Shiloh Hernandez and Derf Johnson

In the Bull Mountains, an hour or so northeast of Billings, two important forces in Montana’s history — coal mining and ranching — are butting heads in a way that says a lot about possible paths for the state’s future.

Montana’s Board of Environmental Review recently overturned a permit for the proposed expansion of a coal mine, saying the state’s Department of Environmental Quality had failed, among other things, to consider the long-term impacts of mining on water.

Coal mining has long been present in eastern and central Montana, though it has been highly controversial for the past half-century and has never been sustainable over the long term. Ranching, on the other hand, has been a pillar of Montana’s economy since before statehood and has proven sustainable. In our arid state, water is the lifeblood of family ranching operations that have been running cattle for generations. Quite simply, ranching in Montana cannot survive without clean, available water — something to which mining millions of tons of coal poses a huge risk.

7,000-acre expansion

In the case of Signal Peak Energy’s application to expand its mining by 7,000 acres, the Board of Environmental Review decided in favor of clean water, which may bode well for the future of ranching in the Bull Mountains.

The coal industry is in a death spiral. Coal consumption in the U.S. is projected to drop by 20 percent or more in the coming decades. Leading coal corporations in the U.S. are in financial trouble, as evidenced by Arch Coal going bankrupt and Peabody Energy teetering on the brink of financial ruin.

It would be naïve to expect out-of-state coal companies on the brink of collapse to be committed to Montana’s long-term well-being. This is particularly the case for Signal Peak, which is co-owned by Boich Companies and FirstEnergy (both from Ohio), and the Gunvor Group, a global commodity trader registered in Cyprus and headquartered in Switzerland.

It’s hard to imagine Boich, FirstEnergy and Gunvor putting down roots in Montana or cleaning up lost water supplies in 50 years. In fact, Signal Peak has already started to cut production and lay off workers, and First Energy recently told investors that their one-third share in the mine is worth nothing (as in zero).

15 warning letters

This is important in the context of the Board of Environmental Review decision because when Signal Peak packs its bags and leaves Montana, which is inevitable, unfortunately, the company won’t take its water pollution with it. That will stay with us. DEQ already is looking the other way on repeated violations of the Clean Water Act and the Safe Drinking Water Act at the Signal Peak mine. In the past three years, the agency has sent 15 warning letters and reminder notices of violations to Signal Peak, but it has taken no formal enforcement action.

The global decline of the coal industry makes it all the more urgent to hold companies accountable for damage to Montana’s irreplaceable water. We must ensure that the people who live in Montana — like the generations of families that have earned their livelihood ranching in the Bull Mountains — don’t have to live with a legacy of pollution while paying to clean up coal companies’ messes. Montana has seen this countless times before. Let’s learn from past mistakes rather than repeat them.

The Board of Environmental Review remanded Signal Peak’s expansion permit to DEQ for further review. We will follow this case closely to assure that Montana’s water resources are not sacrificed so that out-of-state coal corporations can turn a fast profit before pulling up stakes.

Shiloh Hernandez, of Helena, works for the Western Environmental Law Center, which represents the Montana Environmental Information Center on coal mining matters. Derf Johnson, of Helena, works for the Montana Environmental Information Center.


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