BILLINGS, Mont. — Department of Interior officials raised concerns Wednesday over a proposal to transfer 232 million tons of federal coal to a private company under an exchange touted as benefiting Montana’s Northern Cheyenne tribe.
Deputy Assistant Secretary Jodi Gillette said Houston-based Great Northern Properties would get almost twice as much coal as it is giving the tribe in the proposed deal.
The exchange previously had been described by Great Northern and others involved as roughly even. It is backed by leaders of the impoverished tribe and Montana’s congressional delegation, which has introduced separate House and Senate bills to enact the swap.
The tribe would receive 130 million tons of coal that Great Northern controls beneath the southeastern Montana reservation. It also would receive 40 percent of royalties on future sales of the coal acquired by Great Northern.
Backers of the deal are rushing to get a bill passed before some of the coal reserves involved are offered at a public auction planned for this summer or fall.
Montana Rep. Denny Rehberg warned Wednesday that opposition from Interior “could blow up the deal.”
A hearing on Rehberg’s bill to enact the exchange was held Wednesday before the House Subcommittee on Indian and Alaska Native Affairs. Gillette testified that the Department of Interior supports the goals of the legislation but was concerned about the value of the coal involved.
“We would like to work with the sponsor and the subcommittee to ensure that the exchanges of mineral interests are of equal value,” she said.
But Great Northern president Chuck Kerr said later that Interior was incorrectly basing its assessment of how much coal was involved on total tonnage — not the amount that could feasibly be recovered through mining.
“It comes down to the amount of coal you can actually sell,” Kerr said. “We need to come to a consensus on accurate numbers. We respectfully disagree with the Department of Interior.”
Mining company Signal Peak Energy plans to mine some of the federal coal near Roundup beginning in the next several years.
Great Northern acquired rights to the coal beneath the reservation from Burlington Northern Railroad in 1992. Tribal leaders say those rights should have been turned over to the Northern Cheyenne in 1900, when the reservation was expanded to include the land above the underground reserves but not the coal itself.
“The United States is now in a position to remedy that continuing federal omission,” Northern Cheyenne Vice President Joe Fox, Jr. said in remarks prepared for Wednesday’s hearing. “The Northern Cheyenne have waited many years for this opportunity.”
Legislation to return the coal beneath the reservation to tribal control was first promised a decade ago, after the tribe sued the federal government over another coal transfer just outside the reservation’s boundaries.
At the time, the state’s congressional delegation offered $70 million in coal development “impact fees” to the tribe. That provision was stripped from the pending legislation before it was introduced because of concerns the high price tag could derail the Great Northern exchange, tribal officials said.