Magistrate judge recommends end of permit approval for Cloud Peak coal mine area

A federal magistrate judge on Oct. 23 recommended to a judge at the U.S. District Court for the District of Montana that a coal mining permit approval issued to the Spring Creek Coal unit of Cloud Peak Energy (NYSE: CLD) be vacated because the federal agencies involved conducted a deficient environmental review of this permit area.

This action arises from the U.S. Office of Surface Mining’s approval of a mining plan modification for the Spring Creek surface mine in the Powder River Basin of Montana. This agency decision gave rise to two actions in this court, an appeal from the Northern Plains Resource Council, and another from WildEarth Guardians. These actions have been consolidated with the consent of the parties.

WildEarth’s claims against federal defendants were first asserted in the U.S. District for the District of Colorado, along with challenges to other mine plan decisions regarding other mines in various states. The Colorado federal court severed the claims related to the Spring Creek Mine and transferred them to this Montana federal court in early 2014.

The federal defendants named in these two actions include: Al Klein, in his official capacity as Western Regional Director for OSM; and Sally Jewell, who in her capacity as U.S. Secretary of the Interior oversees OSM.

Magistrate Judge Carolyn Ostby’s Oct. 23 ruling for the environmental groups is only advisory, with a final decision to be rendered by U.S. District Judge Susan P. Watters.

In 2005, Spring Creek coal filed an application to lease an additional 1,207.5 acres of federal coal in order to extend the life of the Spring Creek Mine. The U.S. Bureau of Land Management then prepared an Environmental Assessment, with OSM as a cooperating agency in completing this EA. After completing the EA, the BLM issued the lease to the company in late 2007. OSM later signed off on permitting for this mine expansion area.

Collectively, the plaintiffs argue that the approval of the Mining Plan Amendment violated the Administrative Procedure Act (APA) and the National Environmental Policy Act (NEPA) because OSM failed to provide notice of its Finding of No Significant Impact (FONSI) to the public and it failed to take the requisite “hard look” at the project’s environmental impacts as required by NEPA. The claim the secretary failed to take the required “hard look” at the impacts of the mining plan expansion to land and water resources by authorizing the mine expansion in light of the mine’s failure to achieve successful, contemporaneous reclamation in the past, and by relying on an outdated EA in approving the expansion

In support of their motion for summary judgment, the federal defendants argue that plaintiffs’ air quality and reclamation claims are waived because WildEarth did not alert the agency to its air quality concerns and NPRC did not alert the agency to its concerns until filing this court action. They argue that plaintiffs could have taken steps to participate in the proceedings but, by failing to do so, they waived their air quality and reclamation claims.

Said the magistrate judge’s Oct. 23 recommendation: “The administrative record here includes no suggestion of public notice by the Federal Defendants of the FONSI. Although the Federal Defendants argue that they placed the documents in a reading room in a Denver high-rise office building, they acknowledge that they gave the public no notice that the document had been placed there. And, as counsel for the Federal Defendants acknowledged at the hearing, there is no indication in the Administrative Record that the FONSI actually was placed in a reading room in Denver. This contention is merely asserted, without citation, in the Defendants’ briefs.

“OSM made no effort to inform or involve the public in its decisions at issue. No notice was provided to the public regarding the existence of the FONSI, nor any notice indicating that it was placed in a reading room for public review. Under the applicable standards, the Court finds that this complete lack of notice violates the public participation and notice provisions of NEPA, and thus the Court recommends that Plaintiffs’ motions be granted based on a lack of public notice.

“Plaintiffs argue that OSM failed to analyze the mine expansion’s effects on air quality, coal combustion, or reclamation. Because the FONSI itself fails to explain how OSM, in 2012, gave a hard look at the consequences of approving the mining plan amendment, the Court must agree. The FONSI, without any elaboration or explanation, simply states only the conclusion that it is based on the 2006 EA, which ‘has been independently evaluated by OSM and determined to assess the environmental impacts of the proposed action adequately and accurately and to provide sufficient evidence and analysis for this finding of no significant impact.’ It does not explain, for example, why a six-year-old document can be exclusively relied upon in this regard, particularly when that earlier document expressly stated that it was not analyzing site-specific mining or reclamation plans.

“Applying the applicable standards, the Court concludes that such conclusory statements do not comply with governing laws and regulations summarized above. Although the 2006 EA was attached to the FONSI, there is no indication as to why and how an EA created before the mining plan amendment application was filed properly analyzes its effects. Based on the lack of the required non-delegable environmental analysis in the NEPA documents at issue here, the Court recommends that Plaintiffs’ motions be granted to the extent that they argue OSM failed to take a hard look under NEPA at their recommended approval of the SCC mining plan amendment.

“Based on the circumstances of this case, the Court recommends that vacatur be deferred for a period of 180 days from the date of a final order on the pending motions for summary judgment. The Court further recommends that Federal Defendants, during this time period, be required to correct the NEPA violations by preparing an updated environmental assessment, taking a hard look at the direct and indirect environmental effects of the SSC mining plan amendment, and complying with applicable public notice and participation requirements.”

The magistrate judge gave the parties 14 days from Oct. 23 to respond to this recommendation.

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.