Crow Tribe Plans New Coal-to-Liquid Fuels Plant

Published November 1, 2008

In one of the most ambitious energy-related joint ventures in recent memory, the Crow Tribe is joining forces with an Australian company to construct a $7 billion state-of-the-art coal-to-liquid plant on the tribe’s reservation in Montana.

Construction of the Many Stars coal-to-liquid plant is expected to take several years. Upon completion the plant will initially produce 50,000 barrels of diesel and other fuels a year. It will increase production to as much as 125,000 barrels a day once the facility becomes fully operational.

The tribe’s sprawling reservation, located just southeast of Billings, sits atop some of the richest coal deposits in the United States—estimated at 9 billion tons of recoverable coal. The coal will be mined and converted to liquid fuel, with all operations of the project taking place on tribal lands.

Economic Boom for Tribe

The project is expected to bring some 4,000 construction jobs to the reservation. Once completed, Many Stars will employ 900 people in its mining and fuel-conversion operations.

The tribe’s partner, Australian-American Energy Company (AAEC), has already invested $100 million in developing the project. Under the agreement, the tribe and AAEC will split the profits, expected to be $100 million apiece initially and then rise substantially over the years.

AAEC and the Crow Tribe believe the plant will be in operation for as long as 50 years.

“Once the project is paid off, you’re looking at over a billion a year,” Crow Tribe Chairman Carl Venne told the Associated Press on August 7. “There [are] a lot of things we as a tribe can plan for [the] future of our kids and our grandkids. And that’s why it’s so important.”

Located in Big Horn County, the Crow Reservation is one of the poorest areas in Montana, with chronically high unemployment plaguing the tribe’s 12,000 members. AAEC plans to train tribe members in the intricacies of mining and converting coal to liquids so the plant will have the requisite skilled labor force once it goes into operation.

Activist Obstruction Expected

Venne expects environmental groups and other “outsiders” to oppose the project, but he says he and his tribe are prepared to do battle with anyone standing in the way of alleviating the Crows’ living conditions.

“People have to realize this is one of the poorest counties in the whole nation,” said Venne. “It means we will become self-sufficient as a tribe.”

Escape from Poverty

“This project will do more than just provide hundreds of construction jobs and numerous full-time management and operation jobs,” said Paul Driessen, a senior policy advisor for the Congress of Racial Equality.

“It will also ensure that these workers have health insurance and improved living conditions,” Driessen continued, “and the Crow Tribe receives lease and royalty revenues, as well as corporate and personal income taxes, to improve community schools, hospitals, roads, and other infrastructure.

“The facility will also attract other businesses and investors, just as gold brought prosperity and diverse enterprises to Denver, San Francisco, and other cities that began as mining towns,” added Driessen.

“For the country as a whole,” Driessen continued, “the project will help advance new technologies, while generating new revenue, and promoting new ways to utilize America’s vast coal supplies and offset some of the half-trillion dollars and more that we are spending every year on imported oil.”

Bonner R. Cohen ([email protected]) is a senior fellow at the National Center for Public Policy Research in Washington, DC.