State Land Board says "yes" to vast Otter Creek coal development

2009-12-22T03:30:00Z State Land Board says "yes" to vast Otter Creek coal developmentBy MIKE DENNISON Missoulian State Bureau
December 22, 2009 3:30 am  • 

HELENA - The state Land Board Monday voted 4-1 to lease 572 million tons of state-owned coal in southeastern Montana's Otter Creek Valley - but set a relatively high minimum price to buy the rights to develop the tracts.

The decision, which came after months and years of study, appraisals and political lobbying by all sides of the contentious issue, could be the first step toward developing a massive coal mine in the rural valley about 150 miles east of Billings.

Yet developers have said any mine won't happen until five to 10 years in the future, and Land Board member Linda McCulloch noted that the board retains the authority to approve mining and reclamation plans on the land.

McCulloch, Montana's secretary of state, made the motion to approve the lease, but set the minimum upfront "bonus bid" at 25 cents per ton. That amount is two-and-a-half times what Arch Coal Inc. agreed last month to pay for the right to develop 730 million tons of privately owned coal interspersed with the state tracts.

"The only thing in common between the supporters and opponents of developing Otter Creek is that the state of Montana should not give this up for cheap," she said. "No sweetheart deal will be made."

Monday's action gives coal companies until Feb. 8 to submit bids. The board expects to examine those bids at its Feb. 16 meeting.

The board is composed of the state's top five elected officials. McCulloch, Gov. Brian Schweitzer, Attorney General Steve Bullock and state Auditor Monica Lindeen voted in favor of leasing the coal.

State Superintendent of Public Instruction Denise Juneau voted against it, saying there's more value in preserving the land for future use than in developing a coal mine.

"We could sell every parcel of state land and log every tree on state lands, but we don't," she said. "We don't because we want to sustain Montana's lands for future beneficial use. ... Of course there is value in mining the coal. But there is also value in keeping Montana ‘Montana.' "


The board approved the lease over the objections of environmental groups and some area landowners. Many of them attended the board meeting in Helena, giving impassioned speeches about how mining coal would harm the valley and adjoining river basins and hasten global warming, if the coal is burned to produce electric power.

Among the opponents were several Missoula Big Sky High School students, who traveled to Helena with Spanish teacher Jay Bostrom.

Bostrom said the lease has been advertised as a way to help school funding, but that he didn't want the money: "Don't do it to fund my computer, or my salary. ... I'll take a pay cut. As a teacher, I'm not interested in getting money from coal at all."

"This will create an unlivable future for short-term gain," added student Kaelin Curry.

Money from the bonus bid would go directly to public schools, but would not increase overall state funding - unless the Legislature authorizes the increase.

McCulloch, a former teacher and state superintendent of schools, included in her motion a directive from the board that the minimum bonus bid of $140 million would be used to increase state funding for schools.

She acknowledged later that the directive is not binding on the Legislature, but called it "a very stern reminder" to lawmakers.

Any royalties from coal mining on state lands also goes into a state trust account whose interest helps fund schools. But, again, only the Legislature can decide whether any increased interest revenue would lead to higher overall state funding for public schools.

Supporters of leasing the coal argued that it would be an economic boost for eastern Montana and the entire state, providing jobs and increased tax revenue.

Cary Hegreberg, executive director of the Montana Contractors Association, said Montana has a good track record of responsibly developing natural resources, which provide good-paying jobs. The same people who oppose the lease have opposed virtually all natural resource development in the state, he said.

"It's time to say yes to responsible development in Montana," he said. "We urge you to approve these leases."

Attorney General Bullock tried to convince fellow board members to increase the minimum bid to 35 cents a ton, arguing that a railroad to the site would make the coal more valuable. But none of the other board members would second his motion.


Copyright 2015 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

No Comments Posted.

Missoulian Civil Dialogue Policy

Civil Dialogue Policy for Commenting on

We provide this community forum for readers to exchange ideas and opinions on the news of the day. Passionate views, pointed criticism and critical thinking are welcome. Comments can only be submitted by registered users. By posting comments on our site, you are agreeing to the following terms:

Commentary and photos submitted to the Missoulian ( may be published or distributed in print, electronically or other forms. Opinions expressed in's comments reflect the opinions of the author, and are not necessarily the opinions of the Missoulian or its parent company. See the Terms of Service and Privacy Policy for more information.

Our guidelines prohibit the solicitation of products or services, the impersonation of another site user, threatening or harassing postings and the use of vulgar, abusive, obscene or sexually oriented language, defamatory or illegal material. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual orientation, disability or other classification. It's fine to criticize ideas, but ad hominem attacks on other site users are prohibited. Users who violate those standards may lose their privileges on

You may not post copyrighted material from another publication. (Link to it instead, using a headline or very brief excerpt.)

No short policy such as this can spell out all possible instances of material or behavior that we might deem to be a violation of our publishing standards, and we reserve the right to remove any material posted to the site.

Add Comment
You must Login to comment.

Click here to get an account it's free and quick

The 4:06 – trending topics and hot headlines

Missoulian reporter Rob Chaney presents the latest news you need to know about today's headlines in about t…

The 4:06 – trending topics and hot headlines

The 4:06 – trending topics and hot headlines

Missoulian reporter Martin Kidston presents the latest news you need to know about today's h…

Vietnam, then and now: Chue Vang

Vietnam, then and now: Chue Vang

Chue Vang recounts his experiences as a young man in Laos and Vietnam. 

The 4:06 – trending topics and hot headlines

The 4:06 – trending topics and hot headlines

Missoulian reporter David Erickson presents the latest news you need to know about today's h…

Vietnam then and now: Ira Robison

Vietnam then and now: Ira Robison

Ira Robison describes his experiences as an anti-war advocate during the Vietnam War.

Vietnam Then and Now: Janet Zupan

Vietnam Then and Now: Janet Zupan

Janet Zupan, daughter of a man who was a POW during the Vietnam War, recounts her memories o…

Vietnam then and now: Karen Ryan

Vietnam then and now: Karen Ryan

Karen Ryan recounts her experiences in Operation Babylift.

The 4:06 – trending topics and hot headlines

The 4:06 – trending topics and hot headlines

Missoulian reporter Kate Haake presents the latest news you need to know about today's headl…


Search our events calendar