MINUTES OF THE MEETING NATURAL RESOURCES COMMITTEE

MONTANA STATE HOUSE OF REPRESENTATIVES

March 25, 1985

The meeting of the House Natural Resources Committee was called to order by Chairman Dennis Iverson at 6:15 p.m. in Room 312-1 of the State Capitol.

ROLL CALL: All members of the committee were present.

SENATE BILL 156: SB 156 was introduced by the sponsor, Sen. Tom Towe, District 46. Sen. Towe told the committee that the bill changes criteria for coal board grants and loans to allow for the eligibility of more counties. Under current law, he said, only Rosebud County is desig­nated as eligible, and if the coal board does not spend a certain portion of its grant money in Rosebud County, it cannot spend any of that money in other counties. SB 156 would allow the board to designate more counties to receive funding without changing the basic structure of the program, said Sen. Towe.

PROPONENTS: Pat Wilson, re?resenting Montco, said that company would be directly affected by SB 156. Coal board grants would help to alleviate potential problems faced by residents of Powder River County, when Montco begins expansion of its projects in the Broadus and Ashland area, she said. She distributed a booklet describing Monteo's activities in that area, which is attached as Exhibit 1.

There were no opponents to SB 156, and no questions from the committee.

Rep. Asay agreed to carry SB 156 on the House floor.

SENATE BILL 284: SB 284 was introduced by the sponsor, Sen. Tom Towe, District 46. The bill revises a bill which was passed last session regarding the authority of the coal board to make loans. SB 284 deals specifically with the provisions of 90-6-209 that deal with repayment of coal board loans, said Sen. Towe. It would allow that repayment be made from fees, rentals, admissions, use charges and special assessments. Earlier drafts of the bill allowed that repayment be made from property tax revenues, but those sections were deleted from the bill upon objection by the coal companies that they would then be forced to pay taxes twice on their product, said Sen. Towe.

Natural Resource~ Committee March 25, 1985 Page 2

PROPONENTS: Pat Wilson of Montco said that company has worked on the bill for the past three sessions, and is confident that a point has been reached where the loan program will work if SB 284 is put into statute.

There were no opponents to SB 284, and no questions from committee.

Rep. Cobb agreed to carry SB 284 in the House.

SENATE BILL 277: Sen. Chet Blaylock, District 43, intro­duced SB 277, which he sponsored at the request of the department of natural resources and conservtion. The bill would establish the Montana Legacy Program, providing security against loss or damage to the state's environment through the extraction of nonrenewable natural resources. It would be impossible to discuss SB 277 without allusion to HB 913, the legacy program bill introduced by Rep. Dave Brown, he said.

Sen. Blaylock explained that the impetus for the legacy program began with former Governor Torn Judge's state of the state address in 1973, when the resource indemnity trust was proposed. The earnings from that trust, said Gov. Judge, would be invested in a fund which would be spent to correct environmental damage, develop recreation and provide new work opportunities for Montanans. The proceeds of that resource indemnity trust fund would provide the public's share of the benefits derived from Montana's natural resources, said Sen. Blaylock.

Sen. Blaylock told the committee that the difference between SB 277 and HB 913 is essentially a difference in philosphy. SB 277 is a broad program, leaving the discretion as to how funds would be spent to the department, the legislature and the governor, and HB 913 allocates funding to four specific areas. SB 277 is superior because it does not say that the 49th Legislature "possesses all the wisdom," but allows for allocation to vary on the basis of future needs, he said.

PROPONENTS: Gene Huntington, representing the governor's office, supported SB 277. He noted that in 1983, the appro­priations committee said that future RIT funds were not to be used for ongoing budget operations. That left the problem of determining how RIT funds should be allocated, he said, and resulted in the drafting of SB 277, which sets out both the policy and the design of the legacy program. Drafters of the bill, faced with the difficulty of finding projects that would not be ongoing, felt it would be better to put goals on long-term programs, and not to earmark specific types of projects, said Mr. Huntington.

Natural Resources Co~mrttee March. 25, 1985 Page 3

Larry Fasbender, director of the department of natural resources and conservation, spoke in support of SB 277. He said the main issue being debated is the question of whether the legislature should be able to make specific ohoices about how RIT funds should be spent. The more closely you restrict the legacy program, the fewer choices are available~ he said. Mr. Fasbender told the committee that the needs of Montanans have clearly changed over time, and the priorities for legacy funding can be expected to change in the future. That is why SB 277 is a broad bill, allowing choices to be made in the future as program needs change, said Mr. Fasbender.

Jeanne-Marie Souvigney, representing the Northern Plains Resource Council, spoke to the committee about the need for a legacy program. She distributed to the committee a chart displaying the setup o£ the current resource indemnity trust program, the proposed SB 277 program, and the proposed HB 913 program. The chart is attached as Exhibit 2. Ms. Souvigney said NPRC is concerned about the issue of earmarking partic­ular funding categories, which may limit certain programs. She cautioned, however, that under SB 277, the proposed program is broad enough to "fund just about anything." She told the comittee that there are problems with both bills, and urged the committee to work out the differences between the proposals to arrive at an optimum program.

