Decision due on Mont.'s half-billion tons of coal

AP News
Posted: Dec 18, 2009 6:55 PM

The Montana Land Board is to vote Monday on whether to put up for lease a half-billion-ton coal reserve near the Wyoming border _ a politically charged decision for Gov. Brian Schweitzer and the four other Democrats who make up the panel.

Coal royalties and other revenues from a new mine would boost the state's cash-strapped coffers by hundreds of millions of dollars in coming decades. That means Democrats would be exposed to charges of economic obstructionism if they vote "no."

But a Land Board vote to move forward could spark a backlash from environmentalists who supported the Democrats in last year's election. Mining the state-owned reserve would lead to the release of an estimated 1 billion tons of greenhouse gases when the coal is burned.

In five years in office, Schweitzer has cultivated an image as a progressive Democrat keen on developing Montana's vast coal resources _ the largest in the nation. He says it can be done in a way that balances economic development with climate change, but Monday's decision could put that to test.

Fourteen Republican state lawmakers sent a letter to Land Board members this week dismissing worries over global warming as rhetoric that could stifle progress.

On Friday, 22 Democratic lawmakers shot back with their own letter to the board, saying the GOP claims ignored reality.

After grappling with the issue for years, the board in November put off a decision for another month to seek public comment. Officials including Secretary of State Linda McCulloch, who sought the latest delay, said Friday that the time for a vote had come.

"There's going to be a vote," McCulloch said. "There's a lot of sides to this. Number one, we have to fund the schools. There are jobs, good-paying jobs associated with this. There's also issues about renewable resources and stewardship of the land."

Neither McCulloch nor other members would reveal Friday how they plan to vote.

Composed of the state's top five elected officials, the board manages state-owned real estate and is charged with maximizing revenue.

The state's coal tracts are intertwined with an estimated 731 million tons of the fuel Great Northern Properties leased last month to Arch Coal Inc. of St. Louis.

Combined, the state and private property contains more coal than the United States burns annually. The coal reserve is next to the Northern Cheyenne Indian Reservation, where support for mining has been mixed.

Schweitzer _ a vocal proponent of coal development _ said Friday that his support for leasing depends on whether the price offered for the coal is high enough.

Environmentalists who backed his 2008 re-election worry that calculus could ignore the costs of climate change and, more locally, the industrialization of the rural Otter Creek valley south of Ashland.

Backers of mining say the question before the Land Board is much narrower: Does leasing the coal make economic sense?

A decision to move forward on leasing could potentially end more than a decade of hand-wringing over the coal tracts.

Once owned by the federal government, the state's reserves were promised to Montana by the Clinton administration as part of a 1996 deal that pre-empted construction of a contentious gold mine next to Yellowstone National Park.

Under pressure from environmentalists, Clinton's interior secretary, Bruce Babbitt, later tried to back out of the deal. He cited "the potential for environmental disruption" if the coal were developed. The transfer finally took place in April 2002, under President George W. Bush.

Since Schweitzer took office in 2005, the state has moved steadily in sizing up the potential for Otter Creek _ if not always quickly enough for development proponents.

The delay has allowed Schweitzer to promote his ambitious energy development agenda while largely steering clear of the growing drive by environmentalists to halt the mining and use of coal.

Even if the Land Board moves forward to seek lease bids, it would not seal the deal on Otter Creek.

The panel still would need to strike a lease agreement, and the chosen developer would need to sink an estimated $1 billion into a mine and a new railroad needed to move the fuel to power plants in the Midwest.