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Montana

Land ownership

Natural resource extraction varies widely from state to state. In Montana, extractive industries accounted for 4.6% of gross domestic product (GDP) in 2015.

Natural resource ownership in the U.S. is closely tied to land ownership. Land can be owned by citizens, corporations, Indian tribes or individuals, or governments (for instance, federal, state, or local governments). Many USEITI datasets only cover natural resource extraction on federal land, which represents 29% of all land in Montana.

The state of Montana chose to participate in an extended USEITI reporting process, so this page includes additional state revenue and disbursements data, as well as contextual information about state governance of natural resources.

Production

Energy production: The U.S. Energy Information Administration publishes a profile of energy production and usage in Montana.

Much of Montana’s crude oil and natural gas production is in northeastern Montana, in the Williston Basin, which includes the Bakken formation as well as the Baker/Cedar Creek field, which contains the nation’s largest single underground natural gas storage facility. (There are also natural gas wells in south central Montana.)

Montana’s coal reserves, which are the largest estimated recoverable coal reserves in the U.S., are mostly located in the Powder River Basin in southeastern Montana. Five large surface mines provide the bulk of Montana’s coal production, though it also has one sizable underground mine.

Montana has 25 hydroelectric dams and several utility-scale wind farms. The Montana Department of Environmental Quality maintains information about wind power in Montana.

Nonenergy minerals: In 2011, Montana’s nonenergy mineral production was valued at over $1.4 billion. For details about what minerals are extracted, see the USGS Minerals Yearbook for Montana.

The Energy Information Administration collects data about all energy-related natural resources produced on federal, state, and privately owned land.
Data and documentation

Coal

0 short tons of coal were produced in Montana in 2015.

Hydroelectric

9,707,652 megawatt hours of hydroelectric energy were produced in Montana in 2015.

Crude oil

28,561,000 barrels of crude oil were produced in Montana in 2015.

Natural gas

57,218,000 mcf of natural gas were produced in Montana in 2015.

Wind

1,962,330 megawatt hours of wind energy were produced in Montana in 2015.

Wood-derived fuel

12,547 megawatt hours of wood-derived fuel energy were produced in Montana in 2015.

The Office of Natural Resources Revenue collects detailed data about natural resource production on federal land in Montana.
Data and documentation

Coal

14,477,637 tons of coal were produced on federal land in Montana in 2015.

County production

Big Horn County Musselshell County Richland County Rosebud County Treasure County Big Horn County Musselshell County Richland County Rosebud County Treasure County
County production of coal in 2015 (tons)

Gas

13,773,524 mcf of gas were produced on federal land in Montana in 2015.

County production

Big Horn County Blaine County Carbon County Carter County Chouteau County Custer County Dawson County Fallon County Fergus County Glacier County Hill County Liberty County Phillips County Pondera County Powder River County Prairie County Richland County Roosevelt County Rosebud County Sheridan County Stillwater County Toole County Valley County Wibaux County Big Horn County Blaine County Carbon County Carter County Chouteau County Custer County Dawson County Fallon County Fergus County Glacier County Hill County Liberty County Phillips County Pondera County Powder River County Prairie County Richland County Roosevelt County Rosebud County Sheridan County Stillwater County Toole County Valley County Wibaux County
County production of gas in 2015 (mcf)

Oil

3,363,275 barrels of oil were produced on federal land in Montana in 2015.

County production

Blaine County Carbon County Carter County Dawson County Fallon County Garfield County Glacier County Liberty County Musselshell County Petroleum County Powder River County Prairie County Richland County Roosevelt County Rosebud County Sheridan County Stillwater County Toole County Wibaux County Yellowstone County Blaine County Carbon County Carter County Dawson County Fallon County Garfield County Glacier County Liberty County Musselshell County Petroleum County Powder River County Prairie County Richland County Roosevelt County Rosebud County Sheridan County Stillwater County Toole County Wibaux County Yellowstone County
County production of oil in 2015 (bbl)

The state government of Montana administers 5.2 million surface acres of land (about 5.6% of the state) and 6.2 million mineral acres. For detailed information about land ownership in each county, the Montana State Library maintains public and private land ownership maps.

In FY 2014, resources extracted on state land in Montana included:

  • 1,505,356 barrels of crude oil
  • 3,561 million cubic feet of natural gas
  • 4,465,582 short tons of coal

For details about natural resource extraction on state-owned land, see annual reports produced by the Mineral Management Bureau.

Revenue

Companies pay a wide range of fees, rates, and taxes to extract natural resources in the United States. What companies pay to federal, state, and local governments often depends on who owns the natural resources.

