North Fork Mining Ban Deadline ‘In Doubt’

By Beacon Staff

The historic agreement banning natural resource development along the North Fork Flathead River, signed by Montana Gov. Brian Schweitzer and British Columbia Premier Gordon Campbell earlier this year, contains language saying the retirement of oil, gas and mineral leases must be completed by July.

It is a deadline, Schweitzer acknowledged last week, “in doubt.”

At issue is compensation, which could range as high as $17 million, due to two mining companies – Max Resource Corp. and Cline Mining Corporation – for investments they made exploring for gold and coal in the Canadian Flathead, prior to the B.C. ban. While the mineral leases on the U.S. side have not been shown to be worth much, the resources beneath the ground on the Canadian side are worth billions, making the mining ban a bigger sacrifice for B.C.

It’s currently unclear what the actual costs will be until the British Columbia provincial government provides the information, based on invoices and other evidence from the mining companies. But the language in the Memorandum of Understanding, signed Feb. 18, states that steps to halt mining and drilling in the Flathead River basin are, “subject to agreement on the equitable disposition of the financial implications of this action for the Province of British Columbia respecting existing mining and coal tenure holders.”

“We don’t know what the number is,” Schweitzer said of the sum owed the two mining companies. “The highest number I’ve heard is $17 million.”

Though Schweitzer does not think funds will be available to pay Cline and Max Resource by July, he said that circumstance in no way detracts from the strength of the Memorandum of Understanding between Montana and B.C., nor does it lessen the commitment to protect the Flathead on both sides of the border.

“These MOUs are as binding as any act of Congress,” Schweitzer said. “The federal government, in the past, has paid millions in similar deals.”

The Montana governor traveled to Vancouver last week to meet with Campbell during Canada’s Western Premiers’ Conference, where Schweitzer said the two leaders discussed the missed deadline, and he was forthright about the lack of funds. Gary Doer, Canadian ambassador to the U.S., and David Jacobson, the U.S. Ambassador to Canada, were present at the meeting.

“It would be disingenuous to say we have a solution because we don’t and those are the facts,” Schweitzer said. “But we haven’t given up.”

“Ottawa and Washington D.C. haven’t decided the way forward,” he added. “It has been four months and we haven’t been able to find a solution yet.”

According to Schweitzer following the meeting, both he and Campbell agreed that the progress made toward retiring the leases over the last four months has been substantial and represents a good faith effort on both sides.

“It’s taken us 30 years to get to where we’re at,” Schweitzer said. “About 98 percent of what we were attempting to accomplish has been accomplished.”

“We’ve agreed that we’re staying on the timeline,” he added.

In March, Montana Sens. Max Baucus and Jon Tester introduced legislation preventing any new oil and gas lease from being issued in the North Fork, and since then energy companies Chevron and ConocoPhillips have voluntarily retired their interest in leases covering nearly 200,000 acres in the area. Shortly afterward, the state Land Board passed a resolution restricting mining and drilling along the North Fork, south of the U.S.-Canadian Border. At the local level, Flathead County is working toward amending zoning regulations regarding gravel pits in the North Fork to comply with the language of the mining ban.

North of the border, the British Columbia government signed a law in February reversing a land-use plan for the Canadian Flathead that gave priority to mining and drilling over other uses.

These efforts, according to Schweitzer, demonstrate that a push to permanently protect the Flathead from mining and drilling is well underway, even though the federal government has yet to provide funds for Cline and Max Resource, primarily because the actual costs are still unclear.

“There are two moving parts that are really kind of beyond our control,” Schweitzer said.

Inquiries by the Beacon to Campbell’s administration as to his reaction to the missed deadline, and when the costs due Cline and Max Resource would be known were unavailable as of press time, because, according to a spokesman, the B.C. minister of state for intergovernmental relations, Naomi Yamamoto, was unavailable for comment.

Schweitzer made headlines earlier this month when he was quoted telling the Canadian consul general, “our federal partners have let us down,” regarding funding to pay Cline and Max Resource. Staff for Baucus and Tester were quick to respond that until the costs were clear and well documented, the two senators would not be able to secure taxpayer dollars to compensate the corporations, despite their commitment to protecting the North Fork.

Schweitzer, however, showed no signs of backing off his earlier comments when asked if they were overly harsh or premature.

“No federal agency has assured us that they have a compunction of moving forward,” Schweitzer said. “We’re going to continue to push.”

The governor also noted, based on the 1988 circuit court ruling in Conner v. Burford, that many of the leases granted in the North Fork were done so illegally, which gives the Secretary of the Interior authority to cancel them. On March 15, Schweitzer sent a letter to Interior Secretary Ken Salazar urging him to do so.

In a May 26 posting, the blog Left in the West reported on a rumor that Whitefish Republican state Sen. Ryan Zinke was planning to introduce a bond measure in the next Legislature to compensate the B.C. mining firms for their sunk costs if an agreement had not been reached on the payment by then. Reached last week, Zinke said he hasn’t been involved in any negotiations and would need to learn more about the issue, but that he would contact Schweitzer to discuss such a measure if it is still necessary next year.

“I haven’t talked to the governor’s office on options, but it’s not out of the realm of possibilities and I’d certainly consider it,” Zinke said. “If we can’t figure something out, then I would work with the governor to move on something.”

Nor are members of the conservation community in the Flathead alarmed by the missed deadline. Will Hammerquist, Glacier program manager for the National Parks Conservation Association, noted that leases are still being retired for the New World mine near Yellowstone Park, a process taking decades.

“These things take time; they’re complex,” Hammerquist said. “I see the July deadline as a way the governor and premier were communicating to the public the importance of this agreement.”

Dave Hadden of Headwaters Montana agreed.

“I don’t think that’s going to be the death knell of that agreement,” Hadden said. “I don’t think either government’s going to let it go because of a missed deadline.”

“We’ve moved this bi-national issue way down the ball field,” he added. “I have no question we’re going to get to the end.”

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