Mary-Linda Kemp, representing the Northern Lights Institute, said that group feels that HB 913 is a better proposal than SB 277, but supports the legacy program in whatever form might be approved.

OPPONENTS: George Ochenski, representing the Montana Environmental Information Center, appeared before the committee carrying a brown paper grocery bag, and opened by saying he wished he did not have to speak against SB 277. However, the specific mechanisms of both bills lend themselves to a supermarket analogy in which HB 913 comes out preferable, he said. He then emptied the contents of the bag, noting that an average shopping list would include a variety of items--in this case, fish, an artichoke, fruit, Twinkies, beer, hot dogs, and bread. Forced to choose between the products, nhe shopper would do well to categorize them -­fruits, vegetables, breads, meats, and so on, he said. By analogy, when faced with a variety of RIT funding requests, the state· would benefit by assigning those requests to specific categories, and weighing water projects against one another, weed control projects in another category, and so forth. That, he said, is done in HB 913, and not in SB 277. That organ­izational head start would allow better distribution of lega~y money, and avoid a pork barrel approach to specific projects, he said. SB 277 would throw all the groceries

Natural Resources Committee March 25, 1985 Page 4

into a food processor, and the resultant soup would not satisfy anyone, he said.

Rep. Dave Brown, sponsor of HB 913, spoke against SB 277. He said there were two main reasons to oppose the Senate's legacy program bill. The first, he said, is that SB 277 would allow every session of the legislature to reset policy, and that the legacy program should be allowed more continuity. HB 913 would provide that continuity, he said. Secondly, Rep. Brown stated that the earmarking in SB 277 "is just disastrous" and does not meet the state's current or future needs. SB 277 addresses only RIT funds and renewable resource development projects, while the state faces pressing problems in water development, weed control and other issues.

Rep. Brown said the one amendment he would offer to SB 277 is HB 913. He recommended that the bill not be killed in committee, but rather be defeated on the House floor.

There were no further opponents to SB 277, and the £loor was opened to questions from committee.

Rep. Miles asked Mr. Fasbender about the process a funding request would follow under the provisions of SB 277. He said that applications for legacy funding would be ranked by an advisory council, referred to to the director of DNRC for further consideration, recommended to the governor, and passed to the legislature as proposed legislation.

Rep. Miles asked if the process would be the same under HB 913, with the difference that the applications would be first assigned to categories. Fasbender said that was essentially the case, except that the original reviewing boards would be differently stru~tured.

Rep. Peterson asked Rep. Brown if HB 913 contains a provision for emergency project funding, and was told that it does.

Rep. Kadas asked Mr. Huntington how the legacy program as set up under SB 277 could be used for funding weed and water projects, when those types of projects are not s~ecifically addressed in the constitutional basis of the RIT funds. Mr. Huntington replied that the stated intent of the RIT program was that funding be applied to renewable and nonrenewable resource projects, and that agriculture is a resource that falls under that intent.

Sen. Blaylock closed by saying that the bill is preferable to HB 913 precisely because of its different policy approach. The less restrictive approach is the bebter option for the state, he said.

Natural Resource& Comm~ttee March 25 t 1985 Page 5

EXECUTIVE ACTION

SENATE BILL 156: Rep. Kadas moved that SB 156 BE CONCURRED IN. The mot10n passed without discussion, with Rep. Harp voting no.

SENATE BILL 284: Rep. Cobb moved that SB 284 BE CONCURRED IN. Rep. Driscoll commented that the legislature has worked on conflicting bills regarding coal board money. He said he supports SB 284, but said that at some point, all the bills based on coal board money will have to come together. The bill passed with Rep. Harp voting no.

SENATE BILL 258: Rep. Addy moved that SB 258 BE CONCURRED IN. Rep. Miles moved an amendment she prepared that would refer the notice question in the bill back to the appropriate existing statute. Rep. Krueger suggested that the committee address the issue of adequate notice. He said drillers must have an idea of proposed projects more in advance than three days, and did not think the three-day notice was fair to surface owners.

Rep. Iverson said it is not unusual for a potential driller to check into existing leases, find an available drilling rig, and move into operation in two days' time.

Rep. Krueger maintained that if the legislature is concerned about the surface owner, the three-days' notice provision is inadequate, and said the time period should be longer. Rep. Raney said he agreed with Rep. Krueger on that point.

Rep. Cobb suggested that the notice provision be amended to 10 days, and the House should wait and see how the Senate views that amendment.

Sen. Tveit, the sponsor of the bill, was allowed to comment, and said the three day provision allows adequate notice.

