Ranchers, enviro groups file suit over Montana coal permitting

Montana ranchers, sportsmen and conservationists are filing a federal lawsuit against the state seeking legal action to enforce laws aimed at preventing mining damage to streams in relation to a state approval for new permit area for a Westmoreland Coal (NASDAQ: WLB) mine.

“Water is my life. Without it, I don’t run cattle, I don’t ranch, I don’t have a business,” said Doug McRae, who operates a cattle ranch near Colstrip, in an April 17 announcement of the lawsuit. “And so far, the state regulators who are supposed to be protecting our waterways seem to be asleep at the switch.”

McRae and other Montanans say they have tried repeatedly to get the Montana Department of Environmental Quality to follow through on its legal duty to ensure that coal mining doesn’t harm the quality and quantity of ground and surface waters in Montana. On McRae’s behalf, attorneys sent a warning to the DEQ in September 2011 telling the agency that before it approved an application by Westmoreland’s Western Energy unit to significantly expand the Rosebud coal mining complex near his ranch east of Billings, it needed to make certain that streams in the area would not be disrupted. DEQ did nothing to address those concerns, McRae said.

The lawsuit details an alleged “pattern of neglect” by DEQ in its permitting decisions for proposed coal mining operations over the past 17 years. It documents 10 separate instances in which the agency ostensibly issued coal-mining permits without properly considering the effects on water quality and quantity. For example, the lawsuit proponents said stream sections near the existing Rosebud mine already have been classified by the state as “impaired” because of sediment contamination resulting from mining.

The Western Environmental Law Center and Morris Law Office filed the complaint on behalf of the Montana Environmental Information Center and the Sierra Club.

An April 17 Associated Press report said the head of the DEQ rejects this lawsuit claim, stating that the Montana water protection program is one of the best in the country.

The Rosebud mine is a minemouth supplier to the Colstrip power plant owned by PPL Corp. (NYSE: PPL) and others. “The Rosebud mine has two contracts with the adjacent Colstrip Station power generating facility,” said Westmoreland’s March 13 annual Form 10-K report. “Effective January 1, 2010, a new cost-plus agreement commenced with Colstrip Units 1 & 2 with a projected term through at least 2019 and expected tons of 3.0 million per year. A second agreement at Units 3 & 4 covers approximately 7.0 million tons per year and is set to expire at the end of 2019. This contract is also cost-plus, but has provisions for specific returns on capital investment.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.