Montana Coal Mine Deal includes Secret Side Settlement

Deal allows Signal Peak to continue to prepare for the expansion

By MATT VOLZ, Associated Press

HELENA — A deal to keep a coal mine running in central Montana includes a secret side agreement between the owner and the environmentalist group that argued state officials failed to properly examine the long-term effects of a mining expansion on groundwater.

The Montana Board of Environmental Review on Tuesday approved the agreement between Signal Peak Energy, the Montana Environmental Information Center and the state Department of Environmental Quality. The deal gives state officials six months to fix the problems the board found when it rejected an expansion permit the Department of Environmental Quality previously granted to the Bull Mountain Mine, an underground coal mine near Roundup.

It also allows Signal Peak to continue to prepare for the expansion while the Department of Environmental Quality conducts its analysis. Without it, most of the mine’s current operations would have been halted by May, according to company officials.

Included in the public document approved by the board is a paragraph that says the Montana Environmental Information Center and Signal Peak reached a separate, confidential agreement that includes other “material terms.”

Mine spokesman Mike Dawson declined to discuss what is in the secret agreement. “I can’t comment on any aspect of the confidential agreement,” Dawson said, adding that the larger agreement “provides a positive pathway forward.”

Montana Environmental Information Center attorney Derf Johnson said the environmental organization wanted to make the side deal public, but it would have scuttled the deal. “We wanted to reach an agreement with Signal Peak, and that was one of the requirements of the agreement,” he said.

The approved agreement allows Signal Peak Energy to make preparations for the expansion while Department of Environmental Quality officials re-tool their analysis that concluded the expansion would not harm groundwater used by nearby ranches and homes for 50 years after mining finished.

In rejecting the expansion permit in October, board members accepted the argument of Montana Environmental Information Center attorneys that the 50-year study was not adequate because state law did not place a time limit for analyzing the threat of water contaminated by mining.

The deal says Signal Peak must halt its expansion work if a new permit is not issued by the six-month deadline. The deadline can be extended if the sides agree to it.

The agreement also awards Montana Environmental Information Center $30,000 in legal fees to be paid by the state.

Department of Environmental Quality Director Tom Livers defended his agency’s original analysis before a legislative panel on Tuesday, calling it technically sound. But he added there were areas where it could have been “more robust.”

“We realize we have to make sure these documents have to stand up and are understandable,” he said.

State Sen. Duane Ankney, a Republican whose district includes the Bull Mountain Mine, warned the Water Policy Interim Committee that other mines and industries could be sued as a result of “technical jargon” he said was the basis of this dispute.

“As long as we keep allowing groups to sue and settle, we’re going to put this state out of business,” he said.

Johnson, the Montana Environmental Information Center attorney, responded that the Department of Environmental Quality’s decision to issue the expansion permit was not in line with state law.

“These are not just technical documents, They have very real implications for people who live next to coal mines,” Johnson said.

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.