Rep. Krueger again maintained that three days is insufficient time for negotiation or redress, and asked what the problem would be with a ten day provision. Sen. Tveit replied that the holder of the mineral rights has a right of access, and that settlement of damages due to access is not usually a problem. Rep. Krueger asked why there should not be a misdemeanor clause in the bill requiring due notice, and Sen. Tveit said that such a clause would be meaningless because the costs of developing a mineral right are much higher than the potential misdemeanor penalty could be.

Rep. Iverson said he was concerned about the apparent pre­sumption that the landowner is "the good guy and the oilman is a rapist." That is not necessarily so, he said, and the committee should keep in mind that surface and mineral rights are equal property interests under the law.

Natural Resources Committee March 25, 1985 Page 6

Rep. Krueger said that if the committee were not willing to add a misdemeanor clause, he would push for an expanded time period for notice. He moved that the bill be amended to allow for no fewer than 14 days' notice by the developer of the mineral rights of proposed activity. That motion failed 9-8. A copy of the roll call vote is atuached following the standing committee reports.

Rep. Addy, a supporter of that amendment, said 14 days is not unreasonable, noting that the eminent domain bill passed in committee calls for 30-days' notice.

Rep. Krueger then moved that the notice clause be amended to require 10 days' notice. That motion passed 9-7.

Rep. Addy then moved that SB 258 BE CONCURRED IN AS AMENDED, and that motion passed with Reps. Smith, Cobb and Iverson voting no.

There being no further business before the committee, the meeting was adjourned at 7: 4 0 p.m.

\

Re~~IVERSON' Chairman

DAILY ROLL CALL

HOUSE NATURAL RESOURCES cmn.lITTEE

49th LEGISLATIVE SESSION 1985

Date ~(;ff z.~-

~------------------------------- ------------ -----------------------NAHE PRESENT ABSENT EXCUSED

IVERSON, Dennis (Chairman) )( KADAS, r.1ike (Vice-Chairman) ~ ADDY, Kelly I ~ ASAY, Torn I ~ COBB, John X DRISCOLL, Jerry X GARCIA, Rodney I 'X' I

GRADY, Edward i 'i( I

I 'i I HARP, John I

i

i Xl I I JONES, Tom I I I 'X I KRUEGER, Kurt I I

HILES, Joan X i·1QORE, Janet I X I I I

O'HARA, Jesse I X I I ·X I

PETERSO;;1, Mary Lou I I X i

RANEY, Bob I I

I X I I I

REAM, Bob

S;UTH, Clyde I 'X I

i I

I I !

1 I I ! i

I I I i

I i

I I I I

I I

I I

I I j I !

I I CS-30

STANDING COMMITTEE REPORT

?AGlt 1 OF 2 March ZS 35 .................................................................... 19 ........... .

SP~Ai~!tR: MR .............................................................. .

. . ~ATURAL aBSOURC~S We, your committee on ...................................................................................................................................................... ..

having had under consideration ...... J~~P.'l.'.~ .. JH.1t1-P ............................................................................ Bill No . .. 2.S.9 ...... .

Tl!I1U> iU .. UX "'. ) ____ -,--____ reading copy ( ___ _ color

Atl ACT aEVISING THE LAW RELATIUG TO COHPBllSATIOtl P'AYAlilLE FOll

Respectfully report as follows: That ...................... S.'i:.~A!~&:. ... a.tL~ ... J.S.a ............................................ Bill No .................. .

1) Title. lifts 13. Following: ~ANB*

Insert; ft32-10-50~,~

Followlnqt ·6l-1Q-~04· Iusert! .• , ..

STATE PUB. co. Helena, Mont.

~.~ .... ~.~ .......................................................... . Chairman.

Rep. DENNIS IVERSO~

COMMITTEE SECRETARY

, :; ('

paGE : OF 2' HAllett 25 19 .... ~.'- .. ....................................................................

2) ?a'i. 2. Follow1agl lin. l~ IIl •• rt:~ *Sect1011 1.. Section 82-1.0 ... 503,. NeA, 1 ••• end.4

to read;

-82-10·503. Kotic. of d~1111n9 operations. IA addition to t~o roq.ar ... nca ter geophysIcal oxp1oratloA activitl •• qoverned by ~ltl. 82, cllapter 1, pare 1, t~. oil .114. va- d ..... l.op.r er operator shall 9iv. the .. r~ac. owaer aa4 any purehaaer uader .0Atra~~ tor d •• 4 vrltte. notice of ta. drilling' operation. that. he pla.s to UD~.rtak.. TUi. Dotice ahall _. 91.0. to ~h. record. surf.ce owner and-,any pllrclla •• r: H4 •• contrAct for deed at their ad ......... a abown Dr tbe records of the couaty clerk aDd recorder At the tl •• t~. Aotice 1& ~iY.A. This Dotioe ellall su.tfielantly cU .• clos. tbe plan of vork and o~.Z'&tloll. to ellable tha surface ovaer to evaluate the .ffect of 4ril.l.1a4 operations Oil the .arfac. owner'. U •• ot ta. property. !~~~~!~~ 2~_!1 Jl~ s.l..!en. n~.I!~JF.!....£)u~.~_!!!._~t.!._~!-C!...!~ ~~!......!Ldi!.t... b.~!'!".~~J! .. ~!~!tnt. o.~_~!L_~tl .• ,l~l. ou tbe land suriace.·-____ ._h ___ ~ __

