Derailed coal economy contributes to feds’ decision not to build railroad
May 10, 2016
A 30-year application process that struck fear into the hearts of some Montana ranchers wound up being a lot of tongue flapping.
Tongue River ranchers in the path of a proposed coal hauling railroad are celebrating a reprieve from a project that would have condemned their land and created management problems.
Mark Fix remembers sitting down at the kitchen table in 1991 with the land men from the railroad and hearing the words "eminent domain" with some trepidation.
The land men were after 90 miles of ranch land for the railroad that also would have added a mine. Fix's place south of Miles City was on the list.
"They held this over our heads for 30 years," says Fix of a recent decision that ended the standoff. "We don't want to sit here and be in limbo for another ten years, waiting for a possible mine to come in and a railroad to be built."
The federal Surface Transportation Board cancelled the application recently after the application was suspended by bankrupt Arch Coal. Says Fix: "We told them, 'Get rid of the application and make them start over.'"
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The board had the option to let the suspended application linger. A coal task force for Northern Plains Resource Council headed by Fix is just one entity that wanted the case closed.
Northern Plains is a grassroots organization that promotes agriculture and conservation in the state.
The Tongue River Railroad Company –jointly owned by Arch Coal, Burlington Northern Santa Fe Railway, and candy billionaire Forrest Mars Jr. – would have mined an alluvial valley floor and sent coal on a new path to domestic and overseas markets.
The railroad would have cut through hay fields, destroyed irrigation systems, stranded animals without water and left sheep and cattle out of reach in sub-zero conditions.
Arch Coal had planned to develop Otter Creek Mine near Ashland, Montana, and the Wyoming border, but suspended its environmental permitting application in March, citing unfavorable conditions in the coal market and a lack of capital.
Fix says planners never seemed to understand the impact of their railroad on the ranching community, even after receiving guided tours along the river.
"Where they wanted to go was right through my calving pasture," Fix says. "The calves would be on one side of the tracks and the cows would be on the other. It would be a mess."
Fix says the ongoing threat of losing part of his ranch affected his decision making and cost him time and money.
He delayed, for a decade, the purchase of a circle pivot because where he wanted to use it was on one of the proposed routes. He says he could have raised and sold more alfalfa with a pivot during those years but was afraid to make the investment.
Fix, 60, is a father of three. The spectacle of a coal road also made him leery of leaving a legacy for his three boys.
"This needs to stop at this generation. I don't want to pass this on to them."
Northern Plains is engaging a new project from Arch Coal that starts in the Pacific Northwest. If a proposed coal export facility in Washington takes off, additional coal trains may cross Montana from the Powder River Basin in Wyoming. The Millennium Bulk Terminal is another Arch endeavor, in conjunction with Lighthouse Resources, operator of Montana's Decker Mine.
Steve Charter, a former Northern Plains chair who ranches on Bull Mountain, says adding 18 trains a day to the railroad is a terrible idea.
That's because the Washington port would ship coal along a rail line that goes through such picturesque communities as Livingston and Bozeman, as well as Billings and Missoula, adding congestion and spilling coal dust and changing the character of those communities, Charter says.
"We need to be transitioning away from coal," says Charter, who is skeptical that investing in a dying industry is of much economic benefit to the area.
Three of America's largest coal companies — Arch Coal, Peabody Coal and Alpha Natural Resources — have mines in Wyoming and Montana. All three have filed for bankruptcy in recent months.
Ranchers understand first hand, Charter says, that markets change and successful people change with them.
"As ranchers we have to produce what the market wants, not what we want to raise, or the world passes us by."
The Washington State Department of Ecology has released a draft Environmental Impact Statement for public comment on the port.
The Otter Creek mine would have extracted up to 20 million tons of coal annually. Leases there hold an estimated 1.5 billion tons of coal.
The mine had been in the works since 2010, when Arch Coal bought rights from the state to coal parcels in Otter Creek Valley to the southeast. Without an affordable way to get coal out of the area, the mine isn't likely to open.
A recent economic impact study said the venture would have generated hundreds of high-paying jobs and $91 million in annual tax revenues.
Southeastern Montana, where agriculture is the leading industry, has failed to attract mining on the scale of the massive strip mines below in the Cowboy State.
Charter said forming an alliance with towns in the area has made ranchers strong against coal's interests.
Wyoming's Powder River Basin along the Montana-Wyoming border is the nation's largest coal-producing region. But new environmental restrictions have shut down area power plants, and rail that dates back more than 100 years is quiet.
Charter says he feels for any community that is losing jobs because of a changing market, but doesn't equivocate on what Montana's priorities should be.
"We need clean air and water and land to ranch, and mining threatens that."
The railroad was opposed by the Northern Cheyenne tribe.
A BNSF spokesman said in recent press release that the company was disappointed in the decision.