Energy policy in Montana

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Energy policy in Montana
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Quick Facts
Energy Department Montana Department of Environmental Quality
State Population 1 million
Per Capita Income $37,370
Energy Consumption
Total Energy Consumption 398 trillion BTU[1][2]
Per Capita Energy Consumption 398 million BTU
Energy Spending
Total Energy Spending $5,576 million
Per Capita Energy Spending $5,589
Price of Residential Natural Gas $7.92 per thousand cubic foot
Price of Electricity 10.27 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in Montana
Fracking in Montana

Energy policy in Montana depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Montana focuses on increasing the use of traditional energy and renewable energy sources. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Montana

Energy overview

State facts

Below are quick facts about Montana’s energy climate.

Montana

In Montana

  • wind electric power generation grew by 34 percent in 2011 and supplied 4.2 percent of the state’s net electricity generation.
  • more than half of net electricity generation comes from coal, and most of the rest comes from hydroelectric power.
  • natural gas is the main source of energy used in home heating, making up 55.2 percent of all home heating consumption.
  • transportation is the largest energy-consuming sector in the state.[3]

Available energy resources

Montana is a net supplier of energy to the nation, producing large amounts of fossil fuels and some renewable energy. Montana holds over one-fourth of the nation's estimated recoverable coal reserves. Areas in the eastern part of the state are believed to hold large deposits of crude oil and natural gas. Montana produces about one in every 100 barrels of U.S. oil. Most of this production is near the North Dakota border. Montana’s oil production declined substantially from its 2006 high as producers focused on North Dakota, where the Bakken Shale layer is thicker. Several pipelines carry Montana crude oil to refineries in Wyoming, Utah, Colorado and the Midwest. New production has been limited due to the lack of pipeline capacity. Montana produces between three and four of every 100 tons of U.S. coal, but this large amount of coal comes mainly from six mines in the state. The majority of Montana's coal output comes from several large surface mines in the Powder River Basin in southeastern portion of Montana.[3]

Montana also has substantial renewable energy resources. Montana has a number of hydroelectric dams run by federal or private entities, but most of these dams are decades old. Six of the 10 largest electricity generating plants in the state are hydroelectric facilities, and Montana is a major hydroelectric power producer. Hydroelectric generating capacity is growing around the state. With its favorable geography, Montana also has some of the best commercial wind potential in the nation. Near the center of Montana, there are several electric utility-scale wind farms, and more are in various stages of planning. One wind project is proposed at the former Anaconda copper smelter in western Montana. However, these new wind projects are dependent on demand for renewable energy from California and other states. Montana is considering developing both geothermal energy and biomass energy. The state has significant geothermal potential, particularly in the southwestern mountains of the state, but it has not been tapped for electricity yet.[3]

Consumption and prices

Energy consumption in Montana
MT energy consumption chart.png

Legend[4]
     Transportation       Residential     Industrial       Commercial
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As shown on the pie chart to the right in 2011, roughly a one-third of Montana’s energy use was for transportation, and a little over a quarter was used for industry; the rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of coal, followed by natural gas and electricity.[3]

Gasoline, used in transportation, accounts for three-fifths of the petroleum consumed in the state.[3] Generally the price of gasoline in the state tracks closely to the national average.[5] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents/gallon of gasoline and 24.40 cents/gallon of diesel fuel. In addition to that, Montana collects a total tax of 27.8 cents on every gallon of gasoline and gasohol diesel fuel, which ranks it at the 22nd highest in the United States.[6][7]

