Montana’s congressional Republicans are backing a tax break on refined coal, in hopes of sparking investment in Colstrip Power Plant.
Sen. Steve Daines and Rep. Greg Gianforte are among several lawmakers calling for an extension of a tax credit for “refined coal,” meaning coal that’s been screened or pre-treated to lower pollutants when burned. The two Republicans mentioned Colstrip specifically Thursday in an email calling for a renewal of the tax credit.
"Colstrip and energy jobs are a critical part of our Montana way of life," Daines said. "This bill will protect good-paying energy jobs, support refined coal production, and reduce emissions. This is a win for Montana, this is a win for the environment, and this is a win for American energy dominance."
Colstrip is in compliance with federal clean air laws, although its two largest units burned out of compliance for more than two months in 2018.
Tinuum Group, a Colorado-based company that specializes in refined coal, has posted job listings for Colstrip during the past year. Tinuum did not respond to Lee Montana inquiries Thursday. Its most recent posting was for a facility manager for a Tinuum processing plant “dedicated to providing additives to coal as conveyed into the Colstrip Power Plant in Colstrip, Montana.”
“For too long, IRS inaction has left Colstrip in the lurch with uncertainty,” Gianforte said. “This legislation will help provide greater certainty and open the spigot of investment in Colstrip. Our bill protects good-paying Montana jobs and promotes cleaner coal.”
Power Plant operator Talen Energy in the last few months has made changes to the power plant’s coal burning plans, according to the Department of Environmental Quality. Earlier this year, DEQ amended Colstrip’s air quality permit allowing the power plant to burn fuel from sources other than Rosebud Mine, said Kristi Ponozzo, DEQ spokeswoman. Rosebud is within walking distance of the power plant and is Colstrip’s legacy fuel source.
Recently, DEQ approved facility siting for a new coal loading operation at the power plant. The loading facility was initially sought as power plant owners entertained the possibility of no longer getting coal from Rosebud. Formerly owned by Westmoreland Coal Co., Rosebud was tied up in bankruptcy in February. Creditors interested in acquiring the mine as payment initially said they weren’t interested in honoring the supply contract between Westmoreland and the power plant. The creditors now operate under the name Westmoreland Mining LLC.
However the creditors, now operating the bankrupt coal company’s best assets as Westmoreland Mining LLC, eventually agreed to honor the current Rosebud contract to expiration in December.
The non-Rosebud mines Talen applied to receive coal from are mostly in Wyoming. They include: Eagle Butte, Belle Ayr, Rawhide, North Antelope, Caballo, Coal Creek, Black Thunder, Antelope, and Cordero Rojo. In Montana, Decker, Spring Creek and Signal Peak mines were listed as possible sources. The fourteenth mine listed is Otter Creek, a mine sought by Arch Coal that was abandoned when Arch went bankrupt a couple years ago.
Refined coal use has become a statistical anomaly in the United States by increasing as other coal uses declined. In the first three quarters of 2018, refined coal accounted for 121 million short tons, or 21% of all coal produced in the United States, according to the Energy Information Administration.
The refined coal tax credit is a federal subsidy created in 2004 as part of the American Jobs Creation Act. The refined coal must reduce mercury or sulfur dioxide emissions by at least 40%. Otherwise the subsidy isn't available. Nitrogen oxide emissions must also be cut 20 percent. Last year, according to EIA, the subsidy was worth $7.10 per short ton of coal.
The refined coal tax credit would continue for two more years under the bill supported by Daines and Gianforte.