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Carl Molesworth

Montana Tribe Strikes Deal for $7B Coal-to-Liquids Plant
August 22, 2008

Fortunes could be about to change for Montana’s Crow Tribe, thanks to the recent run-up in energy prices.

The Crow reservation sits atop some of the nation’s largest coal reserves -- an estimated 9 billion tons of recoverable resources. Only limited mining has occurred, however, and the tribe’s economy struggles with high rates of poverty and unemployment.

But this month the tribe struck a deal with Australian-American Energy Co., a subsidiary of Australian Energy Co., toward building a $7 billion plant to convert coal into liquid fuels. It would be one of the first such projects in the nation.

If built, the Many Stars coal-to-liquids plant initially would produce 50,000 barrels a day of diesel and other fuels. Construction would begin in several years, and coal for the project would come from a mine not yet developed by the tribe on the reservation, the Associated Press reported.

The tribe’s chairman, Carl Venne, said the coal-to-liquids project offered an unprecedented chance at improving the lives of the tribe’s 12,000 members. The agreement calls for the Crow to receive up to 50 percent of profits from the plant after investors in the project recoup their costs. Total proceeds to the tribe could eventually top $1 billion annually. That would be some serious cash compared to the tribe’s current annual budget of about $26 million.

Until next time …

Posted by Carl Molesworth on August 22, 2008 | Comments (0)