History of Energy in Montana

Montana's Energy History


Smith Mine No. 2 in Carbon County during the pre-World War II era

Like all of Montana’s energy resources, the presence of coal formations are a function of comparatively recent political boundaries set off against a backdrop of geological events that occurred over millions of years.

Coal of varying grades and thicknesses underlies vast swaths of Montana. Perhaps 13 percent to 25 percent of known recoverable U.S. reserves can be found in the state. Within Montana’s 147,000 square miles, coal deposits underlie about 51,300. Major deposits are in the eastern two-thirds of the state and are largely soft-grade lignite of the massive Fort Union deposit in the northeast. Sub-bituminous coal shares qualities of both lignite and the harder bituminous grade. This coal is found throughout southeastern and north-central Montana. Bituminous coal is found in smaller fields in west-central and south-central Montana, including around Great Falls, Bozeman, and Red Lodge. 

In general, the softer-grade deposits can be found in extended unbroken seams relatively close to the surface. The bituminous deposits tend to be deeper and are subject to geologic fracturing. Historically, the bituminous reserves have been accessed by underground mines while the lignite and sub-bituminous reserves have been strip-mined.

Early Observations

Not surprisingly, coal in present-day Montana was documented by the earliest white explorers of the region. Captain William Clark on the return trip through what is now Montana, led half of the Lewis and Clark Expedition down the Yellowstone River, passing within perhaps 50 miles of the coal beds of what is now known as the Rosebud field, part of the larger Fort Union Formation in the Powder River Basin.

The following excerpt is from Clark’s Yellowstone River journal from the summer of 1806:

In the evening I pass Starters of Coal in the banks on either side … bluffs about 30 feet above the water and in two vanes [veins] from 4 to 8 feet thick, in a horizontal position. This coal or carbonated wood is like that of the Missouri [River] of an inferior quality.

He further recorded in his journal the “first appearance of birnt hills which I have seen on this river.”

This is a notable observation. Many of the red-capped bluffs and buttes of eastern Montana are residual records of tens of billions of tons of coal that have burned naturally during at least the past four million years in today’s Powder River Basin. Most interpreters of the Lewis and Clark journals believe this is what the captain was referring to on that day. Geologists sometimes refer to these formations as “clinker caps”; the burned material resists erosion more effectively than surrounding rock and sometimes forms impressive spires. One geologist estimates:

The total amount of coal burned by natural fires in the last [two million years before present] is one to two orders of magnitude greater than the total amount of coal removed by mining in the past century. However, current annual rates of coal mining are three to four orders of magnitude greater than estimated prehistoric annual rates of coal consumption by natural fires.

Even today, coal deposits occasionally catch fire from lightning strikes, range fires, and even through spontaneous combustion. The seams can burn for years and are difficult and expensive to extinguish.

The possible magnitude of the region’s coal resource probably meant little to early white and native visitors to the region since wood, and to a lesser extent buffalo dung, was the primary fuel source of that era. Steamboats of the mid-19th Century were built with firebox grate configurations designed to burn reliable wood found along river bottoms, up to 30 cords per day when running against the current. The military surveyor Captain John Mullan in the late 1850s only casually noted the presence of coal along the Missouri River adding a “coal oil spring is said to exist on the Big Horn River.”

Pioneer Era

The annual federal Statistics of Mines and Mining compiled for the western states and territories for 1873 and 1875 indicated limited seasonal coal extraction in the Big Hole Valley, at Mullan Pass west of Helena, at Fort Benton, and at Belt along the Missouri River. During this time so-called "wagon mine" coal was probably used principally to forge iron for blacksmithing and home use in nearby towns. A deposit on Bozeman Pass was identified in these early statistics and was noted for its “bituminous variety.”

Col. James Chestnut was the proprietor and promoter of one of these coal deposits and promoted the product in the pioneer town of Bozeman, with little result in the early years. “It takes two cords of wood to make one cord of coal to burn,” wrote Chestnut’s sometime partner J.V. Bogert in 1874. By the end of that decade the coal sold for $5.50 per ton at the mine mouth and $9 per ton after haulage to town. Despite its tentative beginnings, Chestnut’s mine at Timberline on Bozeman Pass is credited as the first commercial coal mine in the state.