J) Page 4, laAe 7. Strike: .. u'! ~i; ~_~!-.. ~Z' f~t:'e owner _ o..! __ lli -!.P..!.!!!!!!_~t;g~J..o.!!.· I» •• rtl ·co.ply with the notice require •• nt. of 32-10-S03 P

4) Pa~. 4, 11n. 13. Strik., -2" %na.rt: lit 38

5) Page 4. lia. 15. St.rike t -2-Ia •• rti -3- ,

liE COtiCUllaJU) Ili ____ • _ L ___ _

STATE PUB, CO. Helena. Mont.

)

STANDING COMMITTEE REPORT

MARcn 2S 95 .................................................................... 19 ........... .

SPEAK:eJl: MR .............................................................. .

We, your committee on ................. J~~:+.r!.~.~.~ ... ~~H~9.~~~~.~.~ ..................................................................................... .

having had under consideration ................... ::?r.X{li,~~ .... ;U.MM ... nU ..................................................... Bill No ................. .

_---''f!<.;!'''''i.."l-''='iill ______ reading copy ( llLUE color

AS A<:l" REVtS~:.iG p ~oVISIOIlS Faa tU::rAY}(Zlt'l' OF COAL SOARD L>lAUS

SEdAT~ BILL 23' . Respectfully report as follows: That ............................................................................................................ Bill No .................. .

STATE PUB. co. Chairman. Helena, Mont.

COMMITTEE SECRETARY

STANDING COMMITTEE REPORT

MARCR 25 as .................................................................... 19 ........... .

MR ........ :iP.f;.a.al::.B.!. ................................ .

We, your committee on ............... );U~,~.O.i'U..r., ... )).f:.s.O'rJ.J,,;C.r.~ ........................................................................................ .

having had under consideration ................ s.E~A'.t.E. .. :sI.!.I... .. .lS.tL ...................................................... Bill No ................. .

___ A_4_H..,.I_R_l') ___ reading copy ( fU .. UE color

Mi .;\C1' CUAlfGI~G '!'n~ DES:ro;NA1'IO:1 C1U'1'""ERIA POR COAL :SOARD

Respectfully report as follows: That ........... ~.;t.~A:+.~ ... ~.~.:;,.tt ... ,\..~.~ ....................................................... Bill No .................. .

STATE PUB. co. Rep. D£~~lS IV£RSO~t Chairman. Helena, Mont.

COMMITTEE SECRETARY

ROLL CALL VOTE

HOUSE COMMITTEE NATURAL RESOURCES

DATE TIHE '-1.'3 0

NAME AYE NAY

IVERSON, Dennis (Chairman) ~ KADAS, Mike (Vice-Chairman) '( ADDY, Kelly "" ASAY, Torn y COBB, John V DRISCOLL, Jerry GARCIA, Rodney GRADY, Edward : HARP John JONES Torn . )(

KRUEG:C:R L Kurt 1\ 111 LES Joan V MOORE Janet I O'HARA Jesse '\...G' PETERSOIJ, Mary Lou j( RA~EY Bob \L REN"l Bob _X _~"lLTR Clyde V' "-

I

Secretary Chairman

Motion:

CS-31

ROLL CALL VOTE

HOUSE COMMITTEE NATURAL RESOURCES

DATE BILL NO. S~ 2 ~8" Tum ----1,'35 NAME AYE NAY

IVERSON, Dennis (Chairman) ~ KADAS, Mike (Vice-Chairman) i ADDY, Kelly A ASAY, TOI<\ X COBB, John / DRISCOLL, Jerry X GARCIA, Rodney "- '( GRADY, Edward )( HARP, John JONES Tom . X KRUEGER Kurt Ji. ,ULES Joan ~ MOORE Janet V,

O'HARA, Jesse '''l PETERSON Mary Lou -x: RANEY Bob X. RF.AM Bob -~ S:·!ITH Clyde X

9 1 Secretary Chairman

Motion:

CS-31

EN

ER

GY

FOR

TH

E N

AT

ION

, E

CO

NO

MIC

GR

OW

TH

FOR

M

ON

TA

NA

In a single generation, we have becom

e acutely aware of o

ur

reliance on

foreign sources of fuel. With the oil em

bargo of 1973 cam

e a national plea for energy independence, and domestic coal

emerged as an

economical alternative fuel for the 1980s an

d beyond.

Approxim

ately 75 billion tons, or 25%, of the U

.S. coal reserves lie in

the State of M

ontana: 1£ Am

erica is to achieve energy indepen­dence, M

ontana's coal mu

st play

a vital role.