Comparisons tables

The table below compares Montana’s consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Wyoming, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Montana’s rank of 42nd in carbon emissions means that carbon emissions are lower in Montana than in Wyoming, which has a ranking of 33rd.
  • Per capita income in Wyoming is higher than the national average, and much higher than in Montana, which at 37th ranks 29 places behind Wyoming’s ranking of eighth in per capita income.
  • These two states are similarly placed in the low rank on population, overall consumption and overall spending. Per capita energy consumption in Montana (at 14th) is lower than in Wyoming (at first).
  • Per capita spending in Montana is somewhat lower since it ranks seventh to Wyoming’s ranking of third.
  • Natural gas prices are only slightly lower in Montana compared to Wyoming, but electricity prices are almost identical in Wyoming and Montana.[3]
Consumption and Expenditures Comparisons Summary
Type MontanaWyomingU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population1 million440.6 million51313.9 million
Per Capita Income Average$37,37037$48,6708$42,693
Total Consumption398 trillion BTU44553 trillion BTU4097,301 quadrillion BTU
Per Capita Energy Consumption398 million BTU14975 million BTU1312 million BTU
Total Spending on Energy$5,576 million45$5,406 million46$1,394,088 million
Per Capita Spending on Energy$5,5897$9,5293$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$7.9244$8.4037$12.48
Price of Electricity, cents per kWh10.273510.243612.31
Total Carbon Dioxide Emissions, million metric tons (2010)34.94264.9335,631
*Rank is from highest to lowest.
See also: State Energy Rankings to compare all 50 states


Consumption of energy for heating homes in Montana
Source Montana 2011 U.S. average 2011
Natural gas 55.2% 49.5%
Fuel oil 1.6% 6.5%
Electricity 21.1% 35.4%
Liquid Petroleum Gases (LPG) 12.1% 5%
Other/none 10.0% 3.6%


Production and transmission

Montana produced 1,104.6 BTU of energy in 2011. Of that 67 percent came from coal, almost 13 percent from crude oil and 7 percent from natural gas. Roughly 13 percent came from what the U.S. Energy Information Administration classifies as ‘other’ renewable energies.[8]

Energy production by type in Montana, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 140.1 12.68% 1.17%
Natural gas 77.8 7.04% 0.29%
Coal 746.7 67.6% 3.39%
Other 140.1 12.68% 1.97%

More than 50 percent of Montana's net electricity generation comes from coal, while most of the rest comes from hydroelectric power. Wind generation is still a small portion of energy production, but it is a growing component. More than two-thirds of net electricity generation in the state still comes from independent power producers.[3]

The people of Montana use about one-half of the electricity generated in the state; the remainder is sent to other western states by high-voltage transmission lines. Most of Montana is part of the Western Interconnection grid, which serves several western states and Canadian provinces. Several transmission projects are in the process of development to increase capacity for moving electricity from both conventional and renewable sources from Montana to states to the West and Southwest and to expand into Canada.[3]

Montana has a small amount of natural gas-fired electrical generating capacity. Natural gas is mainly supplied and transported through several interstate pipelines. These pipeline companies include KM Interstate Gas Co., Northern Border Pipeline Co., Northern Natural Gas Co., Northwest Energy Co. Shoshone Pipeline Co. and Williston Basin Pipeline Co. Major electricity generating plants include Colstrip run by PPL Montana LLC; Noxon Rapids run by Avista Corp; Libby run by USCE-North Pacific Division; Silver Bow Generation Plant run by CES Acquisition Corp; and, Hungry Horse run by the U.S. Bureau of Reclamation.[3]

NorthWestern Energy is the state's largest utility company and provides electricity to 90 percent of Montana’s population.[9] There are 25 not-for-profit electric distribution cooperatives in the state of Montana that are locally owned and operated by their cooperative members, with 216,846 meters served.[10]

Where electricity comes from in Montana[11]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 1,000 0.05% 0%
Coal-fired 1,023,000 48.88% 0.06%
Hydroelectric 771,000 36.84% 0.24%
Other renewables 195,000 9.32% 0.1%
Total net electricity generation 2,093,000 100% 0.05%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
Montana’s Renewable Portfolio Standard (RPS) were enacted in April 2005 as part of the Montana Renewable Power Production and Rural Economic Development Act. This act requires public utilities and competitive electricity suppliers serving 50 or more customers to obtain a percentage of their retail electricity sales from eligible renewable resources.[12]
See also: Fracking in Montana

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Montana’s (RPS) define eligible renewable resources as the following: geothermal, wind, solar, existing hydroelectric projects (10 megawatts or less), certain new hydroelectric projects, wastewater-treatment gas, low-emission, non-toxic biomass, landfill or farm-based methane gas and fuel cells where hydrogen is produced with renewable fuels.[13]

