Montana Land Board Delays Decision on Coal Leases

By Beacon Staff

HELENA – Montana’s Land Board said Monday it will wait at least another month to decide on leasing vast state-owned coal tracts — a development plan either decried as a “global crime” or lauded as a boon to the state’s economy.

The five statewide elected officials — all Democrats from the governor down — face a decision ripe with political consequences. The board members must decide what to do with more than half a billion tons of coal beneath 9,500 acres of land near Ashland just as private development plans gain steam.

Developing coal would certainly anger conservationists, a core Democratic constituency. But opposing the development in the midst of a recession could be hard to explain to voters.

With supporters and opponents of the coal deal anxiously waiting, the board decided Monday to postpone its decision until December.

“I do believe that it is appropriate for the public to have a little more time to look at this and make comments,” said Secretary of State Linda McCulloch, who made the motion to delay.

Environmental groups and opponents pressured the board during public comments to delay a decision.

“I am really afraid of the idea of the leaders I helped elect — I actually voted for all of you — would go ahead and create a giant new strip mine in Montana,” said Helena resident Jonathan Matthews. “As a citizen of Montana, I want my leaders to do the right thing.”

The issue came to a head last week when adjacent parcels of privately owned coal were leased to the nation’s second-largest coal mining company, Arch Coal Inc. of St. Louis. The move stepped up pressure on the five-member Land Board, made up of the state’s top five elected officials and chaired by Gov. Brian Schweitzer.

Arch plans to use the coal to serve power plants in the northern U.S. and provide future supplies the company to expand into coal markets in the Pacific Rim.

The newly leased reserves contain 731 million tons of coal. Combined with Montana’s tracts containing 572 million tons, the 1.3 billion tons of reserves in the Powder River Basin amount to more coal than the entire United States burns in a year.

Developers say, however, that the state must OK development on its land because the coal tracts are arranged in a checkerboard fashion.

Arch is paying Great Northern Properties a front-end bonus of $73.1 million for the leases, and royalty payments could top $1 billion over the next 40 years if a mine is developed.

Land Board members approached after the meeting remained coy about which way they are leaning on the deal.

State Auditor Monica Lindeen said she needs to make sure the price is right and that environmental concerns on such issues as water quality are met.

McCulloch said neither opponents nor supporters are addressing the only issue the Land Board is legally required to deal with: The board is charged with managing state lands to benefit school coffers, she noted.

McCulloch, previously the superintendent of public instruction, said she will be doing more research.

Schweitzer said Attorney General Steve Bullock raised some good points in looking at the fine print on the proposed lease deal. And he noted the state has not leased coal since 1995, so needs more time to make sure it’s done right.

“I think we should measure twice and cut once,” the governor said.

But Schweitzer stopped short of saying that means leasing the Otter Creek tracts is imminent once the details are worked out on proposed language and pricing.

“In general, I am a supporter of coal,” Schweitzer offered, without making a commitment on whether he will ultimately support the plans.

Bullock said Otter Creek faces other hurdles, like separate state and federal environmental rules, increased national concerns over coal and an uncertain market.

“The final chapters won’t be decided next month, or the month after, because there is a long process involved in all of this,” the attorney general said.

Supporters hope the board will agree to move forward.

“You hold a key to opening the economy for southeastern Montana,” said Don McDowell, Powder River County commissioner. “You hold the key that would bring good paying jobs to our communities. Please open this door for us.”