Natural resource extraction can lead to federal revenue in two ways: non-tax revenue and tax revenue. Most USEITI data is about non-tax revenue from extractive industry activities on federal land.
Data and documentation

Revenue from production on federal land by resource

When companies extract natural resources on federal lands and waters, they pay royalties, rents, bonuses, and other fees, much like they would to any landowner. This non-tax revenue is collected and reported by the Office of Natural Resources Revenue (ONRR).

For details about the laws and policies that govern how rights are awarded to companies and what they pay to extract natural resources on federal land: coal, oil and gas, renewable resources, and hardrock minerals.

The federal government collects different kinds of fees at each phase of natural resource extraction. This chart shows how much federal revenue was collected in 2015 for production or potential production of natural resources on federal land in Montana, broken down by phase of production.

Commodity 1. Securing rights 2. Before production 3. During production Other revenue
Oil and Gas
Oil & Gas
$25,511,367
$119,180 $1,159,562 Oil $20,147,570 Gas $3,410,667 NGL $69,723 $604,666
Coal
Coal
$39,853,384
$0 $112,460 $39,740,689 $235
Other products
Sulfur
$9,168
$0 $0 $9,168 $0
Phosphate
$4,227
$0 $0 $0 $4,227
Hardrock minerals
$97
$0 $97 $0 $0
All commodities
All commodities
$65,378,243
$119,180 $1,272,119 $63,377,817 $609,128

Most non-tax revenue collected by ONRR comes from counties with significant natural resources on federal land.
Data and documentation

All commodities

Companies paid $65,378,243 to produce natural resources on federal land in Montana in 2015.

Revenue collected by County

Beaverhead Big Horn Blaine Broadwater Carbon Carter Cascade Chouteau Custer Daniels Dawson Fallon Fergus Flathead Gallatin Garfield Glacier Golden Vally Granite Hill Lew And Clar Liberty Mccone Madison Meagher Musselshell Park Petroleum Phillips Pondera Powder River Prairie Richland Roosevelt Rosebud Sheridan Stillwater Sweet Grass Teton Toole Treasure Valley Wheatland Wibaux Yellowstone Beaverhead Big Horn Blaine Broadwater Carbon Carter Cascade Chouteau Custer Daniels Dawson Fallon Fergus Flathead Gallatin Garfield Glacier Golden Vally Granite Hill Lew And Clar Liberty Mccone Madison Meagher Musselshell Park Petroleum Phillips Pondera Powder River Prairie Richland Roosevelt Rosebud Sheridan Stillwater Sweet Grass Teton Toole Treasure Valley Wheatland Wibaux Yellowstone
County revenue in 2015

Federal tax revenue

Individuals and corporations (specifically C-corporations) pay income taxes to the IRS. Depending on company income, federal corporate income tax rates can range from 15–35%. Public policy provisions, such as tax expenditures, can decrease corporate income tax and other revenue payments in order to romote other policy goals.

Learn more about revenue from extraction on all lands and waters.

Revenue from natural resource extraction on federal, state, and private land is a significant source of revenue for state and local governments in Montana.

Download: Montana revenue streams (PDF)

In 2014, the state of Montana collected $446,883,245 in state revenue from natural resource extraction (this includes both tax and non-tax revenue). Counties also collect and distribute their own revenue from natural resource extraction.

State revenue stream Amount collected
Total $446,883,245
Oil & Natural Gas Production Tax $236,496,773
Coal Severance Tax $57,676,185
U.S. Mineral Royalties $36,991,806
Oil Royalty $20,014,889
Coal Gross Proceeds $18,812,015
Metal Mines Gross Proceeds $16,813,993
Metalliferous Mines License Tax $13,943,131
Abandoned Mine Land Fees $12,568,841
Coal Royalties $8,130,763
Wind Generation Property Tax $7,787,065
$3,948,000
This figure is estimated based on EIA data.
Oil & Gas Bonus Income $3,709,204
Oil & Gas Rental Income $3,035,589
Resource Indemnity & Ground Water Asssessment Tax (RIGWAT) $2,278,971
Gas Royalty $1,654,445
Miscellaneous Mines Net Proceeds $1,397,619
Oil & Gas Penalty Income $1,350,124
Condensate Royalty $165,897
Coal Rentals / Bonuses $49,515
Land Use Licenses Rental Income $14,810
Non-Metalliferous Mineral Leases Royalty Income $12,545
Non-Metalliferous Mineral Leases Rental Income $10,556
Oil & Gas Surface Damages $9,950
Oil & Gas Seismic Permits $5,688
Metalliferous Mineral Lease Rental Income $2,842
Metalliferous Mineral Lease Royalty Income $1,029
Land Use Licenses Royalty Income $1,000

Revenue sustainability

Bar graph comparing Montana natural resources revenues to total general fund revenue from 2011-2014. Over that period, total general fund revenue rose from just above $2 billion in 2011 to over $2.5 billion in 2014. Revenue from natural resources stayed relatively flat at a little more than $0.25 billion each year.

