Billings Gazette: CHS: Montanans will pay more for fuel if Colstrip power exits

A Montana oil refinery says it will lose a key power supplier if Colstrip is shuttered.

CHS Inc., which refines oil in Laurel, gets more than half its power from Colstrip Power Plant, which faces an uncertain future as power companies in the Pacific Northwest prepare to dump coal-generated electricity and tighten pollution controls under the Clean Power Plan to address climate change.

It was the Clean Power Plan that Patrick Kimmet, Laurel Refinery vice president cited Monday while meeting with U.S. Sen. Steve Daines, R-Mont.

“We are reviewing the potential effects of the Clean Power Plan,” Kimmet said. “But regardless, if it leads to the closure of Colstrip, or forces us to pay more for the power that we need to produce gas and diesel for our customers, it will lead to higher costs for everyone in Montana.”

The Clean Power Plan, on hold by court order because of a multi-state lawsuit in which Montana is a plaintiff, calls for a 47 percent cut in carbon dioxide pollution in Montana. The two oldest of Colstrip’s units are considered a likely casualty of those cuts. The final deadline for Clean Power Plan compliance is 2035.

Daines went several steps further than Kimmet, calling the Clean Power Plan a war on Montana.

“The EPA Clean Power Plan is a direct threat. It’s a threat to Montana. It’s a threat to our way of life here,” Daines said.

He cited an economic study financed by Northwestern Energy that calculated a Colstrip closure as a $500 million a year loss to the state economy. That study by the Bureau of Business and Economic Research at the University of Montana has been the criticized for overstating the economic losses.

But Daines pointed out that 60 percent of Laurel Refinery’s electricity currently comes from Colstrip. After the meeting Kimmet said CHS uses electricity from a mix of sources, including wind farms, hydroelectric dams and natural gas. Natural gas recently surpassed coal as the nation’s leading power source and is currently cheaper than coal power.

Refinery engineers, who toured the CHS with Daines, said one thing Colstrip offers that other power sources don’t is reliable power in close proximity to the refinery. Colstrip is about 100 miles from Laurel. Having a power source nearby that doesn’t fluctuate with the water or wind levels is irreplaceable, they said.