbyists typically dismiss wind power as being "fine for hippies living on a mountaintop smoking marijuana."

The Montana Department of Environmental Quality is expecting to release an environmental impact statement on the merchant transmission line within a few weeks, said Bill Williams, a Montana-Alberta Tie vice president. The Canadian National Energy Board also is expected to render its decision on the project in a few weeks.

Despite these planned projects Montana is still lagging behind other north-western states in wind farm development.

Montana’s handful of wind farms can generate enough electricity to power about 50,000 homes, or about 145 megawatts. Most of that capacity is one project, the Judith Gap wind farm.

That total isn’t bad, considering Montana’s population. But most states in the Northwest and the northern plains have more.

North Dakota generates slightly more wind electricity than Montana; Wyoming has a maximum wind generation capacity twice as big as Montana’s, with 288 megawatts. Washington, Minnesota and Iowa are approaching 1,000 megawatts each. Most of these states also have major wind farms under construction, while Montana has only one project of any size being built, near Baker.

Some boosters of wind power insist Montana is not lagging behind, and say it’s on the cusp of a boom in new projects, many of which are on the drawing board.

Some of the obstacles being stated for Montana's slowness to develop new wind energy resources are:

• A lack of transmission lines to move large amounts of wind- produced power (or any power) from Montana to major urban markets in the West and Southwest.
• A perceived reluctance on the part of NorthWestern Energy and electric co-ops when it comes to buying and encouraging more wind power. A company-backed bill passed by the 2007 Legislature bars small wind-power projects from wooing away NorthWestern customers, and co-ops are exempt from a law requiring utilities to buy more renewable power, such as wind.
• Wind power is a political football. As Gov. Brian Schweitzer and fellow Democrats have made wind power their cause, Republicans have often resisted it, saying it’s too costly for consumers.

Converting Coal Into Fuel

MONTANA, Nov 16 (Neo Natura) - Governor Schweitzer is planning on creating three coal-to-gas plants which would transform coal into gasoline and jet fuel.

Schweitzer envisions a plant where the state-owned Otter Creek coal reserves are located in Powder River County. It would cost $2.5 billion to build a private project over two years with 5,000 construction workers, he said, citing Pentagon estimates. About 1,000 people would operate the plant permanently, not counting those working to mine the coal to fuel the plant. Such a plant would produce 30,000 barrels of fuel daily.

The Fischer-Tropsch process is a catalyzed chemical reaction in which carbon monoxide and hydrogen are converted into liquid hydrocarbons of various forms. Typical catalysts used are based on iron and cobalt. The principal purpose of this process is to produce a synthetic petroleum substitute, typically from coal or natural gas, for use as synthetic lubrication oil or as synthetic fuel. The process was originated in 1923 by two german scientists. Hitler used the process to power German tanks and other vehicles during World War II when the country was short of oil.

Two companies are being helped by Schweitzer in order to implement the projects.

While there's been no firm commitment from Peabody Energy or Rentech Inc., Schweitzer told reporters here that the prospects for a plant being built -- likely in southern or eastern Montana -- are "very promising."

Rentech Inc. is a developer of coal-to-liquids and gas-to-liquids technologies, and Peabody Energy calls itself the world's largest private-sector coal firm. A telephone message left for a Peabody Energy spokesman was not immediately returned Tuesday morning.

However, optimism can only build so much. A late envionrmental-oriented permit has delayed the first plant, and has caused X-cel, the financial investor, to reconsider the project.

Montana Gov. Schweitzer’s ambitious plans to create a coal-to-liquid-fuel industry in the state have also largely been derailed. Last month the backers of a $1.5 billion coal gasification plant near Roundup abandoned their attempt to use an expired air quality permit to build the station. A second new-age coal plant, announced by Schweitzer last October, has become an embarrassment: the companies cited by the Governor’s office as “primary developers” of the Bull Mountain facility denied any involvement when contacted recently by the Missoula Independent.

Other arguments include environmentalists that say the technology is not as clean as it is purported to be, while political foes said the governor has unrealistic expectations.

Water Resources Development Act of 2007 (HR 1495)

MONTANA, Nov 15 (Neo Natura) - Here is a summary of how the recently passed Water Resources Development Act of 2007 (HR 1495) affects Montana.

• Title 1 (Sec. 1002) provides for aquatic ecosystem restoration in Montana.
• Title 3 (Sec. 3175) amends the WRDA of 1988 to allow the Secretary to operate headwaters reservoirs below the minimum or above the maximum water levels established in that year in accordance with water control regulation manuals developed by the Secretary, after consultation with specified parties and subject to specified notification requirements.
• Title 5 (Sec. 5067) amends the WRDA of 1999 to include Wyoming in a program providing environmental assistance to nonfederal interests in rural Nevada and Montana.
• Title 5 (Sec. 5093) Directs the Secretary to take specified actions regarding various projects in Minnesota, Mississippi, Missouri, Illinois, Montana, Nebraska, New York, North Carolina, and Ohio.

