US court faults Signal Peak coal mine expansion review

The US Interior Department's Office of Surface Mining Reclamation and Enforcement (OSMRE) fell short in its environmental review of a plan to expand Signal Peak's Bull Mountains underground coal mine in Montana, the 9th US Circuit Court of Appeals said.

In a 2-1 decision on 4 April, the court ruled that OSMRE did not provide any "convincing rationale" for determining that expanding the mine would have no significant impact on greenhouse gas emissions. It determined that the agency violated the National Environmental Policy Act (NEPA), partially upheld a 2020 ruling from the US District Court for the District of Montana and remanded the case back to the lower court.

But the appeals court kept OSMRE's approval of the expansion in place and left it up to the lower court to determine whether the agency needs to perform a more comprehensive environmental impact statement.

"Additional factfinding is necessary," to decide whether OSMRE needs to conduct an environmental impact statement, the majority opinion said.

While OSMRE "did not account for the emissions generated by coal combustion, obscuring and grossly understating the magnitude of the mine expansion's emissions relative to other domestic sources of GHGs," the judges in the majority were "not persuaded" that the agency needed to use the so-called social cost of carbon metric — which was espoused by environmental groups in the lawsuit — to quantify the costs of GHG emissions. They also said it was not clear that OSMRE had any other measure available to examine the environmental affect of the project.

The ruling is a partial victory for environmental groups including the Sierra Club, Montana Environmental Information Center, WildEarth Guardians and Western Environmental Law Center. The groups initially sued OSMRE in 2015 claiming the agency violated NEPA when it published a finding of no significant impact that allowed Signal Peak to access an additional 2,540 acres of federal land. Signal Peak also has state regulatory approval to access additional state and private property that brings the total expansion area to 7,161 acres with 176mn short tons (160mn metric tonnes) of coal reserves.

The US District Court for the District of Montana agreed with the environmental groups in 2017, and halted operations on the mine expansion while OSMRE performed another review. The court later mostly upheld the revised environmental assessments OSMRE published in 2018 and in 2020.

Allowing Signal Peak to mine from the expansion area would produce about 240mn tons of greenhouse gas pollution according to Sierra Club staff attorney Nathaniel Shoaff.

"The most important thing is that now it is absolutely the clear that the ultimate decider here is going to be the administration of President Joe Biden," he said. The administration will have to "take a new look at the climate impacts of this mine, and then decide whether it allow this expansion to go forward or not."

Signal Peak and OSMRE declined to comment.

The Bull Mountains mine produced 7.25mn st of coal last year, which was up from 2020 and 2019 but down from 7.57mn st in 2018, according to US Mine Safety and Health Administration data. The Montana mine produces a higher-heat 10,300 Btu/lb coal. Over 95pc of Bull Mountains' coal is exported to northeast Asia, Chile, and Hong Kong.

By Elena Vasilyeva