A federal court judge has overturned a plan to expand Montana’s only underground coal mine, ruling that the Interior Department’s Office of Surface Mining Reclamation and Enforcement (OSMRE) repeated approvals, the most recent in 2020, of the 7,100-acre, 175-million-ton expansion plan by Signal Peak Energy for the Bull Mountains Mine No. 1 near Roundup, Montana, violated the National Environmental Policy Act (NEPA). The mine already includes substantial federal land and coal and would add some 2,500 federal acres in the large expansion.
The mining company has a checkered history, replete with safety violations and criminal activity, reported in a Jan. 13, 2023 New York Times article headlined “A Faked Kidnapping and Cocaine: A Montana Mine’s Descent into Chaos.” The article detailed crimes that “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.”
In a Feb. 10 ruling, U.S. District Court Judge for the District of Montana Donald Malloy found that Interior’s 2018 “environmental assessment, (EA)” which was a “finding of no significant impact,” widely referred to as “a FONSI,” was in error by underplaying the greenhouse gas emissions that would result from the mine expansion. The mine expansion case dates back to 2012, when Signal Peak sought Interior approval for the mine expansion. OSMRE in 2015 did an environmental assessment, the first step in the analysis under the NEPA process, concluding that the environmental impact was insignificant.
In 2018, Interior did a new assessment, again concluding it could find no significant impact, despite Signal Creek’s acknowledgement that the expansion would add some 190 million yearly additional tons of greenhouse gases over 11.5 years the mine would operate. Interior decided that this amount was insignificant (0.44%) measured against the annual global projected greenhouse gas emissions over that period.
Local opponents of the mine expansion, including environmental groups and local landowners, appealed OSMRE’s assessment and the district court ratified Interior’s approval of the mine plan, except for an analysis of the impact of coal train derailments. The district court rejected the environmental analysis but let the mine expansion approval remain in effect. Interior then came up with another EA, again finding no significant environmental impact.
The case then went to the Ninth Circuit Court of Appeals, where a three-judge panel rejected the district court’s ruling and remanded the case back to the lower court. In a 2-1 decision, the appeals court said, “The 2018 EA failed to articulate any science-based criteria of significance in support of its finding of no significant impact (FONSI), but instead relied on the arbitrary and conclusory determination that the Mine Expansion project’s emissions would be relatively minor.”
The case then returned to the Montana district court, where Chief Judge Malloy took on the remand. Signal Peak’s lawyers asked him to let the expansion go forward while he considered the issues, arguing, he said, “that maintaining the status quo is less disruptive to the environment and limits economic limits.” Otherwise, Signal Peak argued, the company will have to move its longwall mining equipment so it would no longer be mining federal coal, only state and private deposits, at great cost and greater greenhouse gas emissions.
Malloy rejected that plea, noting that “Signal Peak declares its plans to move the longwall regardless of whether the [federal] approval is vacated, cutting against its arguments that vacatur will cause additional and disruptive environmental, economic, and safety impacts.” He said, “The disruptive consequences Signal Peak alleges are a product of its reliance on Mine Expansion approvals pursuant to invalid EAs.” He vacated the OSMRE approval and ordered Interior to come up with a real EIS.
The Bull Mountains Mine No. 1 annually produces some 7.5 million tons of coal, according to Global Energy Monitor, with a resource base of 431 million tons of private, state and federal coal approved for mining. Coal has been mined at the site since 1907 in underground operations. All other coal mines in the state are surface mines in the Powder River Basin.
According to a press release from Signal Peak’s owners when they acquired the coal mining company in 2011, “Signal Peak produces stable, high-quality bituminous coal with approximately 50 percent lower sulfur and ash content. In addition, it has lower mercury content and significantly higher heat value than sub-bituminous coal found in the nearby Powder River Basin (PRB), meaning higher kilowatt-hour production with significantly lower carbon dioxide emissions per megawatt.”
Akron Ohio utility holding company FirstEnergy, through FirstEnergy Ventures, according to Securities and Exchange Commission filings, “holds a 33-1/3% equity ownership in Global Holding, the holding company for a joint venture in the Signal Peak mining and coal transportation operations with coal sales in U.S. and international markets.”
The New York Times article detailed its findings about Signal Peak executives, company management, and ownership in general: “By 2018, the mine had become, in the words of United States attorneys working on the case, a ‘bastion of unreported injuries and malfeasance.’”
Judge Malloy took notice of the allegations and reputation of the mine in his order for a new, from-the-ground-up environmental review. In a footnote, he wrote, “Plaintiffs also argue that the criminal and other bad acts of Signal Peak and its parent companies…disqualify it from any consideration of an equitable remedy. This past behavior was not considered as it has no impact on the balancing of the equities.”
–Kennedy Maize
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