Suit against Montana coal lease can go on

2011-01-10T09:49:00Z 2011-01-11T00:13:06Z Suit against Montana coal lease can go onThe Associated Press The Associated Press
January 10, 2011 9:49 am  • 

A state judge on Monday gave environmentalists a green light to press forward with their challenge of Montana's lease of 587 million tons of state-owned coal to a St. Louis company.

District Judge Joe Hegel rejected an attempt by the state and Arch Coal Inc. to dismiss the case and questioned whether the lease should have been awarded without an environmental review.

The ruling marks a setback for Gov. Brian Schweitzer, a Democrat who touted the deal with Arch as a milestone in efforts to mine Montana's vast but largely undeveloped coal reserves.

Under the deal, approved by the state Land Board last March, Arch acquired a 10-year lease on the Otter Creek coal reserves near Ashland for $86 million and future royalties. Schweitzer has said the project could be worth billions more in taxes and royalties over the coming decades if the mine is developed.

But four environmental groups that sued over the Land Board's approval claimed the lease should have been reviewed under the Montana Environmental Policy Act.

Attorneys for Arch and the state had argued that such a review must be done before mining, not at the leasing stage.

But Hegel said environmentalists had made a reasonable claim — that waiting until a mining application comes in might be too late to protect the constitutional right to a clean and healthful environment.

The state's reasoning, Hegel wrote, “would allow the Land Board to convert public property rights to private property rights, stripping away its special protections before even considering possible environmental consequences.”

The state-owned coal is interspersed with privately owned parcels that also have been leased by Arch. Combined, the tracts contain about 1.2 billion tons of coal that Arch hopes to mine for shipment to domestic utilities and customers in Asia.

Kevin O'Brien, a spokesman for Attorney General Steve Bullock, said his office was reviewing Hegel's ruling.

Arch spokeswoman Kim Link declined to comment directly on the case, offering, instead, a statement that touted the company's track record and coal's importance in “securing our national energy supplies.”

Plaintiffs in the case are the Northern Plains Resource Council, National Wildlife Federation, Sierra Club and Montana Environmental Information Center.

The groups say almost all the coal from Otter Creek would go to power plants that would emit billions of tons of carbon dioxide, a greenhouse gas that contributes to global warming.

Mark Fix, a southeastern Montana rancher and past chairman of the Northern Plains Resource Council, said Monday that a thorough review of the project — before leasing — is the only way to protect the Otter Creek Valley.

“After you lease, the decision has almost been made, and the state's received a bunch of money already,” said Fix, a rancher whose property would be bisected by a railroad proposed to serve Otter Creek.

“The citizens of southeastern Montana should not have to bear the impacts of coal mining, especially if this coal is going to Asia.”

A state judge Monday gave environmental groups an early victory in their challenge of a St. Louis company's plan to ramp up coal production in Montana with a new mine on state-owned reserves near Ashland.

The Montana Land Board, chaired by Gov. Brian Schweitzer, was sued after leasing the coal tracts near Ashland to Arch Coal Inc. without first studying the impacts of mining.

District Judge Joe Hegel indicated in his Monday ruling that environmental groups have a reasonable claim that waiting until later to do those studies could be too late.

He wrote that the state's reasoning "would allow the Land Board to convert public property rights to private property rights, stripping away its special protections before even considering possible environmental consequences."

The ruling doesn't stop the project, but leaves uncertain the fate of Arch's $86 million, 10-year lease. And it marks a political setback for Gov. Brian Schweitzer, a Democrat who touted the deal with Arch as a milestone in efforts to expand mining from Montana's vast but largely undeveloped coal reserves.

The Otter Creek coal tracts include more than a half-billion tons of state-owned coal interspersed with private parcels also leased by Arch. Combined, the tracts contain about 1.2 billion tons of coal — fuel the company has said would be sold for power generation in the U.S. and possibly Asia.

"The Otter Creek coal reserves would be developed in a responsible manner with ample opportunity for public participation throughout the process," Arch spokeswoman Kim Link said, adding that the project remains at the planning stage.

Schweitzer's press office referred questions on Hegel's ruling to the office of Attorney General Steve Bullock.

Bullock voted against the Arch deal as a member of the Land Board. But his office is now charged with defending that sale because its lack of environmental review was challenged on constitutional grounds.

Bullock spokesman Kevin O'Brien said the ruling was being reviewed but would give no further comment.

Plaintiffs in the case are the Northern Plains Resource Council, National Wildlife Federation, Sierra Club and Montana Environmental Information Center.

The groups say almost all the coal from Otter Creek would go to power plants that would emit billions of tons of carbon dioxide, a greenhouse gas that contributes to global warming. They want the lease sale reviewed under the Montana Environmental Policy Act.

Mark Fix, a southeastern Montana rancher and past chairman of the Northern Plains Resource Council, said Monday that a thorough review of the project — prior to leasing — is the only way to protect the Otter Creek Valley.

"After you lease, the decision has almost been made and the state's received a bunch of money already," said Fix, a rancher whose property would be bisected by a railroad proposed to serve Otter Creek. "The citizens of southeastern Montana should not have to bear the impacts of coal mining, especially if this coal is going to Asia."

A state judge on Monday gave environmentalists a green light to press forward with their challenge of Montana's lease of 587 million tons of state-owned coal to a St. Louis company.

District Judge Joe Hegel rejected an attempt by the state and Arch Coal Inc. to dismiss the case and questioned whether the lease should have been awarded without an environmental review.

The ruling marks a setback for Gov. Brian Schweitzer, a Democrat who touted the deal with Arch as a milestone in efforts to mine Montana's vast but largely undeveloped coal reserves.

Under the deal, approved by the state Land Board last March, Arch acquired a 10-year lease on the Otter Creek coal reserves near Ashland for $86 million and future royalties. Schweitzer has said the project could be worth billions more in taxes and royalties over the coming decades if the mine is developed.

But four environmental groups that sued over the Land Board's approval claimed the lease should have been reviewed under the Montana Environmental Policy Act.

Attorneys for Arch and the state had argued such a review must be done before mining, not at the leasing stage.

But Hegel said environmentalists had made a reasonable claim — that waiting until a mining application comes in might be too late to protect the constitutional right to a clean and healthful environment.

The state's reasoning, Hegel wrote, "would allow the Land Board to convert public property rights to private property rights, stripping away its special protections before even considering possible environmental consequences."

The state-owned coal is interspersed with privately owned parcels that also have been leased by Arch. Combined, the tracts contain about 1.2 billion tons of coal that Arch hopes to mine for shipment to domestic utilities and customers in Asia.

Kevin O'Brien, a spokesman for Attorney General Steve Bullock, said his office was reviewing Hegel's ruling.

Arch spokeswoman Kim Link declined to comment directly on the case, offering instead a statement that touted the company's track record and coal's importance in "securing our national energy supplies."

Plaintiffs in the case are the Northern Plains Resource Council, National Wildlife Federation, Sierra Club and Montana Environmental Information Center.

The groups say almost all the coal from Otter Creek would go to power plants that would emit billions of tons of carbon dioxide, a greenhouse gas that contributes to global warming.

Mark Fix, a southeastern Montana rancher and past chairman of the Northern Plains Resource Council, said Monday that a thorough review of the project — prior to leasing — is the only way to protect the Otter Creek Valley.

"After you lease, the decision has almost been made and the state's received a bunch of money already," said Fix, a rancher whose property would be bisected by a railroad proposed to serve Otter Creek. "The citizens of southeastern Montana should not have to bear the impacts of coal mining, especially if this coal is going to Asia."

 

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