(The Associated Press circulated the following article on January 9.)
BILLINGS, Mont. — BNSF Railway Co. has sent an engineering team to Montana to study the possibility of a coal-to-liquids project that would produce diesel for locomotives, Gov. Brian Schweitzer says.
Schweitzer told The Billings Gazette he pitched the idea during a July meeting with BNSF executives, telling them they were overlooking the company’s biggest economic challenge.
“The most important thing is, you don’t know the price of your diesel 40 years from now,” Schweitzer said.
The governor said he told BNSF it should build a coal-to-liquids plant in Montana to produce diesel fuel, especially because the railroad cannot hedge its costs that far into the future.
Schweitzer said Matthew K. Rose, BNSF’s chairman, chief executive and president, later called him to say the company was interested in the idea.
BNSF spokesman Pat Hiatte said Monday the railroad remains interested in studying a Montana coal-to-liquids project.
“We are still studying the economic and technical feasibility of the technology,” he said. “Montana locations, along with other locations, are being considered.”
In a September news release, BNSF said it was working with independent energy developer Tenaska Inc. of Omaha, Neb., to evaluate locations for a commercial-scale, coal-to-liquids plant. The plant would produce diesel fuel using the “Fischer-Tropsch” process first developed in Germany during World War II.
Schweitzer said BNSF officials told him they were considering locations near Alliance, Neb., and Guernsey, Wyo. The governor said he was later told that those two sites were no longer on the list.
“So, I feel pretty good about our chances,” he said.
Montana has 120 billion recoverable tons of coal, the biggest reserves in the United States.
The governor said he talked with Rose about potential Montana sites with lignite or coal deposits from Otter Creek to Roundup to Nelson Creek in the eastern part of the states.
Part of developing coal-to-liquids in the state is finding customers for the fuel, said Evan Barrett, the governor’s chief business officer. Union Pacific and BNSF are two of the country’s biggest diesel consumers, with BNSF’s 6,300 locomotives burning 1.4 billion gallons in 2005.
Chuck Kerr, a former Billings resident who now is president of Great Northern Properties in Houston, said he hadn’t heard about BNSF’s potential interest in the Nelson Creek site.
His company is developing the Nelson Creek reserves to power a more traditional coal-fired electrical plant, he said, but the times are changing.
“We’re on a completely different economic and environmental arena than we were two or three years ago,” Kerr said. “I think we would be remiss in not looking at other opportunities.”