Daines proposes coal swap, reinstatement of Signal Peak expansion

Blair Miller

(Daily Montanan) U.S. Sen. Steve Daines introduced a series of bills during the past two weeks that seek to force the restart of coal mining on federal land in the Bull Mountains and could put coal money back into the hands of the Crow Tribe as part of a revenue sharing agreement that would involve a land swap.

Montana’s Republican U.S. senator introduced the bills – two of which seek to reinstate an amendment to Signal Peak Energy’s mining plan that was vacated by a federal court in 2023 – as litigation plays out among the company, the Department of Interior and its Office of Surface Mining Reclamation and Enforcement, and several Montana environmental groups over the timeline for an environmental impact statement the Interior Department has ordered before any more mining could continue on those pieces of federal land.

Two of Daines’ bills aim to put the amendment that was vacated by a judge last year back in place so Signal Peak could again start mining federally leased coal at the Bull Mountains Mine north of Billings, which environmental groups said they see as a way to skirt the new environmental impact statement and analysis.

A third bill, the Crow Revenue Act, would transfer 4,660 acres of subsurface coal tracts owned by the Hope Family Trust to the tribe, while the trust would receive 4,530 acres of federal subsurface and 940 acres of surface interests in the Bull Mountains Tract, currently leased by Signal Peak.

Following nine years of environmental assessments, lawsuits, and court orders saying that the assessments violated the National Environmental Policy Act because they did not fully account for water supply and emissions impacts, Signal Peak sued Interior Secretary Deb Haaland and the Interior Department in February, then asked for a preliminary injunction on May 9.

The company alleged the Office of Surface Mining Reclamation and Enforcement was wrongfully delaying the completion of the environmental impact statement that was officially announced last August.

But in a response last week, attorneys representing the Interior Department said the deadlines for the environmental impact statement have not passed, so a judge can’t legally allow a faster deadline. They also said that Signal Peak’s modifications to its permit requests during the past year have caused the delays that are, according to the company, threatening the mine’s future.

Years of litigation over mine expansion continue

In February 2023, U.S. District Court of Montana Judge Donald Molloy threw out a decision by the Interior Department to allow Signal Peak to expand its operations at the Bull Mountains Mine, saying the environmental reviews the department performed during the course of several years contained serious errors in violation of the National Environmental Policy Act.

Environmental groups had challenged the expansion plans over emissions and water supply pollution potential, as well as the Montana Department of Environmental Quality’s oversight of the mine.

Local landowners have also fought the Bull Mountains Mine expansion, saying it is sucking groundwater out from underneath them and creating subsidence cracks on their land.

And last year, the New York Times published a story detailing how former Signal Peak executives had been charged or convicted as part of a federal investigation into bribery, drug trafficking, worker safety, and more, and how it had been fined for not reporting injuries to workers and illegally dumping toxic waste.

Last August, the Office of Surface Mining Reclamation and Enforcement gave notice it was going to develop another environmental impact statement on the proposed mine expansion after Molloy vacated the previous plan.

Though the draft environmental impact statement was initially scheduled to be published this spring, a spokesperson for the OSMRE said Friday it was not yet available. According to the Federal Register publication from last August, the final EIS would be published this fall and a record of decision early next year.

Mining on the proposed expansion area, which would extend the mine’s life by an estimated 8 to 10 years, is halted until a new plan can be approved. If a new plan is not approved, the mine would only be able to produce coal until this year or next, according to the notice of intent.

However, the recent filings in the company’s lawsuit show those deadlines have been delayed. The company said it might be forced to close the mine before the decision is published.

But the federal government says the company has consistently been making changes to its plans, which keeping pushing back the timeline for the completion of the environmental impact statement and record of decision – now possibly until 2026 – and the company’s ability to start mining the federally leased land.

“OSMRE has worked diligently on preparing the EIS, but that progress has been repeatedly thwarted by Signal Peak’s repeated changes to the proposed action and no action alternatives, refusal to approve a modified statement of work to fund the contractor preparing the EIS, and inability to provide information necessary to develop the alternatives in the EIS,” attorneys for the U.S. Department of Justice wrote in a response filing last week.

Daines’ introduction of the bills comes amid the litigation and as Montana Republican officials decry what they say are attacks on Montana’s coal producers and workers. The Bureau of Land Management recently announced it planned to end future federal coal leasing in the Powder River Basin, which accounts for about 40% of annual American coal production.

The Bull Mountains Mine sits just outside of the field office area to which the proposal, if adopted, would apply. The Bureau of Land Management proposal, which is still going through a public comment period, incensed Daines, Gianforte, and the rest of Montana’s Republican federal delegation, who said the proposal singled out the generation plant at Colstrip and its emissions and would cost Montana jobs and money.

