Coal slated to roll along MT rail line
September 3, 2009
MATTHEW BROWN Associated Press Writer BROADVIEW
Developers of a reactivated coal mine in south-central Montana said Wednesday they expect to start shipping fuel next week to Midwestern power plants along a new 35-mile rail line. The Signal Peak Mine south of Roundup has undergone a $400 million expansion over the past year under the ownership of two Ohio companies, Boich Group and FirstEnergy. The companies brought in industry veteran John DeMichiei to transform the shuttered Bull Mountain mine into an operation that could soon account for about a quarter of Montana's annual coal production. On Wednesday, Gov. Brian Schweitzer joined mining exe c u t i ve s a n d Bu r l i n g to n Northern Sante Fe Railroad chief executive Matt Rose to dedicate a rail station that connects to the new rail line at Broadview. The Stat ion was named af ter Wal ter Breuning of Great Falls, the world's oldest man who turns 113 this month and who worked for five decades for BNSF's predecessor, Great Northern Railway. State and county officials on hand for Wednesday's ceremonies worried Signal Peak's expansion could be short-lived if the carbon cap-and-trade bill now pending in Congress advances. The bill is expected to drive up coal costs by putting restrictions on how much carbon dioxide power plants can produce. The greenhouse gas is a byproduct of burning coal. "We have waited with bated breath for years to develop that coal. I don't want the federal government to ruin that golden egg," said Yellowstone County Commissioner James Reno. Nationwide, demand for coal has softened since the recession began. Meanwhile, greenhouse gas limits pending in Congress threaten to make the fuel more expensive. Despite those pressures, the mine's developers said Signal Peak represents a long-term investment that already has a guaranteed customer in four powe r plant s ope rat ed by FirstEnergy. Equipment now being installed at the mine will increase its output to 12 to 15 million tons annually within the next 12 to 18 months, said Wayne Boich Jr. Of Boich Group. In coming decades, Gov. Schweitzer said, coal from Signal Peak will fill the fuel gap created by declining production from Appalachian mines. "There's a billion tons of coal here. At the rate we're mining it, it's going to be 50, 60, 70 years" of production, Schweitzer said. Coal production dropped almost 3 percent nationwide in the first quarter of 2009, the most recent data available, compared to the same period last year, according to the Energy Department. The drop was even higher in the Appalachian region. Montana mines in 2008 produced a combined 44.9 million tons of coal, up 1.7 million tons from the prior year. Before the mine's reopening, its prior owners struggled for years to find investors willing to sink money into the project. Several years ago there were plans to build a coal gasification plant at the site but those have since been dropped. Almost 200 miners will work at the mine and more than 100 contractors have been working at the site to build a processing plant and other minerelated infrastructure.