Energy

Environmentalist Claims Victory After Coal Producer Nixes Plans To Build In MT

(REUTERS/Jim Urquhart/File)

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Chris White Tech Reporter

Arch Coal, one of the largest coal producers in the U.S., pulled its plans to construct a massive coal mine in Montana Thursday, a result of sinking coal markets and increased pressure from local fossil fuel activists.

The St. Louis-based company made the announcement it was abandoning plans of Otter Creek Mine amid a U.S. Energy Information Administration (EIA) report showing coal spiraling into near irrelevancy. The report indicated the coal industry should expect a 29 percent decrease in the first 3 months of 2016, as compared to the same point in 2015.

“That process has taken longer than anticipated, and further deterioration in coal markets has led to the decision to suspend the permitting effort,” company officials said Thursday, adding that blame for the breakdown rests on “capital constraints, near-term weakness in coal markets and an extended and uncertain permitting outlook.”

Otter Creek is located in the Powder River Basin, home to several of the most productive coal mines in the country — nearly half (40 percent) of the coal-powered electricity generated in the U.S. comes from the basin.

While many locals supported Arch Coal’s proposal, others, including environmentalists and ranchers, were incensed by the arrival of another mine in the area.

“The writing was on the wall,” Dawson Dunning, a local whose family has ranched in the Otto Creek for years, said in a press statement from a anti-fossil fuel group Power Past Coal.

Dunning added: “It was only a matter of time before this project collapsed. All of us in Montana are fortunate that it collapsed before this gigantic mine opened up and a productive ranching valley was destroyed.”

Bill McKibben, the founder of anti-fossil groups Divest and Invest and 350.org, took to his Twitter feed Friday to champion Arch Coal’s decision to pull out of Montana.

Arch Coal faced headwinds on the project in March 2015, when regulators requested the company make alterations to its application permits for the mine. Undaunted, the company planned to resubmit the permit.

The Otter Creek mine is believed to have a treasure trove of recoverable coal, with some estimates showing Arch Coal could have secured nearly 1.4 billion tons of coal from the mine.

But as the coal market continued to fade into 2016, Arch Coal was forced to give up the ghost on the project.

“That process has taken longer than anticipated, and further deterioration in coal markets has led to the decision to suspend the permitting effort,” the company said. Arch Coal was forced to file Chapter 11 bankruptcy in January, claiming glutted markets, overarching regulations, and natural gas has hurt the company’s bottom line.

“After carefully evaluating our options, we determined that implementing the e agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet,” Chairman and Chief Executive John W. Eaves said in a Monday statement.

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