Otter Creek deal makes sense

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The State Land Board finally approved a deal for mining the state-owned Otter Creek coal tracts in southeast Montana. It’s a move that could curb planned budget cuts and possibly restore two suspended stimulus projects in Flathead County.

The state acquired the tracts nearly 10 years ago during former Gov. Judy Martz’s administration, but land boards have been mulling whether to actually mine coal from the tracts ever since. It should not have been a painful decision because of the constitutional mandate to maximize revenues from school trust lands.

Still, the board only narrowly approved the deal with Arch Coal Inc. to mine a half billion tons of coal from the tracts at an upfront cost of $86 million. Gov. Brian Schweitzer led the 3-2 majority, pointing out that Arch Coal will proceed with mining 731 million tons of coal from private lands in the same area, regardless of the state’s actions.

He also pointed out the reality that the state is faced with financial challenges in the years ahead and that coal revenues can provide immediate relief as well as long-term benefits in education funding.

“This is the largest financial transaction in the history of the state of Montana,” Schweitzer proclaimed after Thursday’s meeting, referring to the price being paid by Arch for the rights to the Otter Creek tracts.

Five protesters were at the meeting, representing the environmental opposition that has played a big part in delaying the decision over the years. They can claim that coal mining on state lands will add to global warming all they want, but they can’t prove it, and they can’t stop other coal mining operations around the globe or even on lands next door to the Otter Creek tracts. There is no reason why the state of Montana should be precluded from tapping a valuable resource that will benefit schools.

Oddly enough, Schools Superintendent Denise Juneau voted against the deal, even after hearing testimony from rural school districts and other supporters.  Fellow Democrat and Attorney General Steve Bullock also voted no.

Schweitzer, State Auditor Monica Lindeen and Secretary of State Linda McCulloch should be commended for finally taking action. Their decision could free up about $3 million in federal stimulus funds that were frozen because of the state’s fiscal outlook. Some of that money was being pursued by Flathead County for a project on Mennonite Church Road, and some by the city of Columbia Falls for a project on Third Avenue East.

It’s to be expected that development of the Otter Creek tracts and an associated railroad will continue to be resisted by environmental groups. Montana’s political leaders should go to the mat to see to it that the state receives the expected billions in taxes and royalties on Otter Creek coal over the coming decades.

 

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