Signal Peak sues Department of the Interior for stalling on coal lease, says mine may have to close

The only underground coal mining company in Montana is suing the Department of the Interior and its mining division for stalling a process that would open up more federal land to coal mining. Signal Peak Energy says without a timely approval process, the mine could close, leaving 300 workers in Musselshell and Yellowstone counties unemployed.

Meanwhile, attorneys for the federal government argue in briefs filed earlier this week that the Washington, D.C., court that’s handling the trial should dismiss the suit because the Office of Surface Mining, Reclamation and Enforcement still has eight more months, according to law, to complete an environmental impact statement. They argue the company has no case, and that it’s not “ripe” for a judge’s decision.

However, the court battle is just one of many that have played out for the Bull Mountain Mine, which straddles the county line between Musselshell and Yellowstone and serves as one of the largest job producers in the region.

In the company’s filings, Signal Peak says it is mining around a federal coal tract, but it can only do so much since federal coal leasing land runs in a checkerboard pattern across the land. The court documents say it’s impractical, dangerous and expensive.

“If OSMRE does not complete its analysis before Signal Peak completes its replacement mining operations, Signal Peak may be forced to close the mine and lay off workers,” the court filing said.

Signal Peak had applied in 2012 to continue leasing federal tracts of land and mining underground. Environmental groups and neighbors have voiced concerns that the underground mine has wreaked havoc with groundwater and caused huge subsidence cracks in the land. In a lawsuit challenging the federal leasing of more coal land, Montana District Court Judge Donald Molloy said the Bureau of Land Management had failed to complete an environmental assessment of the project, and must do so before mining can be done on more federal land.

Both OSMRE and the Montana Department of Environmental Quality have discussed the project, but Signal Peak said the dates just keep getting pushed farther and farther ahead without consultation or agreement. Signal Peak told the court that the process, which can take from months to years, hasn’t even begun — and this could create a production problem.

Congress has given federal agencies two years to act. However, OSMRE issued an order to prepare an environmental impact statement on Aug. 7, 2023, but as of February this year, doesn’t anticipate a decision until July 2026. The lease for the coal encompasses 2,680 acres.

“While (the U.S. government does) not agree that Signal Peak is correct about the deadline, even as pled, any such deadline would still be months away, and therefore the suit must be dismissed because it is not ripe and because it fails to state a valid claim,” attorneys for the United States argue. “The problem with this claim, as the complaint acknowledges, is that, under no scenario put forward by the plaintiff has OSMRE missed the two-year deadline.”

The lawsuit was filed in federal court in the District of Columbia. Federal Judge Tanya S. Chutkan has been assigned to it. She is a familiar name in the news, who is also presiding over Special Counsel Jack Smith’s prosecution of former President Donald J. Trump for his involvement in the Jan. 6 insurrection.

Editor’s note: This story was corrected to reflect that OSMRE is part of the Department of the Interior.