Coal Giant Asks Judge for Leeway Under Federal Land

MISSOULA, Mont. (CN) — Signal Peak Energy, owner of one of the world’s largest underground coal mines, asked a federal judge Tuesday to tailor an injunction so it can continue mining so long as it doesn’t ship the coal, most of which is destined for China.

Attorneys for Signal Peak asked U.S. District Judge Donald Molloy to tailor his hold on coal production in the Bull Mountain mine north of Billings. They asked to be allowed to continue developing coal tunnels but not completely mine the coal. Any coal extracted in the development process would be stockpiled, Signal Peak attorney John Martin said.

“We’d be willing to accept a tailored injunction that not only stockpiles the federal-development coal but also stockpiles the private-development coal for the duration of your injunction. We would not ship it; it would not be burned and it would not give rise to the risks and pollutants that are at issue in this litigation. If it’s tailored in that way, I don’t know that the plaintiffs have a legitimate objection,” Martin said.

The Montana Environmental Information Center, the Sierra Club and Montana Elders for a Livable Tomorrow sued the U.S. Office of Surface Mining in 2015, saying its environmental assessment of the mine expansion failed to consider the effects of coal on waterways, air pollution and the health of people living along the coal shipping routes.

On Aug. 15 this year, Molloy agreed that the government’s 75-page environmental assessment was inadequate because it overestimated the economic benefits of the mine and downplayed the costs associated with climate change. He blocked Signal Peak Energy from producing any more coal from under federal land until a new environmental study is completed.

Ninety-five percent of the Bull Mountain coal is shipped to Asia. Signal Peak Energy uses a mining technique called “long-wall panels,” in which parallel tunnels are mined in sequence. The proposed expansion would open up a 176-million-ton coal reserve, and the tunnels would run under several sections of land, a scattered few of which are federal land.

Signal Peak CEO Bradley Hansen told the court Tuesday that development operations came to a standstill eight days ago because the crews ran into one of the federal parcels. Development of each tunnel includes digging enough space to install infrastructure such as conveyor-belt lines and ventilation equipment. So development crews have to work on a tunnel about a month before any coal is extracted, Hansen said.

Signal Peak filed an emergency motion on Friday asking the Ninth Circuit to intervene, saying it had installed the infrastructure for the last long-wall panel the injunction allowed and would have to lay off 30 engineers if Molloy’s injunction stood.

But Montana Environmental Information Center attorney Shiloh Hernandez argued that Signal Peak is not going to lose money because it already has enough tunnels developed under private land that its coal production can continue until the new environmental assessment is issued. The assessment is expected to be complete in June 2019.

Hernandez said Signal Peak should not be allowed to develop more coal tunnels under federal land because the new environmental assessment may end up rejecting the mining expansion, in the public interest.

“If they’re allowed to keep moving the mine forward and treat NEPA [the National Environmental Policy Act] as a dead letter, just a paperwork exercise, then the outcome is predetermined,” Hernandez said.

“As they’re doing this, the decision is already made. It’s assumed that they’ll just keep going through there. It’s also going to limit NEPA alternatives.”

Signal Peak has laid workers off in the past so the injunction shouldn’t have to be tailored to save it from having to make an employment decision, Hernandez said.

Signal Peak is partly owned by Gunvor, one of the world’s largest energy traders, and Ohio-based First Energy.

Molloy said his injunction was not intended as a comment on the quality of the mining company, but to hold federal agencies accountable. As he called a recess, he told the attorneys he had a lot to think about but would try to make a quick decision.

“The question isn’t about whether the mills or the mines are good people, whether the workers are good people. That’s not the issue. The question is, ‘Did the agency do what they should have done?’ I don’t think they did.

“Then the question that I have to resolve is: I’ve issued an injunction and is it too broad? Or is there a way that I can balance the equities in a way that keeps things in the status quo?”

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