BILLINGS – State officials said the Montana Land Board will vote Monday on whether to put up for lease a half-billion-ton coal reserve near the Wyoming border — a politically charged decision for Gov. Brian Schweitzer and the four other Democrats who make up the panel.
A Land Board vote to proceed could spark a backlash from environmentalists who supported the Democrats in last year’s election. That’s because mining the state-owned reserve would lead to the release of greenhouse gases when the coal is burned.
But coal royalties and other revenues would boost the state’s cash-strapped coffers by hundreds of millions of dollars in coming decades — leaving Democrats open to charges of economic obstructionism if they vote “no.”
After grappling with the issue for years, the board in November put off a decision for another month to seek public comment. Officials including Secretary of State Linda McCulloch, who sought the latest delay, say the time for a vote has come.
“There’s going to be a vote,” McCulloch said Friday. “But there’s a lot of sides to this. Number one, we have to fund the schools. There are jobs, good-paying jobs associated with this. There’s also issues about renewable resources and stewardship of the land.”
Neither McCulloch nor other members would reveal Friday how they plan to vote.
The Land Board, comprising the state’s top five elected officials, is responsible for managing state-owned real estate for the benefit of the school trust fund.
Schweitzer said his support for leasing depends on whether the price is high enough to “maximize the value for the people of Montana.”
The coal reserve is south of the small town of Ashland. It’s next to the Northern Cheyenne Indian Reservation, where support for mining has been mixed.
The state’s coal tracts are intertwined with an estimated 731 million tons of the fuel Great Northern Properties leased last month to Arch Coal Inc. of St. Louis.
Combined, the state and private property contains more coal than the United States burns annually. A state decision to move forward on leasing could potentially end more than a decade of hand-wringing over the coal tracts.
Once owned by the federal government, the state’s reserves were promised to Montana by the Clinton Administration as part of a 1996 deal that pre-empted construction of a contentious gold mine next to Yellowstone National Park.
Under pressure from environmentalists, Clinton’s interior secretary, Bruce Babbitt, later tried to back out of the deal. He cited “the potential for environmental disruption” if the coal were developed. The transfer finally took place in April 2002, under President George W. Bush.
Since Schweitzer took office in 2005, the state has moved steadily in sizing up the potential for Otter Creek — if not always quickly enough for development proponents.
The delay has allowed Schweitzer to promote his ambitious energy development agenda while largely steering clear of the growing drive by environmentalists to halt the mining and use of coal.
Even if the Land Board moves forward to seek lease bids, it would not seal the deal on Otter Creek.
The panel still would need to strike a lease agreement, and the chosen developer would need to sink an estimated $1 billion into a new mine and railroad to get the coal to market.