Overview

Resources and Consumption

Montana is rich in fossil fuel resources and renewable energy potential. Its geologic basins hold more than one-fourth of the Nation’s estimated recoverable coal reserves. Montana’s eastern basins also hold large deposits of oil and gas. Rivers flowing from Montana’s Rocky Mountains offer substantial hydroelectric power resources. Considerable wind energy potential is found throughout the State.

Montana’s population and total energy demand are low. However, the State economy is energy intensive and per capita energy consumption is relatively high. The industrial sector, which includes the energy-intensive mining industry, dominates State energy consumption.

Petroleum

Montana typically accounts for nearly 2 percent of U.S. crude oil production. Production is concentrated in the Williston Basin, which covers eastern Montana and western North Dakota and contains three of the Nation’s 100 largest oil fields, two of which are in Montana. Several pipelines carry Williston production south to Wyoming and east to Midwest markets. In addition, a new extension to the Keystone XL Pipeline has been proposed that would pass through Montana as it transfers crude oil from Canada to markets in Texas and on the Gulf Coast. Refineries near Billings supply regional markets with petroleum products, using crude oil brought in primarily from Wyoming and Alberta, Canada. During the winter months, Montana requires oxygenated motor gasoline in the Missoula area but allows the use of conventional motor gasoline in the rest of the State.

Natural Gas

Montana produces minor quantities of natural gas, and consumes only about three-fifths of this production and ships the remainder of its natural gas output to out-of-State markets. Several natural gas pipeline systems pass through the State, transporting Canadian supplies to Midwest markets. About three-fifths of Montana households use natural gas as their primary energy source for home heating.

Coal, Electricity, and Renewables

Montana typically accounts for roughly 4 percent of total U.S. coal production. The majority of Montana’s output is produced from several large surface mines in the Powder River Basin, which straddles the border between Montana and Wyoming. Just over one-fourth of Montana’s coal production is used for State electricity generation; Montana delivers the remainder to markets in more than 15 States. Minnesota and Michigan are the largest recipients of Montana coal.

Accounting for nearly two-thirds of State electricity generation, coal-fired power plants dominate the Montana electricity market. Hydroelectric power accounts for most of the remainder. Montana is a major hydroelectric power producer, and six of the State’s 10 largest generating plants run on hydroelectric power. The State has also initiated programs to expand and enhance hydroelectric power capacity. There are several operational wind farm projects in central Montana, just east of the Rockies. High-voltage transmission lines connect Montana to other western electric power grids, allowing Montana to export large amounts of electricity to neighboring States.

In April 2005, Montana adopted a renewable portfolio standard that requires 15 percent of the State’s energy to come from renewable sources by 2015.