Asian Coal Demand Will be Supplied, Why Not by Us?

Asking Montana to sit out the opportunity to supply our coal to meet the world’s energy demand will cost our state billions of dollars

By Alan Olson

There’s an amazing thing about the free market, it always finds a way. Or put a little more specifically, entrepreneurs are experts at sniffing out consumer demand and finding a way to take advantage of the market opportunity.

Right now there is an opportunity to supply coal in an Asian market that is experiencing rapid growth. According to the federal Energy Information Administration, coal imports by Asian countries are expected to increase by 65 percent over the next 30 years.

Montana is very well positioned to supply some of that demand. And by doing so we’ll add literally thousands of new, high-wage jobs in our state, increase annual tax collections by hundreds of millions, and lift the prosperity of the entire state.

But there’s a catch. We need more export capacity on the West Coast to get our product to market. And right now, environmental activists, including some in Montana, are erecting barriers to our ability to export American commodities.

If they win, Montana loses. By blocking access to the market, we would kiss goodbye the best opportunity our state has to create new jobs. And if the environmentalist are successful in blocking Montana coal exports, what have they gained? The answer is absolutely nothing. Keeping Montana coal in the ground would have zero impact on global emissions.

There would be no impact on emissions because the Asian demand will continue to increase no matter what we do in Montana – they’ll just find a way to supply that demand from elsewhere. Most likely the spoils of our folly will go to Indonesia or Australia.

New coal-fired power plants are springing up all over Asia, both in developed countries like Japan and South Korea, and in emerging markets like India and China. Demand is going through the roof because they have over 1 billion people who still do not have access to electricity.

Environmental activists in Oregon and Montana, cheered a recent decision by the Oregon Department of State Lands to deny permit to build a new bulk commodity export facility at Port Morrow – a facility that would have been used to export coal mined in Montana.

Just a few days later the Port of Metro Vancouver in British Columbia announced approval of a building project to expand their coal export capabilities. Some Montana coal could find its way to Vancouver, but at less-competitive transportation costs. Furthermore, Montana coal will always be second in line behind coal produced in Canada.

So why are environmental activists cheering Oregon’s small-minded decision? We’ve simply handed what should have been American jobs and investments over to our good friends north of the border.

Asking Montana to sit out the opportunity to supply our coal to meet the world’s energy demand will cost our state billions of dollars. There’s no replacement that comes even close to matching that kind of opportunity — erecting windmills and building solar panels or enticing more tourists to our state are both just drops in the bucket compared to our opportunity in coal.

The free market will always find a way. Growth in demand for coal in Asia is real and it’s happening today. Who better to benefit than us, Montana?

Alan Olson is a state senator from Roundup

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