Can Coal Be Green?

MONTANA, Nov 15 (Neo Natura) - The Governor of Montana is calling for vast tracks of land to be strip-mined for coal as the only way of reducing America's dependence on foreign oil.

As high petrol prices, the shutdown of BP's Prudhoe Bay oilfield, and conflict in the Middle East dominate the headlines, Brian Schweitzer is the latest politician to risk the wrath of the environmental lobby by pressing for greater use of coal.

The black rock currently accounts for more than half of America's electricity production and the industry has been quietly making a resurgence. With oil prices stubbornly above $70 a barrel, coal is again an economically viable resource.

Mines numbered more than 9,000 in 1923, a figure that dwindled to just 1,300 two years ago, but is climbing once again. The US is the Saudi Arabia of coal with more than 25pc of the world's recoverable reserves - about 270bn tons or enough to provide all the energy demands in the US for at least 200 years at current rates.

New technology is making that coal easier and cleaner to process. The US National Mining Association is particularly excited about two developments that could make coal as popular as it was when it drove the furnaces of the Industrial Revolution.

Last month, four sites were shortlisted as the potential home of the FutureGen project, a government-sponsored plan that hopes to create the ultimate energy source of "clean coal". The putative plant will create zero carbon dioxide emissions and turn every bit of energy and emissions into some useful byproduct.

Operators are confident that technology will soon create the ability to turn coal into an easily transportable liquid that could then be transformed into petrol and jet fuel. The NMA is already talking to heavy jet fuel users such as the airlines and the US military. Although the start-up costs are massive - $1bn to build a coal-to-liquid plant - the NMA says the cost of production is cheaper than using oil once a barrel of crude rises above $45 a barrel.

But doubters see strip-mining, where acres of land are transformed into moonscapes to reach the coal beneath, as detrimental to the environment.

"In effect, America's vast reserve of coal is like a giant anchor slowing down the nation's transition to new sources of energy," said Jeff Goodell in his book Big Coal: The Dirty Secret Behind America's Energy Future.

Exxon Fire at Billings Refinery

MONTANA, Nov 15 (Neo Natura) - Exxon Mobil had an explosion and was fighting a fire at 6am on October 17th 2007 at its 60,000 barrel per day refinery in Billings, Montana. [ID:nN17288475]

The fire contributed to pushing the price of oil up.

NEW YORK, Oct 17 (Reuters) - U.S. crude oil futures were up on Wednesday, matching the record peak at $88.20 after news of a Montana refinery fire and ahead of fresh oil inventory data.

The explosion occurred in a processing unit after piping in a high-pressure hydrotreater leaked gases that ignited, although an exact cause had not been determined. The refinery's general manager stated that no one was in the area at the time.

A spokesman for the company said the refinery continues to operate but some units have been scaled back. She said the cause of the fire is under investigation.

Coincidentally the ConocoPhillips refinery in Billings received an EnergyStar award on November 13th 2007. The refinery was awarded the award in part for being particularly efficient in capturing and recycling thermal energy. The refinery won the same award in 2006 for cutting overall sulfur dioxide emissions from 2,400 tons in 1992 to 270 tons in 2005.

The hurdles of hydrogen.

Maggie Galehouse writes a brief summary about the hurdles of hydrogen in a 2005 article of The Arizona Republic.

Education, habit and cost are the main reasons we don't use more hydrogen power in our everyday lives, said R. Paul Williamson, dean of the College of Technology at the University of Montana.

"Around 1875, they had a horseless carriage committee in Congress, and everyone was worried to death about this new thing coming out called gasoline," Williamson said. "We're at 1875 all over again."

In 2002, Williamson started the Montana Hydrogen Futures Project, with the lofty goal of changing Montana into a hydrogen-based economy.

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He tells anyone who will listen that oil production is going to peak in 2010 and that supply and demand is going to have an immense impact on what we pay for gas. It will be easier to consider hydrogen-powered automobiles when gas costs $7 or $8 a gallon, he said.

But at the moment, he concedes, anyone leading the way in hydrogen power incurs higher maintenance costs on the front end because there is no commercial infrastructure to support it.

"It's a chicken and egg thing," Williamson said. "You won't get hydrogen cars until you have a place to fill them up, and you won't get places to fill them up until you have the cars."

Existing off the power grid means there is virtually nothing to rely on but yourself, he added, and mistakes are inevitable.

And yet, Williamson said, "it's a lifestyle choice we're going to have to make."