Railroad planners became interested in local coal to build steam for locomotive power and early surveys in Montana Territory often included geologists on the lookout for available deposits. Washington Territory Gov. Isaac I. Stevens formed a survey in 1853 to investigate a northern route for a transcontinental railroad. Perhaps more pragmatically, in 1880 the geologists of the Hayden and Transcontinental Survey visited the region in the course of a general reconnaissance of the Northwest, a chief object of the exploration being to secure information concerning coal resources. Available fuel was a main consideration in the planned routes of these early rail endeavors, although steam locomotives, like the steamboats, burned wood in the initial phases. A rule-of-thumb formula in this early era was that each locomotive would be expected to burn 800 cords of wood per year. The greater heat value of even soft coal over wood was well understood and by 1880 more than 90 percent of American railway fuel was coal. Cured wood fuel delivers roughly 3,000 BTUs per pound; bituminous coal is 10,000 BTUs per pound or hotter. Coal allows a steam rail locomotive to pull harder and travel farther. The existence of valuable coal deposits in the Great Falls region was clearly recognized by the Hayden survey as were lesser quality deposits near present-day Lewistown, and in the Bull Mountains.

The narrow-gauge Utah & Northern (later Union Pacific) was the first railroad to reach Montana, in 1880, near today's Monida Pass. The line connected to Butte the following year. The railroad out of Ogden, Utah was largely financed by Jay Gould. Initially wood-fired steam, the railroad soon switched to coal (and eventually to standard gauge in 1887). The Northern Pacific Railroad bridged the future state from east to west in 1883 and earned large federal land grants. James J. Hill’s Great Northern Railway incrementally entered the state from the east along the Hi-Line in 1889. That road extended to Stevens Pass on the Continental Divide the following year. Northern Pacific and to a lesser extent Union Pacific formed coal mining companies to exploit the deposits at Timberline on Bozeman Pass and by 1885 more than 83,000 tons per year was mined there, mostly for rail transportation. Great Northern launched a coal subsidiary in 1888 at Sand Coulee outside of Great Falls to provide for its northern Montana operations. As a comparative latecomer in 1908, the Chicago, Milwaukee, & St. Paul (Milwaukee Road), secured locomotive coal from mines in the Bull Mountain Coal Field south of Roundup. According to a report commissioned by the Department of Environmental Quality, Milwaukee Road subsidiaries produced about 1.2 million tons from the Bull Mountain field in 1918. Most rail locomotives were fueled by coal well into the Twentieth Century when oil became more prevalent.

Industrial Uses

By 1880, use of coal in Montana was growing to include more industrial uses – principally ore processing – in addition to commercial and domestic home heating. Non-transportation industrial use would grow significantly over the next quarter century with the rise of copper smelting and refining in the Butte-Anaconda district and at Great Falls. A coal field south and east of Great Falls was a significant producer for these industrial applications well into into the early twentieth century. This bituminous deposit runs some 60 miles in an east-west direction, continuing from Cascade County into Judith Basin and Fergus Counties. The Sand Coulee Basin, near the western end of the field was the source of most of the commercial production. The Anaconda Company’s predecessor developed a coal mine at Belt in 1894 to supply reduction, smelting, and refining operations in Butte, Anaconda, and Great Falls. The Anaconda Company would continue major coal production out of the Sand Coulee-Belt fields through 1913, with limited output continuing into the early 1920s.

Engraving of Sand Coulee works, circa 1889, Great Falls Leader


Coal deposits at Cokedale and Aldridge in Park County, as well as the deposits at Timberline on Bozeman Pass, also produced limited but comparatively high quality coal for Anaconda’s mineral reduction needs at the turn-of-the-century in Montana. Much of this coal was coked at the town of Electric and shipped by rail.

The part of the Fort Union coal formation that extends into south-central Carbon County at Red Lodge was also active by the late nineteenth century. Production there would extend well into the mid-twentieth century. Multiple beds were identified in the formation, totaling 50 to 100 feet thick. Most of the famous Washoe Mine’s production over the decades was part of the Anaconda Company’s portfolio with most destined for industrial use in Butte and Anaconda.