In 2014, natural resource revenue streams accounted for 17.4% of revenue collected by the Montana Department of Revenue. Over the last four years, Montana’s overall revenue has increased while revenue from natural resources has stayed relatively flat; the percentage of revenue from natural resources has decreased from 13.5% of total revenue that went to the state general fund in 2010 to 11.3% in 2014.

Tax expenditures

Tax expenditure programs are policy instruments that reduce state and local revenue through changes to the tax code (for example, tax credits, exemptions, preferential tax rates, or deferrals of tax liability).

In FY 2014, Montana had four programs related to the extractive industries, which reduced state or local revenue by a total of $60.5 million. Of that total, a tax holiday on new oil production cost Montana $55.9 million in unrealized tax revenue and tax holiday on new natural gas production holiday cost the state $2 million. The Montana Department of Revenue outlines tax expenditures in its biennial reports.

Disbursements

After collecting revenue from natural resource extraction, the Office of Natural Resources Revenue distributes that money to different agencies, funds, and local governments for public use. This process is called “disbursement.”

Most federal revenue disbursements go into national funds. For detailed data about which expenditures and projects from those national funds are in Montana, see nationwide federal disbursements.

ONRR also disburses some revenue from natural resource extraction to state governments. In 2015, ONRR disbursed $33,984,476 to Montana.

Data and documentation

State agencies distribute revenue according to the Montana State Code, which is defined by the legislature. In addition to receiving distributions from the state, counties also collect and distribute revenue from local taxes.

State fund Distribution
Total $446,883,245
General Fund $176,559,116
$133,478,180
County governments receive money from the oil & natural gas production tax, coal gross proceeds tax, metalliferous minerals license tax, and federal mineral royalties. 17 Montana counties received over $1 million in state distributions from natural resource revenue.
$34,725,031
This is a fund that funds common schools.
$28,838,092
This fund was established by the Montana State Constitution, which requires that 50% of coal severance tax revenue go to the trust fund before the remainder is distributed. The estimated balance at the end of FY 2014 was $963 million, and interest from the fund goes to projects related to economic development, water, and infrastructure projects.
State Share $12,276,757
State School Oil & Gas Distribution $11,773,273
Long Range Building $6,921,142
Oil and Natural Gas Conservation Account Tax $4,732,701
State Orphan Share Fund $3,583,888
State Natural Resources Projects $3,369,568
Montana University System $3,219,424
Public Land Trust $3,157,313
Shared Account $3,149,120
Board of Oil & Gas Conservation $2,505,508
State Natural Resources Operations $2,454,052
Coal Board $2,129,440
Hard Rock Debt Service $1,185,166
Natural Resources Operations $976,019
Park Acquisition Trust $732,488
Renewable Resource Debt Service $547,924
Hazardous Waste/CERCLA special revenue account $372,716
Environmental Quality Protection Fund $372,716
Groundwater Assessment Account $366,000
Cultural and Aesthetic Projects $363,360
Hard Rock Mining $348,578
CERCLA Debt Service $272,106
Coal & Uranium Program $250,000
Water Storage Special Revenue Account $150,000
Public Buildings $66,684
School of Mines $60,168
Pine Hills School $45,007
Montana State University Morrill $32,738
University of Montana $24,086
State Normal School $18,609
Agricultural Experiment Station $12,990
School for Deaf and Blind $8,840
Department of Transportation $7,468
Department of Natural Resources Conservation - Water Resources Division $5,659
Montana State University 2nd Grant $2,087
Veterans Home Income $1,913
Department of Fish, Wildlife, & Parks $210
Galen State Hospital $42

Saving and spending revenue from extraction

Many states choose to establish permanent mineral trust funds, which can help governments dependent on revenue from natural resources smooth revenue and investments across boom and bust cycles.

In Montana, the coal trust fund is the primary way that revenue from extractive industries is saved for future use. The fund was established by the Montana State Constitution, which also requires that 50% of coal severance tax revenues go to the trust fund. The coal trust fund had an estimated balance of $963 million at the end of FY 2014. Interest from the fund goes to economic development, water, and infrastructure projects. For more information, see the Montana Department of Revenue’s biennial reports.

