The Economic Value of American Coal Exports

The U.S. - and the world - simply are not able to abandon coal for other fuels. About 1/3 of U.S. electricity is produced by coal-fired generation; in Montana 60% of electricity generation is provided by coal. Alternative energy sources, including wind, solar, biomass, geothermal and others account for less than 5% of U.S. electricity, and are projected to only be able to supply less than 10% in the next 20 years, even under ideal circumstances.

In the meantime, natural gas seems appealing to many as a transition fuel because prices currently are so low. But gas has a history of price volatility; many experts are convinced that prices soon will rise substantially; when they do, prices for electricity - and for everything produced with electricity, which is to say virtually everything - also will rise.

Montana has one-third of all U.S. coal reserves - and just the coal that is economically recoverable using today’s technology will serve domestic needs for 250 years.

Despite having such huge coal reserves, Montana accounts for just 5 percent of U.S. coal production - meaning it would take 1,600 years, at the current rate, to exhaust our supplies. (Wyoming, America’s largest coal producer, has one-third the reserves of Montana but produces 10 times as much coal.)

Coal is a major economic engine for Montana - and can be an even more significant driver of prosperity and job creation if we leverage our enormous coal reserves.

In one year, the Montana coal mines generated over $123 million in revenues to the state (excludes federal taxes paid).

In 2011, the Montana coal mining industry directly employed 1,200 people with an annual payroll of $87.5 million. Indirect employment was 4,450, with a $190 million annual payroll.

Montana’s coal industry has paid over $1 billion in royalties to date.

Exporting coal to emerging markets improves the United States trade imbalance. We need to export more goods than we bring in to continue to grow our economy. It’s better for us to sell the Chinese our coal rather than our bonds.

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