Today in New West news: license granted for $1B, 400-MW storage project in Montana as Reed Point wind farm gets NorthWestern contract; Denver energy company declares bankruptcy, and conservation plan finalized for desert tortoise habitat in southern Utah.
According to the Billings Gazette, Bozeman-based Absaroka Energy has been granted a license to build a $1 billion, 400-megawatt power storage project in central Montana on 177 acres near the census-designated place of Martinsdale. The license is valid for 50 years. From the Gazette:
The facility, called the Gordon Butte Pumped Storage Project, would use excess power produced by wind farms or other sources to pump water uphill to a 3,000-foot long reservoir, according to the license.
During times of peak consumer electricity demand or when the wind is not blowing, the water would be released to turn hydropower turbines and keep electricity flowing.
Federal energy officials have said Montana has enormous potential for wind power development, with more than 665 megawatts of capacity already installed, according to the American Wind Energy Association. Projects such as Gordon Butte would help ensure a steady flow of power needed to make the grid run smoothly.
Water for the electricity generating project would be drawn from Cottonwood Creek, a tributary of the Musselshell River, via an existing irrigation system for a nearby ranch.
The project is located near a pair of large transmission lines that originate in Colstrip about a four-hour drive from Martinsdale. The Colstrip lines connect with the Bonneville Power Administration transmission system, which provides power across the Pacific Northwest.
Absaroka Energy President Carl Borgquist said his company’s efforts will now turn to engineering work to solidify a construction schedule and costs estimated last year at $986 million. The company is also seeking financing, with construction expected to begin no earlier than 2018, he said.
Governor Steve Bullock, along with Montana’s U.S. Senators Steve Daines and Jon Tester, issued statements in support of the project.
Keeping with Montana energy, according to the Billings Gazette, a wind farm projected for north of Reed Point has landed a 25-year contract with NorthWestern Energy. Under the contract, Billings-based WKN Montana will construct 25 to 35 turbines, providing 80 megawatts of wind energy at $37.65 a megawatt hour. It’s enough power for 19,000 to 30,000 homes.
Down in Colorado, according to the Denver Business Journal, Denver-based Bonanza Creek Energy Inc. has announced it will file for Chapter 11 bankruptcy protection “on or prior to January 5, 2017.” The firm is the latest Colorado oil/gas company to find itself approaching bankruptcy court, per the DBJ:
“During 2016 we have been working diligently to reduce our cost structure and improve operating efficiencies under our commitment to rapid continuous improvement initiatives. The Restructuring Support Agreement announced today further increases our competitive position with significant improvements in firm transportation commitments, a comprehensive elimination of more than $850 million in unsecured balance sheet principal, accrued interest, and prepayment premiums, and a concurrent injection of $200 million in equity to fund our go-forward development plan. Effected by way of a proposed prepackaged chapter 11 filing, this represents the culmination of countless hours of hard work from various parties to resolve legacy encumbrances that restricted our access to liquidity and constrained asset development,” said Richard Carty, CEO, in a statement.
In June, Warren Resources (Nasdaq: WRES) filed for bankruptcy, which followed in the footsteps of other Denver energy companies filing for bankruptcy this year, including Emerald Oil company, which filed for bankruptcy protection in March, St. Anselm Exploration Co., a Westminster-based oil and gas firm that filed for bankruptcy protection in April, and Venoco Inc., which filed for bankruptcy protection in March.
Finally, over in Utah, we previously reported that the Bureau of Land Management had finalized a series of costly deals for private land tucked in the 61,000-acre Red Cliffs Desert Reserve, which will be made into a national conservation area for desert tortoises. Now, according to the Salt Lake Tribune, the BLM has released its final management plans for its proposed NCAs, which has some locals balking:
While the BLM made some concessions to local and state officials while crafting the final plans for the Beaver Dam Wash and Red Cliffs conservation areas, it did not budge on its refusal to designate a major transportation route across tortoise habitat just north of this fast-growing metro area.
“That doesn’t mean it’s done. I’m sure it will end up in federal court at some time,” said Mayor Chris Hart of Ivins, a town near what would be the western terminus of the “northern transportation corridor.”
Ivins said locals feel the route was part of the 2009 omnibus bill that established new NCAs and wilderness in Washington County. “We don’t have a lot of options for crossing this county east to west.”
Hart was among several local officials who formally protested the BLM’s preferred Red Cliffs alternative, identified in an environmental impact state released earlier this year.
In resolving protests concerning the transportation corridor, the BLM conceded that a multi-lane highway would spur economic activity and employment and reduce traffic pressure elsewhere. But forging such a major artery “would negatively impact a majority of the unique resources that the NCA was created to protect and their nonmarket values,” the agency concluded.
Still, the door is not closed on the transportation corridor; it just has a very high threshold to win approval should the county seek a right of way, according to Brian Tritle, the BLM’s St. George field office manager.
“It won’t be easy; it should be tough,” Tritle said. “We have an avoidance area. What this means is we prefer not to route a road here. In this case it is critical habitat for Mojave desert tortoise and it’s in an NCA with myriad interdisciplinary conservation values. … We all know folks are coming to Washington County. It’s not only for affordable houses. It’s the views, it’s the access to recreation and the other things the NCA provides.”