Economic impact

The extractive industries play an important role in Montana’s economy — particularly in eastern Montana, where economic activity in the Bakken oil fields has a strong impact on local economies. To read more about the impact of extractive industries on Montana’s economy, see the Labor Day Report (PDF) from the Montana Department of Labor and Industry.

Because of relatively high annual wages (compared to other industries), extractive industries contribute a greater percentage of personal income than jobs. In 2014, personal income from extractive industries made up about 4.8% (or $1.2 billion) of all personal income in the state. The average annual wage in Montana in 2014 was $86,496, which represented 4.9% growth from 2013.

In addition to generating economic activity, extractive industries can have fiscal costs for state and local communities.

Data about each state’s gross domestic product comes from the Bureau of Economic Analysis.
Data and documentation

GDP (dollars)

In 2015, extractive industries accounted for 4.6% of Montana’s GDP, or $2,065,000,000

Wage and salary data, from the Bureau of Labor Statistics, describes the number of people employed in natural resource extraction that receive wages or salaries from companies.
Data and documentation

Wage and salary jobs

In 2015, there were jobs in the extractive industries in Montana, and they accounted for 1.7% of statewide employment.

County wage and salary jobs

Big Horn County Blaine County Broadwater County Carbon County Cascade County Dawson County Fallon County Fergus County Flathead County Gallatin County Glacier County Granite County Hill County Jefferson County Lake County Lewis and Clark County Lincoln County Madison County Missoula County Musselshell County Park County Pondera County Ravalli County Richland County Roosevelt County Rosebud County Sanders County Sheridan County Silver Bow County Toole County Valley County Yellowstone County Big Horn County Blaine County Broadwater County Carbon County Cascade County Dawson County Fallon County Fergus County Flathead County Gallatin County Glacier County Granite County Hill County Jefferson County Lake County Lewis and Clark County Lincoln County Madison County Missoula County Musselshell County Park County Pondera County Ravalli County Richland County Roosevelt County Rosebud County Sanders County Sheridan County Silver Bow County Toole County Valley County Yellowstone County
County employment in extractive industries (jobs, 2015)

Self-employment data, from the Bureau of Economic Analysis, describes people who work in natural resource extraction, but don’t receive wages or salaries because they own their own companies.
Data and documentation

Self-employment

In 2014, there were self-employed people working in the extractive industries in Montana.

The U.S. Census Bureau collects information about the top 25 exports in each state. In 2015, one or more natural resources ranked among the top 25 exports from Montana.
Data and documentation

Other nonenergy minerals

$346,800,000 worth of other nonenergy minerals was exported from Montana in 2015.

Coal

$123,040,000 worth of coal was exported from Montana in 2015.

Oil

$26,680,000 worth of oil was exported from Montana in 2015.

State governance

The state of Montana participated in additional reporting. As part of the USEITI process, the Independent Administrator gathered information about state and local natural resource governance, revenues, and disbursements in Montana.

State agencies

The state of Montana regulates extraction and interacts with extractive industry companies in Montana, particularly when they’re operating on state or private land.

The Montana Department of Revenue collects, manages, and distributes revenue from companies engaged in extraction of oil, natural gas, coal, and non-energy minerals in Montana. It publishes biennial reports and other tax related reports. County governments also collect many property taxes.

The Montana Department of Natural Resources and Conservation manages Montana’s natural resources, including administering state trust lands and distributing revenue from state trust lands.

The Montana Department of Environmental Quality leads Montana’s planning, permitting, compliance, enforcement, and remediation efforts for projects and incidents related to air, water, land, and energy.

  • The Air, Energy, and Mining Division is charged with protecting the quality of Montana’s air, water, and land. Its responsibilities and roles include:
    • Issuing air quality permits for oil and gas wells
    • Issuing permits and monitoring compliance for projects relating to coal and hardrock mines
    • Determining correct control measures and establishing requirements to ensure compliance with laws and regulations
    • Providing technical assistance in bringing violations back into compliance
    • Preparing enforcement requests for the Enforcement Division
    • Holding and reviewing reclamation bonds for coal and hardrock mining
  • The Waste Management and Remediation Division administers and oversees investigation and cleanup of extraction sites that need remediation, including state and federal superfund sites and Montana’s abandoned mine land projects.

State laws and regulations

The Constitution of the State of Montana includes environmental protections, including a right to a “clean and healthful environment,” and provisions for environmental protection, improvement, and reclamation.