The M

ontco mine is expected to produce m

ore than 186 million tons

of private and

state coal-th

e equivalent of 651 million barrels of

oil-a

t a maxim

um rate of 12 m

illion tons annually. The econom

y of the S

tate of Montana is expected to benefit substantially from

the developm

ent of the Montco m

ine. During the 24-year life of the

mine (construction an

d operation), m

ore than $3.7 billion will be

added to the state in the form of increased business activity, tax

revenues and

personal income.

..4

~tt

TH

E M

ON

TC

O PR

OJEC

T AR

EA

Montco is a M

ontana general partnership located in Billings, an

d

owned b

y T

ongue River R

esources, a subsidiary of Diam

ond S

hamrock C

orporation, Dallas, an

d T

hermal E

nergy, Inc., a sub­sidiary of W

ashington Energy C

ompany, S

eattle.

Developm

ent of the Montco properties began in 1973 w

ith acqui­sition of surface and coal leases an

d geological exploration. T

he M

ontco project area is located approximately 7.5 m

iles southwest of

the com

munity of A

shland in southeastern Montana. T

he reserves lie w

ithin the Montana portion of the P

owder R

iver Basin in the

Tongue R

iver mem

ber of the Fort U

nion Form

ation. The coal to b

e m

ined averages 8,752 BT

Us p

er pound, 27% m

oisture, 6.35% ash

and

0.34% sulphur (as received).

TH

E M

INE

PL

AN

AR

EA

T

he 24-year-life of Montco's m

ine consists of five mining units

(North K

ing, South K

ing, North O

'dell, South O

'dell and

South G

ate) an

d support facilities w

hich include shop/offices, coal handling and

storage structures, an

d a rail loop. T

his total area known as the m

ine plan area encom

passes 10,171 acres.

TH

E P

ER

MIT

AR

EA

U

nder State an

d F

ederal laws, M

ontco is required to apply for a separate perm

it for each of the five m

ining units. In Novem

ber 1980, M

ontco filed for a permit o

n its N

orth King M

ining Unit. T

he perm

it area totals 1,274 acres and includes only the North K

ing M

ining Unit and the F

acilities Area. T

he permit w

ould allow M

ontco to undertake the construction of the facilities, the developm

ent of the pit and three years of initial m

ining operations before applying for an

additional five-year permit.

PER

MIT

AR

EA

PL

AN

-NO

RT

H K

ING

MIN

ING

UN

IT

Coal

Storage F

acility

-P;. +j

•

AR

EA

TO

BE

M

INE

D

TH

E PE

RM

ITT

ING

PRO

CE

SS

Like all n

ew d

evelo

pm

ents, th

e Mo

ntco

project is and

will b

e sub­ject to p

ub

lic scrutin

y an

d co

mp

rehen

sive g

ov

ernm

ental rev

iew

and

app

rov

al.

Surface m

ining in Montana is regulated by the M

ontana Dep

artmen

t o

f State L

ands (DSL

) and

the U.S. D

epartment of the Interior's O

ffice of S

urface Mining. S

ince Montana has a federally approved

regulatory program, the D

SL w

ill be the agency issuing m

ining p

ermits to M

ontco.

Th

e regulations and

guidelines developed by the DSL

in adm

inister­ing th

e Mo

ntan

a Strip an

d U

nd

ergro

un

d M

ine Reclam

ation Act

assure th

at the en

viro

nm

ent of the M

ontco project will b

e pro

tected

before, du

ring

and

after mining.

In 1977, M

on

tco en

tered into an

agreement w

ith the D

SL

wh

ereby

th

e two

parties jointly dev

elop

ed environm

ental study designs and

selected consultants to co

nd

uct the extensive environm

ental base­line studies an

d on-going en

viro

nm

ental m

onitoring pro

gram

s req

uired

by law as p

art of the perm

itting process.

Th

e 35-volume, ap

pro

xim

ately 5,000-page M

ontco perm

it applica­tio

n took th

ree years to assem

ble. It involved more th

an 100 m

an­y

ears of effort, and

tells in detail ho

w M

ontco will ad

here to th

e strict en

viro

nm

ental law

s of M

ontana, returning the min

ed lan

d to a

pro

du

ctive condition that is eq

ual to o

r better than before m

ining.

Protecting the h

um

an en

viro

nm

ent is also a concern. M

on

tco

realizes the potential im

pact its w

orkforce and

their families w

ill h

ave o

n neighboring com

munities, an

d as a result, is w

ork

ing

with

state an

d local agencies.

EN

VIR

ON

ME

NT

AL

BA

SEL

INE

STU

DIE

S

Th

e following en

viro

nm

ental studies h

ave b

een co

nd

ucted

in the

Mo

ntco

project area to satisfy perm

itting

requ

iremen

ts, and

to g

ather th

e necessary inp

ut for th

e min

e plan, fish and

wildlife m

an­ag

emen

t plan, and

reclamatio

n activities. T

hese studies will also

pro

vid

e a ben

chm

ark for detecting an

y im

pacts of the p

rop

osed

m

ine, and

measu

ring

reclamatio

n success.