Utilities and competitive suppliers can meet these standards by forming long-term purchase contracts for electricity in three ways: bundling with renewable-energy credits (RECs), purchasing the RECs separately, or by a combination of both. The RPS law includes cost caps that limit the additional cost utilities must pay for renewable energy. The RPS law also allows cost recovery from ratepayers for contracts pre-approved by the Montana Public Service Commission (PSC). The RPS provides for community renewable energy projects, which is defined as renewable energy projects under 25 megawatts where local owners have a controlling interest. Cooperative utilities and municipal utilities are generally exempt from these requirements, but cooperative and municipal utilities with 5,000 or more customers must implement a renewable-energy standard that recognizes the "intent of the legislature to encourage new renewable-energy production and rural economic development, while taking into consideration the effect of the standard on rates, reliability and financial resources."[14]

Major legislation

  • Montana Senate Bill No. 305 approved a detailed energy policy that outlines goals, primarily related to energy production. The act was meant to revise Montana’s energy policy. The legislature passed this law to promote energy efficiency, conservation, production and consumption of a reliable and efficient mix of energy sources that represent the least social, environmental and economic costs and the greatest long-term benefits to Montana citizens.[15]
  • The Clean Air Act of Montana allows the Board of Environmental Review to define air contaminants and air pollutants and sets standards for the state, set limits for emissions and set permit requirements. The board monitors any machine that it finds contributes to air pollution. Unless there is a defined exception, the board may not set standards more stringent than federal standards. The Department of Environmental Quality enforces the act and approves energy work permits.[16]
  • Montana Environmental Policy Act requires state agencies to conduct a report on any project that could have a negative impact on Montana’s people and environment. This legislation has the potential to impact energy regulations by allowing the state agencies that administer permits to require companies to pay for an environmental impact statement (most likely for state-sponsored projects).[17]
  • The Wind Energy Rights Act establishes wind energy agreements. Some examples of what must be included are names and addresses, legal description of property, specified terms of use, compensation and liability specifications. Agreements must be notarized and may not exceed 20 years unless both parties agree to an extension. Agreements prior to April 21, 2011 are exempt from new regulations.[18]
  • Montana State Code Title 77: State Lands, Chapter 4: Geothermal and Hydroelectric Resources entitled State Energy Policy requires any person or organization seeking to commercially develop geothermal or hydroelectric resources on state land to obtain leases from the Board of Land Commissioners under the Departments of Natural Resources and Conservation. The board defines requirements for the lease, the rental or royalty to be paid and sets the application fee. The board may require at any time that the lessee, to protect the rights of the state, file a bond. Lessees are financially responsible for any damage that results from the geothermal lease. The board has the right to determine the value of a power site before issuing hydroelectric leases.[19]
Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Ballot measures

Below is a list of energy related ballot measures across Montana that may or may not have made onto the ballot. These ballot measures cover issues from fracking bans, to utilities and related tax questions.

Government agencies and committees

  • The Montana Public Service Commission (PSC), has broad regulatory, supervisory and investigative powers over investor-owned public utilities. The PSC can investigate the management of the business of all public utilities. The jurisdiction of the PSC includes customer service and reliability standards and rates charged to retail electricity customers.[21]
  • The Montana Governor’s Office provides direction on the implementation of state policies over electricity and energy development. Montana's Northwest Power and Conservation Council members and the Economic Development Office are entities attached to the Governor's Office which have heavy involvement in electricity and energy policy issues.[22]
  • The Montana Department of Environmental Quality issues air and water permits for electrical generation facilities. It also regulates those facilities and conducts Montana Environmental Policy Act reviews. The department holds responsibility for the Montana Major Facility Siting Act review process over certain transmission facilities, providing assistance with energy efficiency projects and maintaining energy statistics.[23]
  • The Montana Department of Commerce, Energy Promotion, and Development Division is the department that oversees the planning, development, analysis and coordination of energy infrastructure that allows for the development of Montana's energy resources.[24]
  • The Department of Natural Resources and Conservation is tasked with ensuring "Montana's land and water resources provide benefits for present and future generations." The department is managed by the Director of Natural Resources and Conservation.[25]

