Texas Gov. Rick Perry is able to boast about job growth under his watch, noting that over 265,000 jobs, or nearly 37 percent of the jobs created nationwide since the summer of 2009, have been created in the Lone Star state.
He credits this growth to a few simple conditions: low taxes, a regulatory climate that is fair and predictable, and a legal system that limits frivolous lawsuits. According to the Wall Street Journal, nearly one-fourth of the 70 companies that left California this year relocated to Texas.
When new or relocating companies and investors survey the landscape and consider Montana, what do they see? Well, when it comes to natural-resource development, the landscape looks risky.
Recent headlines highlight two major resource development projects slogging through endless legal and regulatory challenges. Investment flees this kind of uncertainty, so Montanans interested in the future economic stability of this state should be wary of the signals we send.
Case study 1: The concept of the Tongue River Railroad was born nearly 30 years ago as a means of providing access to one of the world’s most expansive coal reserves located in southeastern Montana. Also born of this concept was the opposition group, the Northern Plains Resource Council. Tongue River and NPRC have been engaged in a pitched legal battle since the issuance of the first draft environmental impact statement in 1983.
The Surface Transportation Board issued its final EIS in 2007, which was again challenged by NPRC in 2010. Just last week, the Surface Transportation Board issued its final decision affirming that the EIS is sound and complete. NPRC has promised to continue to foist legal challenges.
Case study 2: In 2005, Montana Alberta Tie Ltd. filed an application for a Major Facilities Siting Act certificate of compliance for a transmission line extending from Great Falls to Lethbridge, Alberta. After three years, and tens of millions of private investment dollars spent developing the preliminary routing and environmental compliance documents, MATL obtained both state and federal approval to construct the project in a state-defined corridor. Since approval in October 2008, the MATL project has proceeded to final design, right-of-way acquisition, procurement of materials, and construction.
During easement negotiations in 2010, MATL was unable to resolve differences with a single landowner and was forced to exercise eminent domain to obtain the necessary easement in the approved corridor. MATL’s rights to exercise eminent domain — which were explicitly stated in the state-prepared EIS — were challenged by the landowner.
At the same time, controversy continued to simmer over NorthWestern Energy’s planned MSTI transmission line, which has yet to receive any state or federal permits or approvals.
Project in limbo
The controversies surrounding these two transmission projects spawned yet another opposition group: Concerned Citizens of Montana. Now six years after the MATL project was initiated, and nearly three years after the regulatory approvals were granted, Tonbridge continues to spend hundreds of thousands of dollars on attorneys trying to unwind a rogue District Court decision adverse to the project.
The common experience for Tongue River Railroad and Tonbridge Power is this: Even if you play by the rules, even if you follow the letter of the law, even if you engage with the public during a planning process, even if you get formal approval from the regulatory authorities, you are certain to face organized opposition whose sole intent is to frustrate project development to the point of financial starvation.
Make no mistake, if Montana opposition groups continue to force developers to spend as much on attorneys as they do on engineers, they’ll invest elsewhere, and Montana will be left clawing to develop the jobs and tax revenue for schools, roads, water, sewer, and other basic services we continually struggle to provide.
Gov. Brian Schweitzer has been a strong advocate for the development of Montana’s energy resources in general, and a supporter of these two projects specifically. We may need more of this type of political leadership if we are to exhibit the will and courage necessary to reform our regulatory environment and end the legal gamesmanship that threatens our future.