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Court Rejects Montana Coal Mine Expansion



By Tom Lutey

February 5, 2021
- A U.S. District judge dealt another setback to the beleaguered Spring Creek coal mine, saying federal officials failed to consider how an 1,100-acre expansion would harm the climate.

Judge Susan Watters ruled Wednesday that agencies within the Department of Interior ignored scientific evidence of the affects an 85-million-ton expansion would have on climate change. She affirmed an earlier ruling that the federal Office of Surface Mining Reclamation and Enforcement “failed to take a hard look at the costs of greenhouse gas emissions and failed to reasonably justify its reasoning for not quantifying the costs of the mining plan when the Social Cost of Carbon Protocol was available to do just that.”


Aerial view of the Cloud Peak Energy Spring Creek Mine near Decker, Montana.

Photo: Larry Mayer, Billings Gazette

The "social cost of carbon protocol" is a measurement that puts a dollar value to the economic harm of releasing a ton of carbon dioxide into the atmosphere. The measure includes damages to human health, agriculture and property resulting from climate change.

Watters gave the federal government 240 days to completed a corrective environmental analysis an update its assessment of the mine, during which Spring Creek can continue mining.

WildEarth Guardians and the Montana Environmental Information Center were the lawsuit plaintiffs. The Department of Interior, mine owners Cloud Peak Energy and Navajo Transitional Energy Company were the defendants.

NTEC didn’t respond to requests by phone and email for comment for this article.

Watters’ order addressed work by the Trump administration that overstated the mine expansion’s economic benefits while ignoring climate consequences, but the root problems with the permitting date back to the tenure of the former Democratic President Barack Obama. Included in the ruling was a string of federal government missteps spanning two presidencies as agencies repeatedly attempted to throw coal a lifeline through permitting, even while the Obama administration imposed moratoriums on coal leasing and rolled out a clean power plan to curb greenhouse gas emissions.

The court’s first ruling that OSM had failed to “take a hard look” at the consequences of approving the Spring Creek mining plan dated back to 2016. OSM had first issued a finding of no significant impact for the mine expansion in 2012.

“They let the coal industry maintain its momentum, which they started to diminish obviously under the Obama administration. But they certainly gave license for the Trump administration to try to go to the mat for the industry, which was in vein because it was all about the market, not politics,” said Jeremy Nichols of WildEarth Guardians.

“Where we’re at now, is we have this ruling. It was an Obama-era decision. Clearly the Trump administration, they were determined to defend it, but now there’s an opportunity for the Biden administration to say ‘you know what, we’re not going to make these compromises with the coal industry anymore, especially given the economics stinks. The industry is still in freefall.”

Biden acted quickly to overturn several Trump-era orders concerning climate change. The new president moved to rejoin the Paris climate accord. He paused new oil and gas leasing on federal land. He also cancelled the permit for the long-struggling Keystone XL pipeline. What the president hasn’t done is take on coal specifically, though he’s repeatedly acknowledged that coal’s economic decline as it loses market share to natural gas and renewable energy, both of which are cheaper sources for electricity generation.

Spring Creek is Montana’s largest coal mine. During the course of the lawsuit, the mine has seen a change of ownership as the original plaintiff in the case, Cloud Peak Energy, went bankrupt, later selling the mine at auction to the Navajo Transitional Energy Company, or NTEC.

Mine operations were briefly shutdown over permitting issues with the state of Montana after the NTEC purchase in 2019. In the early days of the pandemic, 130 Spring Creek workers were sent home because of a lack of coal demand. The majority of those workers returned by summer, though demand problems for Montana coal persisted.

Neighboring Decker mine, a short walk from Spring Creek, filed for bankruptcy in late 2020, saying it no longer sold enough coal to cover operating costs.

Federal energy data shows that of the 23 power plants that have used Spring Creek coal over the past decade only three have plans operate beyond 2021. The majority shut down before 2020.

Spring Creek’s gross proceeds taxes will be $12.7 million past due in May, according to NTEC, which intends to cover the legacy debt that dates back to owner Cloud Peak. An additional $1.3 million in property taxes also needs to be paid over the time period. NTEC also owes $6.18 million in coal severance taxes on the mine.