Major organizations

  • The Montana Consumer Counsel is an organization that represents Montana consumers in electric utility proceedings before the Public Service Commission. The Montana Consumer Counsel is part of the state legislative branch and is overseen by the Legislative Consumer Committee.[26]
  • Montana Environmental Information Center (MEIC) is a statewide advocacy and public education organization. The center was created in 1973 to protect and restore Montana's natural environment. MEIC lobbies the state legislature, monitors state government, educates the public about environmental issues and provides citizens and communities with organizing and technical assistance. MEIC is located in Missoula.[27]
  • The Foundation for Research on Economics and the Environment (FREE) is a free-market environmentalism think-tank based in Bozeman, Montana. FREE conducts seminars that target important opinion leaders in public policy arenas, especially environmental issues. FREE focuses on economics, ethics and the natural and human environment. FREE uses analytic tools based on concepts from economics, science and risk analysis in order to promote environmental and public policies and advance social well-being. The organization emerged from the Center for Political Economy and Natural Resources at Montana State University.[28]
  • The Northern Plains Resource Council (NPRC) is an organization based in Billings, Montana, that was formed by ranch families concerned with the threat of industrial-scale coal mining on their property and their ability to make a living from ranching. The NPRC wants to balance economic gain with social and environmental responsibility. The council also strives to protect Montana's water, land, air and quality of life.[29]

In the news

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration's State Profiles and Energy Estimates, Montana Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Montana Profile Overview," accessed February 22, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 U.S. Energy Information Administration, "Montana Profile Analysis," December 18, 2013
  4. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  5. To compare current gasoline prices in Montana to the U.S average, go to GasBuddy.com
  6. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  7. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  8. U.S. Energy Information Administration, "State Energy Data System, Production," accessed February 18, 2014
  9. American Council for an Energy Efficient Economy, "Montana Utility Policies," accessed February 24, 2014
  10. A Citizen’s Guide to Montana Energy Law, "Montana Legislature," accessed February 25, 2014
  11. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Montana Overview", accessed February 24, 2014
  12. Database of State Incentives for Renewables and Efficiency, "Montana Incentives/Policies for Renewables & Efficiency," accessed February 23, 2014
  13. U.S. Department of Energy Database of State Incentives for Renewables and Efficiency, "Montana Incentives/Policies for Renewables & Efficiency," accessed February 25, 2014
  14. U.S. Department of Energy Database of State Incentives for Renewables and Efficiency, "Montana Incentives/Policies for Renewables & Efficiency," accessed February 25, 2014
  15. Montana Code, "Chapter 385, Laws and Resolutions of the State of Montana," accessed February 25, 2014
  16. Montana Code, "Montana Coal Mining Code, Title 50, Chapter 73, Part 1-4," accessed February 25, 2014
  17. Montana Code, "Montana Environmental Policy Act, Title 75, Chapter 1, Part 1-3," accessed February 25, 2014
  18. Montana Code, "Wind Energy Rights Act, Title 70, Chapter 17, Part 4," accessed February 25, 2014
  19. Montana Code, "Title 77, Chapter 4, Parts 1-2," accessed February 25, 2014
  20. Montana Legislature, "A Citizen’s Guide to Montana Energy Law," accessed February 25, 2014
  21. Montana Legislature, "A Citizen’s Guide to Montana Energy Law," accessed February 25, 20144
  22. Montana Legislature, "A Citizen’s Guide to Montana Energy Law," accessed February 25, 2014
  23. Montana Legislature, "A Citizen’s Guide to Montana Energy Law," accessed February 25, 2014]
  24. Montana Legislature, "A Citizen’s Guide to Montana Energy Law," accessed February 25, 2014
  25. Montana Department of Natural Resources and Conservation, "About," accessed October 30, 2011
  26. Montana State Legislature, "Agency Profile of The Montana Consumer Counsel," November 2012, accessed February 25, 2014
  27. University of Montana, "Montana Environmental Groups," accessed February 25, 2014
  28. Foundation for Research on Economics and the Environment, "FREE’s Mission," accessed February 25, 2014
  29. Northern Plains Resource Council, "About Us," accessed February 25, 2014