Federal panel won't halt Montana coal railroad

BILLINGS — A federal panel has rejected an attempt by conservationists to halt the construction of a long-stalled 121-mile railroad that would open a new area of Montana to coal mining.

The Surface Transportation Board said opponents failed to show why the $550 million rail line needed further environmental review. The decision came Wednesday in response to a petition by the Northern Plains Resource Council and Montana rancher Mark Fix, who lives along the proposed railroad route.

"We believe that (the Tongue River Railroad Company) should be allowed to move forward with this project without being subjected to the delay, costs and uncertainty that reopening this case now would cause," the decision said.

The petition was one of several legal challenges by environmentalists seeking to stall Gov. Brian Schweitzer's push for a major expansion of coal mining in the state.

Schweitzer and industry representatives have heavily promoted the growth potential in Asian markets, although domestic coal markets are projected to remain relatively stable in coming years.

The mines best poised to serve those markets are in the Powder River Basin of Wyoming and Montana.

The Tongue River Railroad would make it easier to get coal from the basin to ports on the West Coast by providing a new connection to an existing BNSF Railway Company line in Miles City.

Schweitzer was in China Thursday traveling with a Council on State Governments delegation. Last week, he delivered the keynote address at an Asian coal industry conference in Beijing.

The Northern Plains Resource Council said in response to Wednesday's decision that the transportation board was "turning southeast Montana into a sacrifice zone for Asia."

"The Tongue River Railroad will be built to serve Asia, not the U.S.," said Northern Plains board member Jeanie Alderson of Birney, a ranching community near the Wyoming border.

Opponent wanted the line reconsidered in light of the last year's leasing of the state-owned Otter Creek coal tracts, where a mine has been proposed that would be served by the railroad. Also, since the railroad got its first approval more than 25 years ago, substantial scientific research has linked the burning of coal to global warming, the opponents said.

Tongue River Railroad developer Mike Gustafson said the decision underscored that there had been adequate chance for the public and government agencies to weigh in during the permitting process.

"TRCC believes the STB decision once again reaffirms the comprehensive environmental analysis completed by the TRRC in its planning," Gustafson added in a statement.

Over the past two years, mining industry giant Arch Coal, Inc. of St. Louis has paid $159 million to amass leasing rights on 1.5 billion tons of coal in the Otter Creek tracts near Ashland. That includes tracts owned by the state and Great Northern Properties of Houston.

But Arch needs a new rail line to realize its plan to ship the coal to markets in the Midwest and to Asia. Gustafson has been in discussions with Arch about serving a new mine, but no deals have been announced.

A longstanding appeal of the railroad's approval is before the 9th Circuit Court of Appeals. Oral arguments in that case are scheduled for next month. A separate challenge of the proposed Otter Creek mine also remains pending in state District Court.

"We were hoping maybe if the Surface Transportation Board did their job, they would go ahead and re-open it," Mark Fix said. "We're going to have to pursue those other avenues."