The use of coal for mineral reduction declined early in the twentieth century at least partially as hydroelectric dams came online along the Missouri River. Electric furnaces and smelters came into use as well as electrolytic refining of copper at Great Falls.

Early Twentieth Century

Northern Pacific operated the Rocky Fork mines near Red Lodge for its own transportation use through the early 1920s. But the railroad held land grant properties in the Forsyth field of the larger Fort Union formation near present-day Colstrip. The Northern Pacific sponsored geologic investigations of the region as early as 1913, which indicated a major reserve averaging 28 feet in thickness with little overburden. A subsidiary was formed (Northwestern Improvement Company) and strip mining began in 1924 near the new company town of Colstrip. Output per man-hour was soon five times that of the railroad’s Red Lodge coal mines. The cost to produce was so low, the railroad delayed the transition to oil-powered steam, and eventually diesel, until the mid-1950s. Strip mining in Colstrip ended with this transition.

Milwaukee Road subsidiaries continued to mine the Bull Mountain coal deposits throughout the 1920s and 1930s. Coal for general rail transportation was initially affected by electric-powered lines such as the Milwaukee Road’s route between Harlowton and Avery, Idaho. Later, transportation coal was more widely eclipsed by the use of fuel oils, first for steam and later for the diesel-fueled electric locomotives in use today. The Milwaukee replaced the last of its steam locomotives with diesels in the 1950s and major coal production at Roundup ended in 1963.

Some municipal and industrial electricity was also generated from small coal-fired plants in Montana before the turn of the century. Some coal was converted into producer gas for street lighting as well. A steam generator plant owned and operated by the Butte Electric Light and Power Company was valued at more than $1 million as the company merged with General Electric in 1893. Most of these types of facilities were rendered idle as hydropower became more generally available in the first two decades of the century.

Smith Mine near Bear Creek, Carbon County


The history of coal extraction in Montana was tied very heavily to local and regional markets for industrial, transportation, commercial, and domestic use. These markets were comparatively strong in the 1920s with another burst of activity during the war years of the 1940s. The Smith Mine between Bear Creek and Red Lodge Peak was in high production during early 1943 when an explosion and resulting entrapment killed 75 men. Production statewide was in the 5 million ton-per-year range during World War II, compared to the roughly 40 million tons produced in recent years. By 1958, production dropped to 305,000 tons as electricity, natural gas, and diesel fuels effectively displaced coal in the industrial, commercial, and domestic sectors. Production would not rise significantly until coal-fired electric generators started to come online in the late 1960s. Environmental Protection Agency rules on sulfur emissions in the 1980s triggered rising exports of Powder River Basin coal, first to generation stations in the U.S. and later for export overseas.

Works consulted

Journals of the Lewis & Clark Expedition, R. Gold Thwaites, editor, 1905

Heffern, E.L. and Coates, D.A., Geologic History of Natural Coal-Bed Fires, Powder River Basin, International Journal of Coal Geology, Vol. 59, Issues 1 and 2, 2004

Miners and Travelers Guide, John Mullan, New York, 1865

McDonald, R. and Burlingame, M. Montana’s First Commercial Coal Mine, Pacific Northwest Quarterly, January, 1956

Fisher, C., Geology of the Great Falls Coal Field, U.S.G.S. Bulletin 356, 1909

White, J.H., A History of the American Locomotive: Its Development, 1830-1880, 1979

Calvert, W.R., Geology of the Lewistown Coal Field, Montana, U.S.G.S., 1909

Malone, M., et al, Montana: A History of Two Centuries, 1976

Cascade County Historical Society, The Cascade County Album: Our History in Images, 1999

A Handbook of the Montana Coal Severance Tax, Montana Legislative Council, 1988

Rossillon, M., et al, Great Falls Coal Field: Historic Overview, 2009

Combo, J., et al, Coal Resources of Montana, U.S. Geological Survey, Washington, D.C., 1949

Roberts, A., Geology and Coal Resources of the Livingston Coal Field, U.S.G.S., 1966

Bryson, R.P., The Coalwood Coal Field Powder River County, Montana, Geological Survey Bulletin, 1951

Kirk, C., A History of the Montana Power Company, 2008