AIR

RE

SO

UR

CE

S

Th

e weath

er in and

arou

nd

a coal min

e is a determ

inin

g factor of

the m

ine's affect on

the atm

osp

here. To o

btain

an accu

rate assess­m

ent of th

e conditions for the cu

rrent m

eteorology, visibility and

air quality of th

e area, mo

nito

ring

stations were located w

ithin

and

aro

un

d th

e Project A

rea. Th

e data w

ere then

com

piled

to sup

po

rt th

e air quality modeling effort designed to d

etermin

e potential ch

ang

es in amb

ient air q

uality

wh

ich m

ight occu

r from

the pro­

po

sed m

ining operations. Th

e data w

ill also be u

sed to o

btain

an air

quality perm

it from th

e Air Q

uality

Bu

reau o

f the M

on

tana D

epart­m

ent of H

ealth an

d E

nv

iron

men

tal Sciences.

BIO

LO

GIC

AL

RE

SO

UR

CE

S

Th

e Biological R

esources studies involved the collection of baseline

data o

n four m

ajor areas: vegetation, w

ildlife, aqu

atic ecology and

fisheries.

• The vegetation stu

dy

was the first baseline study im

plem

ented

on

th

e Montco P

roject Area in th

e sum

mer of 1977. F

ield studies and

literature searches w

ere used to identify all species within the

stud

y area. P

lant comm

unities were m

app

ed an

d plant produc­

tion measu

red for future com

parison with reclaim

ed areas.

j

• Th

e wildlife stu

dy

is one of the m

ost time co

nsu

min

g an

d exten­

sive studies requ

ired b

y th

e regulations. A w

ildlife biologist was

requ

ired on-site full tim

e for a min

imu

m of one year. T

here­after, w

ildlife monitoring is req

uired

for a min

imu

m of 100 m

an­d

ays p

er year thro

ug

ho

ut the life of th

e mine. A

variety of aerial an

d g

rou

nd

observation techn

iqu

es were u

sed to identify

wildlife species in th

e area. Population densities, habitat an

d

migration d

ata were collected for fu

ture co

mp

arison

du

ring

and

after m

ining.

• Because th

e Tongue R

iver flows along th

e west b

ou

nd

ary of th

e P

roject Area, aquatic ecology an

d fishery studies w

ere necessary to d

etermin

e the affects of fu

ture m

ining and

increased hu

man

activity in th

e area. Water quality an

d biological co

mm

un

ities w

ere samp

led in th

e Tongue R

iver and

its tributaries. Com

pari­sons w

ill be mad

e before, du

ring

and

after mining. In th

e same

man

ner, th

e status of the fisheries in th

e Tongue R

iver and

its m

ajor tributaries were studied.

CU

LT

UR

AL

RE

SO

UR

CE

S

Th

ese stud

ies were co

nd

ucted

to identify, inv

ento

ry an

d ev

aluate

po

tential im

pacts to historical, archaeological an

d paleontological

(fossils) sites with

in th

e stud

y area. T

he su

rvey

s inclu

ded

an inten­

sive 'on-foot' inv

ento

ry of 14,645 acres, as w

ell as site specific investigations.

Mitigation p

lans w

ere dev

elop

ed for th

ose areas th

at wo

uld

receiv

e either d

irect or in

direct im

pacts.

GE

OT

EC

HN

ICA

L R

ES

OU

RC

ES

S

oils and

ov

erbu

rden

data w

ere collected for use in the design of th

e m

inin

g an

d reclam

ation plans. Pre m

ining soil inventories were per­

formed to collect inform

ation on

soil types, quantity and

distribution.

This w

as done by mapping the soils from

aerial photos and

taking sam

ples in the field. M

ontco collected approximately 800 soil

samp

les and

con

du

cted 11,200 soil analyses.

Ov

erbu

rden

drilling was conducted throughout th

e Project A

rea to d

etermin

e thickness and

to obtain samples for su

bseq

uen

t analyses. O

verb

urd

en d

ata consist of more th

an 50,000 lab

orato

ry analyses

from 71 drill holes.

WA

TE

R R

ES

OU

RC

ES

W

ater resource studies included surface water, g

rou

nd

water, w

ater quality an

d erosion an

d sedim

entation. Gro

un

dw

ater studies are req

uired

for bo

th th

e local area and

the region. Surface w

ater and

erosion an

d sedim

entation studies were required for th

e entire drain­age basin in w

hich

the Project A

rea is located. Water quality studies

were conducted o

n the T

ongue River and its m

ajor tributaries.

