Montana's Coal Cowboy

America's dependence on foreign oil - President Bush called it "an addiction" in his State of the Union address - has become a threat to the country's economy and security.

While the president spent much of last week promoting energy alternatives of the future, like hybrid cars and fuels made from wood chips, the governor of Montana, Brian Schweitzer, says there's something we can have up and running in the next five years.

What he has in mind is using the coal, billions of tons of it, under the high plains of his home state. The governor tells correspondent Lesley Stahl he wants to use an existing process to turn that coal into a synthetic liquid fuel, or synfuel.

The plan is controversial, but Gov. Schweitzer - half Renaissance man, half rodeo cowboy - seems ready for the challenge. In fact, he sounds like he's ready to take on the world.

Schweitzer has called them rats and crooks and hasn't held back on bit. "Hugo Chavez, the Saudi royal family, the leaders of Iran," he said. "How about the countries that end with 'stan'? Nigeria? You tell me. Sheiks, rats, crooks, dictators, sure."

He's a governor with his own foreign policy and no one is calling Brian Schweitzer a wuss. He says flat out that his plan will change the world, and that the key to the country's energy future is buried in the grassy plains of eastern Montana.

"Probably about half of eastern Montana has coal underneath it," Schweitzer explains.

Montana is already mining a small fraction of its coal.

But unlike the deep shaft mining done in West Virginia, Montana coal is surface mined and there hasn't been a fatal accident in 15 years. The governor took 60 Minutes down into one of those huge pits.

"We are surrounded by energy," Schweitzer said. "There's no going down into a mine. It's a road. They drive right out of here."

"But, let me ask you something. Coal has such a bad reputation" Stahl said. "It's dirty. I can feel it. I'm gonna be filthy. I can smell it. It's awful, awful, awful. How many of these would you have to dig out to produce enough of what you're talking about to make it make sense?"

"If we got to 20 of these kinds of pits, we could produce a serious amount of energy for the future of this country," the governor said.

It's not enough to completely break our addiction to foreign oil, but a start. Most coal today is used for electricity but the governor's plan is to turn Montana's billions of tons of untapped coal into a liquid diesel fuel for our cars.

Schweitzer wants to take coal that's been pressurized into a gas, and then use something called the Fischer-Tropsch process to convert that gas into a clean diesel fuel, similar to what is made at a demonstration plant in Oklahoma.

The governor handed Stahl a jar of this synthetic fuel, which looked and smelled clean. "Chanel No. 37," Schweitzer said, laughing. "It is diesel. You can pour that in your diesel car or truck right now."

The Fischer-Tropsch process does have a track record, along with a sinister history. It was first put into wide-scale use in the Nazi era, when Hitler had few oil-rich allies. Ninety percent of his Luftwaffe planes ran on coal-based fuels

Later on, South Africa, also isolated because of Apartheid, used the process.

"So, here you have these horrible regimes, and now we want to take their technology. There's something kind of … spooky," Stahl said.

"Science is neutral," said Schweitzer. "They were pushed against the wall, because they couldn't get oil. We're pushed against the wall because the oil is so expensive."

The price tag to get his plan rolling - $1.5 billion - is a bargain, the governor says, now that crude is trading around $60 a barrel.

Dr. Robert Williams, a senior energy scientist at Princeton, agrees.

"At the oil prices that we expect for the long-term, it would be economic," Williams said.

Stahl told Williams about the jar of diesel Schweitzer showed her. Is this synthetic fuel going to be that clean and smell that good?

"Oh, yes. The Fischer-Tropsch diesel is a superb fuel," said Williams. "Not only is [it] cleaner than conventional diesel, but it also leads to improved engine performance."

And he explained why the process works environmentally.

"The reason this works and is much cleaner is you're not burning coal. You're instead gasifying coal," Williams said.

"And, therefore, things don't go up into the atmosphere?" Stahl asked.

"Well, when you gasify coal, you can take the pollutants out," Williams explained.

"You're saying before the coal is ever burned in any way, you can separate out the bad stuff?" Stahl asked.

"You do that very early on," Williams replied.

The new Fischer-Tropsch plants, Schweitzer says, wouldn't have the traditional smoke-belching smokestacks associated with today's coal-fired power plants. But he does acknowledge there would be some emissions.

"There would be less than one percent than you get in a plant like this," the governor said, pointing at smoking smokestacks in the background. "This is old coal technology. We're talking about the new way."

But even in the new way there's an environmental problem, and it's a big one: carbon dioxide, which, while not a poison, is the No. 1 cause of global warming.

"Carbon dioxide will be generated at a rate that would lead to greenhouse gas emissions that are twice those for conventional crude oil," said Williams.

Williams says this process will produce twice as much carbon dioxide than traditional petroleum if you vent the CO₂ to the atmosphere.

