Judge blocks coal mine expansion sought by Signal Peak

A federal judge in Missoula has tossed out an Interior Department decision that would have allowed Signal Peak Energy to expand a coal-mining operation in central Montana.

In a ruling on Feb. 10, U.S. District Court Judge Donald Molloy found that errors in the federal government’s environmental reviews were “sufficiently serious” to reverse an approval of an expansion to the Bull Mountains Mine located north of Billings that Signal Peak Energy operates.

The Office of Surface Mining Reclamation and Enforcement had committed to conduct an environmental impact statement — an in-depth review of the project’s anticipated impact — but Molloy was unpersuaded by the agency’s attempt to go forward with its initial approval of the expansion. Molloy effectively told the federal government and Signal Peak to start over with a new application that complies with the National Environmental Policy Act if they wish to move forward with mining federally owned coal located under the Bull Mountains.

“The Enforcement Office’s errors cast substantial doubt on the agency’s decision to approve the Mine Expansion in the first instance,” Molloy wrote. “That doubt is then augmented, not assuaged, by the agency’s unilateral decision to prepare an EIS at this late stage of the proceedings. Therefore, the agency’s errors are sufficiently serious to warrant vacatur.”

The proposed expansion has been the subject of a six-year judicial tug-of-war between Signal Peak, which is seeking approval of a 7,100-acre expansion that would allow it to pull 175 million tons of coal from beneath the Bull Mountains; environmental and agricultural groups concerned about impacts to water supply and greenhouse gas emissions; and the federal and state regulators that initially approved Signal Peak’s application.

The Montana Environmental Information Center and Sierra Club maintain that the Bull Mountains Mine has threatened local landowners’ water supply, causing previously reliable springs and wells to go dry, and that state and federal regulators have failed those landowners.

“The court’s order brings long-sought accountability to a mine that has operated with utter disregard for area ranchers and the water supplies they depend on for decades,” Western Environmental Law Center attorney Melissa Hornbein said in an email about the ruling. “Signal Peak’s bad behavior has driven this community to the brink — we hope this outcome represents a turning point for families who have worked and looked after this land for generations.”

Anne Hedges, MEIC’s director of policy and legislative affairs, described the ruling as a “major milestone” following years of effort to get Signal Peak and regulatory agencies to take a close look at impacts associated with current operations and the proposed expansion.

“The judge finally said, ‘No more. We are done trying to pretend you’re going to come into compliance if we treat you with kid gloves,” Hedges said. “The law is the law, and it is time for you to comply.’”

Signal Peak did not respond to Montana Free Press’ request for comment Monday afternoon.

In court filings, Signal Peak argued that environmental assessments the federal government conducted were sufficient to weigh the project’s environmental impacts and there would be greater total greenhouse gas emissions resulting from a change to its operations given the massive amount of concrete and steel that would be required to move its longwall, a 10,000-ton piece of equipment that removes huge swaths of coal from an underground seam. (Both concrete and steel manufacturing have sizable carbon footprints.) 

Signal Peak also argued that a change to its planned operations could threaten worker safety and result in the loss of more than $150 million of U.S. and state revenue.

Molloy noted in his ruling the Bull Mountains Mine has access to enough non-federal coal — coal belonging to the state or private entities — to continue operations for about two more years. That’s roughly the time it would take for the Interior Department to conduct an EIS.
Signal Peak and its executives have been the subject of several headline-grabbing scandals in recent years, ranging from cocaine trafficking and firearm violations to embezzlement, worker safety and environmental infringements.

This story was updated Feb. 14, 2022, to correct the name of Judge Donald Molloy’s court.