The State Land Board Decision

Politicians love to pay lip service to the importance of family farms, Montana’s agricultural heritage, and the desirability of a clean and healthful environment. But with the Otter Creek coal tracts, the Tongue River valley, and global climate hanging in the balance, a majority of the then State Land Board voted to harm them all. Ignoring overwhelming opposition, the Board decided on March 18, 2010 to lease the Otter Creek coal tracts for an upfront payment of 15 cents per ton, plus royalties in the future

The vote was close, 3-2. Opposing the decision were Superintendent of Public Instruction Denise Juneau and Attorney General Steven Bullock. They deserve thanks and respect of every thoughtful Montanan. Supporting the decision were Governor Brian Schweitzer, State Auditor Monica Lindeen, and Secretary of State Linda McCulloch.

Because coal mining giant Arch Coal had already leased other portions of coal in the same area from Great Northern Properties, this decision will allow Arch to move forward with plans to develop a massive new open pit strip mine in southeastern Montana. The coal, by the way, is destined for export to Asia.

Although the Land Board’s decision has been made, MEIC and its allies are continuing to explore other approaches to preventing the Otter Creek Coal Tracts from being strip mined.

Some Recent Background

The March 2010 Meeting

When the meeting resumed, the Board voted (as described above) to accept Arch’s bid. Arch has 30 days to sign a lease agreement with the State to develop the Montana school trust lands. After that it can begin the permitting processes for its massive strip mine.

MEIC will continue to work closely with individuals and organizations across Montana that oppose: a coal mine at Otter Creek; the building of the Tongue River Railroad; the burning of 1.3 billion tons of coal; and increasing global warming gas emissions by 2.5 billion tons.

Some Snippets of History about the Otter Creek Coal Tracts

Over ten years ago the federal government bought property adjacent to Yellowstone National Park on which the mining company Noranda proposed to develop a gold mine, called the New World mine. Then governor Marc Racicot, citing the revenue that would be lost to the State because the mine would not be developed, asked the federal government for compensation. Montana was offered a choice: $10 million; or the Otter Creek coal tracts. Racicot insisted on the coal, and added the tracts to the Montana school trust lands.

There was bitter opposition then, and the choice (finalized by Governor Judy Martz and George W. Bush’s first Secretary of the Interior, Gale Norton) is still haunting Montana today.

The Otter Creek coal tracts have a checkerboard ownership pattern. Great Northern Properties owns slightly more than half of the 1.3 billion tons of coal. The State owns the remainder. The checkerboard ownership makes it unlikely that Great Northern could develop its coal unless the State does the same.

In November 2009, just before the Board was supposed to vote on whether to lease its coal and on what minimum bid price to set, Great Northern Properties announced that it had leased its Otter Creek coal tracts to Arch Coal for an upfront payment of 10 cents per ton. Arch is the second largest coal company in the United States and one of its Wyoming mines is the largest coal mine in the country. The deal between Great Northern and Arch was obviously intended, in part, to persuade the Board that Montana’s coal was only worth a fraction of similar Wyoming coal. It worked.

Leave a Reply

Your email address will not be published. Required fields are marked *