The Montana Code Annotated (MCA) has several sections that govern natural resource extraction:

  • Title 82: Minerals, Oil, and Gas includes statutes related to minerals, oil, and gas.
  • Title 15: Taxation covers taxation. See chapters 35 (Coal Severance), 36 (Oil & Gas Production Tax), 37 (Mining License Taxes), and 38 (RIGWAT Tax).
  • Title 77: State Lands covers state lands. See Chapter 3 (Rock, Mineral, Coal, Oil, and Gas Resources).
  • The Montana Environmental Policy Act (MCA §75-1-101, et seq.) aims to ensure environmental impacts are considered in state planning (including environmental impact statements).
  • The Clean Air Act of Montana (MCA § 75-2-101, et seq.) seeks to “achieve and maintain levels of air quality that will protect human health and safety and, to the greatest degree possible, prevent injury to plant and animal life.”
  • The Water Quality Act (MCA §75-5-101, et seq.) aims to “conserve water by protecting, maintaining, and improving the quality of water” throughout the state and to “provide a comprehensive program for the prevention, abatement, and control of water pollution.”
  • The Montana Metal Mine Reclamation Act (MCA §82-4-301, et seq.) provides for reclamation of hard rock and metal mines.

The Administrative Rules of Montana also regulate natural resource extraction:

  • Title 36: Natural Resources and Conservation covers the Department of Natural Resources & Conservation. See chapters 19 (Reclamation and Development Grants Program), 22 (Board of Oil & Gas Conservation), and 25 (State Land Leasing).
  • Title 17 Environmental Quality covers the Department of Environmental Quality. See chapters 8 (Air Quality), 24 (Reclamation), and 30 (Water Quality).

Fiscal costs of extractive activity

In addition to generating revenue and economic activity, extractive industries can bring costs to state and local communities. In Montana, these costs are concentrated in eastern Montana because of extraction from the Bakken Formation in Montana and neighboring North Dakota. For more extractive industries’ effect on this region, see the Eastern Montana Impact Coalition’s Regional Impact Analysis (PDF).

The USEITI Multi-Stakeholder Group prioritized four types of fiscal costs:

Transportation

The Montana Department of Transportation estimates an additional $52 million per year in increased pavement needs for highways in eastern Montana because of extractive industry activity. Local governments in eastern Montana also saw increases in budgets for streets and roads increase 44% to 345% from 2000 to 2013.

To read more, see the Montana Department of Transportation report (PDF) on efforts to respond to impacts on the state highway system from oil exploration and production in eastern Montana.

Water

Surveyed communities in eastern Montana reported that water rates increased an average of 86.4% from 2011 to 2014 and sewage rates increased 302.9%. The Eastern Montana Impact Coalition also estimates that $33.8 million to $80.6 million will be needed for incremental improvements to support growing demand on water, sewage, and transportation systems. These figures don’t include large projects.

The Department of Environmental Quality plans, monitors, assesses, and enforces water quality in Montana. It performs targeted water quality monitoring related to oil and gas development in eastern Montana and coal mining near Lake Koocanusa, runs the Montana Ground Water Pollution Control System and its permitting process, and produces Clean Water Act Integrated Reports.

Emergency services

Increased population near extraction can increase demands on emergency services. Law enforcement at multiple jurisdictional levels in eastern Montana have seen costs rise related to increases in oil and gas activity.

The State Highway Patrol added a new detachment in eastern Montana, county sheriffs’ offices have seen costs rise $13.4 million, and surveyed police departments have seen an average budget increase of 128.9% between 2000 and 2013. Surveyed local governments also reported an average increase of 169.2% in emergency spending from 2000 to 2013.

Reclamation

Montana has been “certified” by the federal Abandoned Mine Land Reclamation program, meaning that it has reclaimed its identified high-priority abandoned coal mine areas. Current projects include addressing acid mine drainage in the Great Falls coal field, which is projected to cost $96 million, and managing subsidence events and potential subsidence in Red Lodge.

To learn more, find Annual Evaluation Reports for Montana in the Office of Surface Mining Reclamation and Enforcement Oversight Document Database or learn about the bonding of active mines in the Coal Program Annual Report.

The Conservation and Resource Development Division of the Department of Natural Resources and Conservation runs the Reclamation and Development Grants Program to fund projects that “compensate Montana citizens for the effects of exploration and mining on Montana lands.”

The Montana Department of Justice Natural Resources Damage Program administers grants for the restoration of the Upper Clark Fork River Basin’s natural resources “due to mining and mineral processing operations.” Between 2000 and 2011, the governor approved 121 projects totaling $121 million.