Signal Peak Energy argues for rejection of lawsuit over BLM coal leasing

Montana coal producer Signal Peak Energy LLC (SPE) told a federal court on Sept. 11 that a May 2014 lawsuit filed by an environmental group against the U.S. Bureau of Land Management over the leasing of federal coal to Signal Peak should be dismissed because BLM made no error in that leasing process.

Signal Peak is seeking summary judgment in a case brought by the Northern Plains Resource Council (NPRC) requesting that the U.S. District Court for the District of Montana reverse a decision of the Interior Board of Land Appeal (IBLA) affirming BLM” approval of the Bull Mountains Mine Number 1 federal coal leasing. Specifically, NPRC challenges BLM’s decision-making process and conclusions, and the IBLA’s affirmation of the same, under the United States National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA).

Under applicable law, determinations by the BLM and the IBLA must be upheld unless they are “arbitrary, capricious, an abuse of discretion, or not in accordance with law,” Signal Peak noted. “The BLM and IBLA determinations challenged in this action are none of the above.”

In 2008, SPE filed an application for a federal coal lease to extend the life of the Bull Mountains Mine No. 1 underground coal mine in Musselshell County, Montana. The application covered approximately 2,679.9 acres of coal that is covered by an existing mine plan. BLM anticipates that the lease will result in substantial economic benefits, including: employment for the existing mine workforce of 200 for an additional seven years; federal royalties of 8% of the revenue realized from the sale of the federal coal; and the potential contribution of $23,816,000 annually in tax revenues to the state of Montana.

Following public scoping that began in 2008, BLM, in accordance with NEPA, prepared a draft Environmental Assessment (EA) in 2010, offering it for public comment for a 30-day period and holding a public hearing on April 13, 2010. After considering the comments received, BLM revised the draft EA and issued it in final form on April 15, 2011. The Office of Surface Mining and Reclamation and the Montana Department of Environmental Quality (MDEQ) participated in the drafting of the EA, as cooperating agencies. The mine was previously analyzed in several prior NEPA and Montana Environmental Policy Act reviews to which the EA was tiered.

Notably, the Final Environmental Impact Statement (FEIS) for the mine prepared in 1992 as part of the State Mine Permit approval process covered the mine permit area, all proposed surface facilities at the mine, the Huntley load-out facilities near Billings, Montana, and the railroad spur to Broadview, Montana, Signal Peak noted.

In April 2011, after the issuance of the EA, the Deputy State Director of the BLM issued a Finding of No Significant Impact and Decision Record (FONSI) approving the new lease. The FONSI confirmed that BLM was not required by Section 102(2)(C) of NEPA to first prepare an EIS before deciding whether to approve the lease.

Subsequently, the Bull Mountain Land Alliance and NPRC filed an appeal to the IBLA requesting that approval of the lease be stayed. The IBLA denied the petition for stay, and then affirmed the FONSI in October 2012. NPRC subsequently initiated this action in federal court on May 14, 2014.

Said Signal Peak’s Sept. 11 brief: “As set forth below, each ‘Count’ of the Complaint should be dismissed, as the NPRC cannot satisfy its significant burden of establishing that the determinations of the BLM and the IBLA were arbitrary, capricious, an abuse of discretion, or not in accordance with law.”

U.S. Mine Safety and Health Administration data shows that the Signal Peak mine produced 3.1 million tons of coal in the first half of this year, and 7.9 million tons in all of 2014.

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.