The Crow Revenue Act

Daines’ office issued a news release last week announcing the Crow Revenue Act, calling it a “win-win” piece of legislation. His office did not publicize the other two bills, but a spokesperson provided copies to the Daily Montanan and called them narrow and short-term fixes “that will allow mining to continue.”

“The tribe wouldn’t own anything at the mine, they’d just be able to benefit from revenue payments,” said Daines’ spokesperson, Rachel Dumke. “This is huge for Signal Peak because without this fix, they will run out of mineable coal.”

The Crow Tribe and the family trust would each get revenue from the development of the mineral interests by the company if that occurs.

“Not only will we help preserve the jobs and economic impact from the Bull Mountains Mine in Musselshell County, it will also bring in new revenue for the Crow Tribe to help support their communities,” Daines said in a statement.

Dating back to 2013, companies including Signal Peak have looked into mining hundreds of millions of tons on Hope Ranch, which sits on private property within the reservation. But the deals have not gone through.

With the Absaloka Mine, whose mineral rights are owned by the Crow, no longer shipping coal as of April, the tribe has worried that the money it receives from mining and mineral production could run dry.

Frank White Clay, chairman of the Crow Tribe, said in a letter in support of Daines’ bill that the measure would “ensure the Tribe receives much needed revenue from mineral production that would otherwise be lost.”

“This transfer will ensure a sustainable source of income for the Crow Tribe, employees of the Bull Mountains Mine in Musselshell County, and energy for the nation,” White Clay said in the letter.

Signal Peak Energy CEO Parker Phipps said the company supported the proposal and said it would benefit the tribe, adding that the company’s mineral leases are “needlessly held up in litigation.”

“The Act will directly promote the economic welfare and sovereignty of the Crow,” Phipps said in a letter of support. “SPE recognizes that these benefits outweigh the cancellation of the federal leases it currently holds in the Bull Mountains and fully supports the Crow Revenue Act.”

The company did not respond to a request for comment on how it stood to benefit from the land swap measure and whether it would seek to develop the mineral interests if the bill to transfer its leases were to pass and be signed into law.

Joseph Hope, a trustee for the Hope Mineral Trust, said in a letter the family fully supports the transfer. The family has owned the ranch since 1944.

“We believe this Act not only resolves land ownership issues but also strengthens the historical ties and shared efforts between us and the Crow Tribe,” Hope wrote in the letter. “Additionally, the legislation provides essential revenue to the Crow Tribe and ensures stability for the Bull Mountains Mine and surrounding communities.”

The measure also received letters of support from Roundup Mayor Sandra Jones, the Big Horn County Board of Commissioners, the Yellowstone County Board of Commissioners, and the Montana Association of Oil, Gas and Coal Counties. The latter said 260 employee jobs and millions of dollars in state tax revenue were at risk if the mine were to close.

About 4% of the mine’s coal is burned domestically, while most of the rest is exported for combustion in South Korea and Japan.

Environmental group says Daines’ effort would give ‘free pass’ to Signal Peak

The Montana Environmental Information Center is one of four environmental and conservation groups that have asked to intervene in Signal Peak’s latest lawsuit against the Interior Secretary seeking to speed up the timeline for the environmental impact statement.

The consortium, which has not yet been granted intervention in the case, filed a response to the company’s ask for a preliminary injunction last week a day after the government filed its response.

They both argue the court cannot render a judgment against a deadline for the environmental impact statement before the deadline has passed, and that the company’s multiple modifications to plans and failure to provide certain information needed for the environmental impact statement were causing the delays.

“In short, Signal Peak took a gamble, accepted the risk, and lost,” the intervenors’ attorneys wrote in their filing. “If an EIS had been completed years ago—as it should have been and as regulators desired—one might not be required now. Signal Peak is an architect of its own problem and cannot complain of a predicament it brought upon itself.”

The MEIC’s policy and legislative affairs director Anne Hedges said the groups have no issue with trying to help the Crow Tribe raise revenues through the proposed land swap, but said giving the publicly leased mineral rights to a private company negates their value for U.S. citizens.

She said she believes Daines’ bills trying to reinstate the vacated mining plan is “giving a mining company a get-out-of-jail-free card” because Signal Peak pressured the government to do a less-thorough environmental assessment for the expansion instead of an environmental impact statement years ago.

Hedges suggested instead of running the bills, Daines should provide the Office of Surface Mining Reclamation and Enforcement more resources to speed up the assessments.

“They created this problem and now they’re asking for a free pass. That’s absolutely what is happening here,” she said. “So, any company that doesn’t want to have to follow the law can just go to somebody like Daines and get an exemption. That’s pretty handy. The rest of us who have to follow the law day-in and day-out are kind of screwed.”