To define the g

rou

nd

water system

, 88 wells w

ere com

pleted

in the aquifers occurring in th

e coal seams an

d in

terbu

rden

. Th

e wells

were periodically p

um

ped

to determ

ine w

ater quality, qu

antity

and

seasonal changes in w

ater level. Data collected has b

een used to

define the curren

t hydrologic conditions against wh

ich future

changes, if any, may b

e measured. T

he information w

as also used to assess the suitability of the w

aters for drinking, irrigation and

live­stock use, an

d to provide input for m

ine and reclamation plan design.

ON

GO

ING

EN

VIR

ON

ME

NT

AL

MO

NIID

RIN

G

After the co

mp

letion

of the baseline studies, env

iron

men

tal moni­

toring pro

gram

s were im

plemented. T

hese monitoring p

rog

rams

will co

ntin

ue th

rou

gh

ou

t the life of the mine an

d for an

additional ten

years after cessation of mining. T

he monitoring p

rog

rams w

ill p

laya key role in M

ontco's on-going reclamation activities.

TH

E M

ININ

G A

ND

R

EC

LA

MA

TIO

N PR

OC

ESS

Mo

ntco

is com

mitted

to adv

anced

surface mining tech

niq

ues an

d a

reclamatio

n p

rog

ram th

at will retu

rn th

e distu

rbed

areas to their

equ

al or b

etter use. Th

e reclamatio

n p

lan is an

integral part of

Montco's m

inin

g p

ermit ap

plicatio

n an

d w

as dev

elop

ed b

y a

reclamatio

n team

wh

ich in

clud

ed en

viro

nm

ental co

nsu

ltants,

Mo

ntco

perso

nn

el, and

land

ow

ners w

ithin

the P

roject Area.

Th

e reclamatio

n p

rocess w

ill beg

in w

hen

mining begins. M

on

tco

pro

po

ses to min

e the coal b

y th

e truck/shovel meth

od

. Before m

in­ing can

begin, a pit mu

st be developed. F

irst, the topsoil m

ust b

e rem

ov

ed, stockpiled, an

d protected from

erosion with

a vegetative crop. T

he next layer, kn

ow

n as overburden, is th

en rem

ov

ed an

d

stockpiled. Th

e coal is then

remo

ved

and

hauled by truck

to the

nearb

y crushing area. T

he coal is crushed in tw

o stages to less than

tw

o inches in size, th

en conveyed to a covered storage facility o

r directly loaded ab

oard

1O,000-ton unit trains. A

s the coal is removed,

the m

ine area w

ill be continuously recontoured, revegetated an

d

return

ed to productive use.

NO

RT

H K

ING

MIN

ING

UN

IT

RE

CL

AM

AT

ION

& B

ON

DIN

G C

OST

S In th

e 1,274-acre perm

it area alone, Montco is com

mitted to a $26.8

million in

vestm

ent in

reclamatio

n an

d bonding costs to assu

re protection of th

e env

iron

men

t during and

after mining.

TR

AN

SPOR

TIN

G T

HE

C

OA

L 1D

MA

RK

ET

In March

1980, the T

ongue River R

ailroad Co

mp

any

was form

ed to begin p

lann

ing

efforts for the d

evelo

pm

ent o

f a coal transp

ortatio

n

system

serving the A

shland-Birney/O

tter Creek

area. Participants in

th

e railroad are Wesco R

esources; D S C

artage Corporation, a sub­

sidiary of Diam

on

d S

ham

rock

Corporation; O

tter Creek

1ransporta­tion C

om

pan

y, a subsidiary of C

onsolidation Coal; an

d T

hermR

ail, Inc., a su

bsid

iary of W

ashington Energy C

om

pan

y.

Th

e Tongue R

iver Railroad w

ou

ld carry

coal by

un

it train 89 m

iles n

orth

to Miles C

ity, wh

ere the B

urlington No

rthern

Railroad w

ou

ld

transp

ort it to co

nsu

mers in th

e Pacific N

orth

west, U

pp

er Mid

west

or G

reat Lakes area.

EC

ON

OM

IC B

EN

EFIT

S 10

MO

NT

AN

A

Personal Incom

e in M

ontana ............. $971.8 Million

Montco E

xpenditures ................... $907.8 Million

New

Business O

ther T

han

Montco ......... $988.2 M

illion S

tate & L

ocal Tax R

evenues .............. $848.8 Million

Total E

conomic B

enefits ............. $3.72 B

illion

The M

ontco mine w

ill provide substantial economic an

d em

ploy­m

ent contributions to the S

tate of Montana an

d its people, according

to a stud

y b

y R

esearch Developm

ent Consultants of F

argo, North

Dakota, com

pleted in M

arch 1983. D

evelopment of the m

ine project w

ill enh

ance M

ontana's economy b

y contributing m

ore th

an $3.7

billion in the form o

f increased business activity, tax revenue and

personal incom

e.

