October 8, 2024 - In Montana, local and national environmental and land use advocates are fighting a state-approved expansion of a controversial underground coal mine, the only underground mine in the state.

Attorneys for Earthjustice, the national environmental law firm, have sued Montana’s Department of Environmental Quality for an Aug. 1 approval of an 12.7 million ton expansion of the Bull Mountains underground coal mine almost equally between Billings and Roundup in central Montana’s portion of the Wyoming-Montana Powder River Basin. The case involves state-owned coal, as the Bull Mountain mine owned by Signal Peak Energy of Roundup has access to both federal and state bituminous.

Earthjustice is representing local groups Bull Mountain Land Alliance, Northern Plains Resource Council, and the Montana Environmental Information Center. They allege that “the mine’s expansion plan amendment runs afoul of the state’s bedrock environmental law, the Montana Environmental Policy Act (MEPA).” The state’s environmental analysis, they charge, “In addition to inadequate or omitted analysis of immediate impacts to water quantity, wildlife, cultural resources, climate, agriculture, and worker safety,” the groups slammed the state’s “failure to look at the cumulative and irreversible harm the mine expansion could inflict on the area.”

At the same time as the state court action proceeds, Signal Peak is involved in a long-running federal legal dispute involving essentially the same issues – a failed environmental analysis of expanded access to new coal – and the same environmental and conservation group opponents. Signal Peak has so far lost at every turn in the federal case. 

The mine employs longwall mining technology,which, the complaint by the group says, “allows the mine roof to collapse or subside as the mining process advances. The subsidence causes a splitting and depression of the surface land above the mining operation. Subsidence from the mine has dewatered springs and wells and caused extensive fracturing of the land.”

DEQ gave a green light to an expansion that would add 12.7 million tons to the approved limit to the state coal that Signal Peak Energy of Roundup can mine from the site. That access to state-owned coal would amount to about two years production, which has historically run about 6 million tons per year. According to 2015 Energy Information Administration data, Bull Mountains was the 14th largest U.S. underground mine. The largest was MC1 in Illinois at 12.8 million annual tons.

“Montana’s approval of Signal Peak Energy’s request to expand its coal mine in the Bull Mountains without properly examining the impacts to water, wildlife, and agriculture is in clear violation of state law,” said Earthjustice attorney Shiloh Hernandez. “The mine is already destroying the limited and vital water supplies in the Bull Mountains, which science shows cannot be replaced there. This mine expansion would be a blatant threat to people who live and ranch in the area.”

On the federal level, the local groups have successfully challenged a series of “environmental analyses” by the Interior Department’s Office of Surface Mining Reclamation and Enforcement (OSMRE) going back to 2015 and updated in 2018. The agency consistently approved access to new federal coal without a rigorous, formal environmental impact statement required by the National Environmental Policy Act. Instead OSMRE’s preliminary analysis produced a “finding of no significant impact” from the expansion.

The Ninth U.S. Circuit Court of Appeals in February 2023 halted the mine’s expanded access to 175 million tons of federal coal. The court agreed with the conservation groups that OSMRE’s environmental analysis was faulty and ordered a formal EIS or the court would vacate the mining permit. The parties have been wrangling in federal court since over when OSMRE must complete the analysis.

On Aug. 21, the U.S. Court of Appeals for the District of Columbia denied a move by Signal Peak to expediate OSMRE’s EIS, allowing the company its desired expanded access to federal coal.  Signal Peak sought to force the federal agency to quickly complete the EIS and let the company go forward with its expansion plans. According to Earthjustice, Signal Peak aspires to become the “nation’s largest remaining underground coal mine.”

Attorney Hernandez said, “Signal Peak failed to bully the government into rushing its decision to approve or deny a mine expansion that will harm ranchers and wildlife, threaten water sources and livelihoods, and further imperil our climate.”

The Bull Mountains is Signal Peak Energy only coal mine. Its steam coal is exported to Japan, Korea, and Chile, most likely through British Columbia’s Westshore Terminals, the largest coal export terminal in North America. Signal Peak is owned by giant Ohio electric utility holding company FirstEnergy Corp., Gunvor Group, a Swiss energy commodities trading firm, and Ohio based WMB Marketing Ventures, owned by coal magnate Wayne Boich.

While there is some evidence that coal has been mined in the Bull Mountains since 1907, Signal Peak began its operations in 2008 and mined its first coal from the low sulfur, relatively high Btu (10,300/lb) coal from the Mammoth vein in the Bull Mountain Basin, west of the larger Powder River Basin. Its history is described in a 2012 article in Coal Age magazine.

According to the USGS, the Mammoth vein is about 17 feet thick and buried some 200 feet deep. Powder River Basin coal (8,500 btu/lb), by contrast, tends to run up to more than 100 feet thick, with only 20 feet or so of soil and rock overburden.

Signal Peak’s management has a shady reputation, as disclosed in a long January New York Times article, headlined “A Faked Kidnapping and Cocaine: A Montana Mine’s Descent Into Chaos.”

The article begins with what appeared to be, but wasn’t, a kidnapping in rural Virginia, and moves to the middle of Montana and the Bull Mountains mine. The report summarizes its damning findings: “The embezzlement and fake kidnapping were part of the unraveling of a coal company called Signal Peak Energy that also involved bribery, cocaine trafficking, firearms violations, worker safety and environmental infringements, a network of shell companies, a modern-day castle, an amputated finger and past links to President Vladimir V. Putin of Russia.”

–Kennedy Maize

The Quad Report