Montana Governor to Local Officials: Pledge Allegiance to Coal Money

No April Fools here: the Governor of Montana demands local officials express support, in writing, for a proposed coal mine in order to receive stimulus money for local projects.

“The potential revenue from the sale of Otter Creek coal might allow for your project/projects to be funded,” the Governor wrote in a letter (via Green Inc.) to local governments. “Please return a letter confirming that you ‘support the use of coal money for the completion of your project/projects.'”

Governor Brian Schweitzer said a one-time bonus payment of $85.8 million from the sale of coal reserves in the Otter Creek Valley would free up federal stimulus money which had been held back to cover a budget short-fall.

The mining rights were sold to Arch Coal, the country’s second largest coal company, after a 3-2 vote by the state Land Board on March 18th.


The letter, which Schweitzer signed in front of astonished state officials yesterday, prompted immediate fury from opponents of the Otter Creek mine.

Jim Jensen, head of the Montana Environmental Information Center, compared the Governor’s action to that of a third-world dictator. From the Missoula Missoulian:

“What the governor is doing with this strong-armed tactic, which is reminiscent of the typical Banana Republic dictator, is violating his constitutional duty to the (coal) trust,” Jensen said. “He has an absolute obligation and fidelity to the trust, and not to have what’s known as divided interest.”

Hiding fear with bravado?

The Governor’s seemingly outrageous demands may hide political anxiety. The extortion tactics appear to be a form of political insurance for Democrat Schweitzer, who heads a state that is known for its pristine natural beauty but is also eager for jobs and economic development.

Schweitzer said in addition to the $85.8 million one-time bonus payment, the mine would bring in approximately $5 billion in tax revenue and royalties over its lifespan, according to the Billings Gazette.

Arch Coal bid on the Otter Creek coal reserves only after Montana lowered its asking price from 25 cents a ton to 15 cents. Montana has the nation’s largest coal reserves, but it produces less coal than its neighbor, Wyoming, according to Green Inc.

Coal extraction has slowed recently as a result of environmental pressures and the economic slowdown.

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.

5 responses

  1. 1. Coal production in Montana is UP not down. Coal still needs to be in the energy mix, but in the long run will need to be handled in processed that reduce CO2 emissions (something both the Governor and the President are striving to achieve).
    2. Re: projects, Gov appears to be asking folks to acknowledge that the coal bonus payment was the reason that their project might be able to go ahead. He was not, as I read it, asking anyone to endorse the coal deal (just ackowledge that it had helped financially – an obvious FACT).
    3. Tough financial times ahead, so local govt folks should take advantage of the funds if they are freed up, as that is not likley to be happening again in the foreseeable future.

Leave a Reply