Th

e stud

y assessed the direct an

d secondary (indirect) econom

ic benefits to th

e state during the four-year construction an

d 22-year

operational life of th

e mine. W

ith a two-year overlap, the entire

project life is plan

ned

for 24 years.

EM

PLO

YM

EN

T A

ND

PER

SON

AL

INC

OM

E

Directly an

d indirectly, m

ine operation (22 years) will create over

2,390 perm

anen

t new

jobs in M

ontana with

an an

nu

al personal incom

e of $42.8 m

illion. It is anticipated that 365 of these jobs will

be directly associated w

ith the m

ine, while the rem

aind

er will be

secondary jobs in several sectors o

f Montana's econom

y such as retail trade, professional an

d social services an

d governm

ent.

Additionally, an

ann

ual average of 938 jobs w

ill be created during

the four-year construction phase with

an an

nu

al payroll of approxi­m

ately $7.7 m

illion.

Altogether, it is estim

ated that the M

ontco Mine project w

ill add

m

ore th

an $971 m

illion to personal income in M

ontana through m

uch

needed new

employm

ent and

associated payrolls.

MO

NT

CO

EX

PEN

DIT

UR

ES A

ND

O

TH

ER

NE

W B

USIN

ESS A

CT

IVIT

Y

Montco w

ill spend nearly $908 million in M

ontana during the 24 years required to build and operate the m

ine. In addition to direct spending b

y M

ontco, the study identified the secondary (indirect or induced) new

business that would be generated b

y the m

ine project in the regional econom

y. An

additional $988 million w

orth

of new

business to the M

ontana economy w

ould result from the life of the

Montco m

ine (an average of more than $41 m

illion per year).

TA

X R

EV

EN

UE

S AN

D R

OY

ALTIES

As a result of the construction an

d operation of th

e Montco project,

as well as th

e secondary business generated, state and

local govern­m

ent entities in M

ontana are expected to realize an additional $849

million in

tax revenues and royalties over the life of the mine.

Governm

ent-supported services for the people of Montana w

ill gain approxim

ately $35.4 million annually. T

he various taxes include: coal severance, resource indem

nity, gross proceeds, local property, corporate incom

e and

personal income.

POST

SCR

IPT

Mu

ch can b

e said about the excellent quality of life we have in

M

ontana. But as a practical m

atter, it takes jobs and

a stable econom

y for us to enjoy the values that our state has to offer. Public

opinion studies show that M

ontanans support environmentally

responsible projects wh

ich create jobs for our children, b

road

en o

ur

economy an

d provide a strong tax base.

Th

e future of coal development in M

ontana can be described as

'promising,' a w

ord

seldom heard in

these times of high unem

ploy­m

ent an

d a sagging econom

y.

LEGACY PROGRAM PROPOSALS

Currently:

, .625% Coal Severance Tax Proceeds r Resource Indemnity Tax .625% Coal. Severance

(~% tax on minerals) .

(1~ of proceeds remaining after tax Proceeds - . ~. -", - 50% allocation to cQal trust fund.l_ . .... . - -

' .. "I' Renewable Resourc s Development Funq i .. ~ Resource Indemnity Tax Trust I

;

Fund - must reach $100 million (projects for conservation, manage-j 'Water Development before future receipts spent ment, utilization, development or

\ I

Interest on Trust Fund: preservation of the tand, water, fish, wildlife, other renewables) ~ I

30% to MT.I 6% to I other . !

water dev. hazardous 40% to water I 15% to timber stand I

program I waste I development improvement; 15% to; program projects ag land improvement;

I I

I 10% to coservation districts; 20% to i . other (3/4 of this I

..

I goes to loans under; HT Rangeland Re-sources from 7-1-83

I to 6-30-89) . -

Under .SB 277 (Blaylock):

RIT Interest: .625% Coal Tax Proceeds .625% Coal Tax Proceeds '\,.

.... .,30% to HT .\6% to water dev. hazardous

64% to Legacy program

~(Renewable Resources I Development Program ~ ~ Water Development program waste

program

-I ELIMINATED; . I

~. ______ $_$ to Water Developm~ MT. Rangeland Resources Program until 6-30-89

Legacy Program

Up to 10% for emergencies; balance used for reclamation, reforestation, purchase of recreational areas, mitigation of social and economic impacts of resource extraction, soil and water conservation, weed control, research and development projects, and remediation of hazardous waste sites; admin­istrative costs.

Under HB 913 (D. Brown):

RIT Interest: I .625% Coal Tax Proceeds I (To Legacy Program) I (To Legacy program:---l

--- -'-- L ~ Legacy Program \V

Environmental Contingency Account Admininstrative costs 37% - water development 37% - mineral reclamation and research 15% - renewable resources 11% - hazardous wastes

I .625% Coal

r- (To

Tax Proceeds

Legacy Program)· I

HT. Rangeland ,It Resources Prog. until 6-30-89

J-M S Northern Plains Resource Council

VISITOR'S REGISTER

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