Deal averts Montana coal mine shutdown

  • By Matthew Brown Associated Press
  • Monday, January 11, 2016 1:12pm
  • Business

BILLINGS, Mont. — A central Montana coal mine reached an agreement Monday with environmentalists and state regulators that is intended to avoid a major shutdown as a declining coal market leaves the future of some mining companies in doubt.

The deal comes after a state review panel rejected an expansion permit granted to the Bull Mountain Mine in 2013, threatening to halt most operations if the dispute could not be resolved.

The panel said a Montana agency failed to consider the mine’s long-term potential to contaminate water supplies used by nearby ranches and residents. The agreement gives state regulators six months to look again at the effects from the underground mine.

Mine owner Signal Peak Energy cut about 20 percent of its workforce last month, citing a poor market that is hammering companies across the United States, including in the nation’s largest coal-producing region. Montana and Wyoming combined produce almost half the coal in the U.S.

“We don’t want to see anyone (at the mine) lose any work, but our big interest is to protect water resources, which is important to other people’s work,” said attorney Shiloh Hernandez, who represents the Montana Environmental Information Center. “We reached some common ground here.”

Signal Peak spokesman Mike Dawson said the agreement should allow the company to avert a production shutdown.

“It gives us a pathway forward that we’re pleased about,” Dawson said.

The Montana Board of Environmental Review still must approve the deal and will consider it Tuesday. The agreement allows expansion development work to proceed, which is scheduled to begin in March.

The state’s original analysis of the expansion concluded that no contaminated water would leave the mine area for 50 years after mining was completed. But Montana laws place no time limit on the threat contaminated water poses to streams or to water used by homes and ranches near the mine.

The Montana Department of Environmental Quality expects to complete its revised analysis within the six months called for in the agreement, Director Tom Livers said.

Signal Peak already has started collecting the additional hydrologic information needed, and the company is optimistic the work can get done in the time frame, agency and mine officials said.

The agreement says Signal Peak must cease all expansion work if a new permit is not issued in that time. If that happened, the company would have to lay off about two-thirds of its employees, Signal Peak Steve Wade told the seven-member review board last month.

Other coal companies in the region are preparing to scale back operations as competition from cheap natural gas erodes coal’s once-dominant role providing fuel for power plants. The nation’s second-largest coal company, St. Louis-based Arch Coal Inc., filed for federal bankruptcy protection Monday.

Signal Peak mined almost 8 million tons of coal from Bull Mountain in 2014 and almost 5 million tons through the first nine months of 2015, according to the U.S. Mine Safety and Health Administration.

After the Dec. 31 layoffs, the company expects to scale back production to 5.5 million tons annually until market conditions improve, Signal Peak President Brad Hanson said.

In the past, more than 90 percent of Bull Mountain’s coal was sold overseas for use in Asian power plants. In December, the mine’s owners notified shippers that they were reducing exports until prices rebound.

The mine has an estimated 431 million tons of coal in its reserves. It’s owned by Wayne M. Boich and utility FirstEnergy — both of Ohio — and Gunvor Group, a global commodities trading company based in Switzerland.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.