But Schweitzer has promised not to do that. "This spent carbon dioxide, we have a home for it. Right back into the earth, 5,000 feet deep," the governor explains.

He plans to sell that carbon dioxide to oil companies that use it to boost the amount of oil they can pump. "It's called enhanced oil recovery. It's worth money to the oil business," Schweitzer said.

The sales pitch keeps coming: Schweitzer says the fuel will not only be cleaner, it'll be cheaper, too.

"We can produce this fuel for about $1 a gallon. We have gas taxes, depending on what state you're in, of 60, 70, 80 cents a gallon. So, do the math," he said.

"You know, it sounds almost too good to be true," Stahl said.

"Well, that's what got me excited," Schweitzer replied.

He's been so excited, he's been traveling the country selling his big idea. But back home they say he can be arrogant.

"Are you a little, let's say cocky?" Stahl asked.

"When I have a vision, I get single-minded about it. I say, 'I'm going to continue to work on this until we get her done,' " Schweitzer said.

That cowboy bravado is just what you might expect from a guy who grew up roping calves on a Montana ranch.

"We have a little bit different way of looking at the world. And I think it's about self reliance," Schweitzer said.

And, yet, the cowboy is a bit of a geek who went to graduate school to study soil science. In the 1980s he went to work in Saudi Arabia - land of the sheiks - running farm projects.

Schweitzer says the Saudis embarked on an ambitious agricultural program to become self sufficient in food, to wean themselves off our wheat. Now, he wants to wean America off their oil.

He got into politics as a Democrat. But in his ads in the 2004 governor's race, he looked as un-like John Kerry as possible and even picked a Republican running mate.

In red state Montana, Schweitzer squeaked out a four-point win. But today he has a 65 percent approval rating, buoyed by his good ol' boy persona and his image making. That includes his dog, Jag, who goes with him everywhere, even on the state plane.

Now there's a fledgling online movement to draft Schweitzer into the next presidential race.

Schweitzer says "President Schweitzer of the United States" sounds a little silly to him. "I'm the governor of Montana. We have 920,000 people. This is the first office I've ever been elected to and I've only been here a year."

He may answer that question with an "aw shucks," but some Montanans complain that he does have his eye on the national stage.

"Right now he is the governor of Montana. He cannot turn his back on us looking for bigger and better things," said Helen Waller, who leads the Northern Plains Resource Council, a group of farmers and ranchers fighting the governor's coal-to-diesel plan.

"I think he has more of a perspective of trying to save the world. And that's a … good goal but you've got to start by pieces," said Waller.

One of the pieces, she says, should not be more mining. She points out that in the past, mining companies came to Montana, dug out the precious minerals and, despite their promises to clean things up, they left behind toxic eyesores.

"The place would be changed to the point where it wouldn't be like home any more," Waller said.

But Schweitzer says there's now a state law that requires mining companies to restore the land after the digging is done.

The governor showed Stahl a piece of land that used to be a mine but is now used for agriculture. He says he would force mining companies to restore the land after the mines are closed.

Mining companies have gotten around the law in the past so Waller thinks it's crazy to dig up the coal; instead Montana should be producing bio-diesel, a fuel made from plant seeds.

"We've got all that land there that can be used to produce bio-fuels and it is competitive," she said. "There's a better way! That's what I'm saying. Other states are way out ahead of us."

"Well maybe they don't have as much coal as you have," Stahl said.

"Well, that's probably the case," Waller acknowledged.

Asked why the money shouldn't all be invested in bio-diesel, Schweitzer said, "If we replaced all the acres of wheat, corn and soybeans that we export across America, you would only replace 15 percent of our diesel demands in this country. Do the math. It's not enough."

China is already working with Shell on Fischer-Tropsch projects in Asia but to build them in the United States, the governor has to raise investment money from private industry.

Who's in?

"Well no one's in yet. I haven't seen the check yet," said Schweitzer.

Asked why investors are reluctant, Schweitzer said: "Everybody wants to be the first one to build the second plant. Because that's the fact. Because the first plant is going to be a lot of engineering on the fly. So, there will be cost over-runs. I'm telling you."

Even people who like the governor say he's a big dreamer but nothing seems to discourage him. With his cowboy swagger, he just keeps pushing his plan for Montana, despite the obstacles.

"I have heard about synfuels 30 years at least," Stahl said. "Out here in the west. And it always seems to fail. The minute the price of oil comes down a little, these things just go into bankruptcy."

"If you believe the price of oil is going to drop back to $25 or $30 a barrel, you shouldn't walk away from this project. You should run," said Schweitzer. "But the overwhelming majority of the people who understand the oil market worldwide do not believe that we will spend much time below $30 a barrel. This is the right thing to do. We can do it. Let's get started."
By Miguel Sancho