Reznet

Natural Resource Ruling

By Katie Oyan

HELENA, Mont. (AP)—A federal appeals court on Tuesday upheld a judge's ruling that allows limited coal-bed methane development in Montana's portion of the Powder River Basin.

The 2-1 decision by a panel of the 9th U.S. Circuit Court of Appeals affirmed an April 2005 ruling by U.S. Magistrate Judge Richard Anderson that allowed limited drilling on federal leases in southern Montana while the Bureau of Land Management expands an environmental impact report for the area.

The Northern Cheyenne tribe and the Northern Plains Resources Council had challenged the decision. The groups asked for and received an emergency order from the appeals court in June 2005 halting all drilling pending the outcome of their appeal.

On Tuesday, both sides said it was unclear when or if drilling would occur. The tribe and the Northern Plains Resources Council have the option of asking the entire 9th U.S. Circuit Court of Appeals to hear their appeal.

In its decision, the panel supported the lower court's decision.

"The district court did not abuse its discretion in issuing the partial injunction proposed by BLM because it provides an equitable resolution consistent with the purposes of (National Environmental Policy Act)," the panel wrote.

Anderson had ruled the BLM violated the National Environmental Policy Act when it drafted a study on the environmental effects of coal-bed methane mining in the Powder River Basin. He said the agency looked at several alternatives for large-scale exploration and development but failed to consider an alternative that would have phased in exploration and development more gradually.

Anderson ordered the BLM to prepare a supplemental environmental impact statement that included a "phased development" alternative.

His injunction banned coal-bed methane development on 93 percent of the 8 million-acre Powder River Basin resource area until the supplemental review was complete. He allowed "phased" coal-bed methane development on the rest of the resource area.

In their appeal, the tribe and the Northern Plains Resources Council argued the National Environmental Policy Act required no development proceed until a valid environmental impact statement was completed.

BLM spokesman Greg Albright said the agency was still reviewing the decision and had yet to determine what its effects would be, given other pending cases involving coal-bed methane development in the basin.

He said the BLM is still working on the supplemental environmental review, which should be completed this winter.

John Arum, an attorney for the Northern Cheyenne tribe, said he was disappointed with the decision but had yet to consult with the tribe on whether they would seek another hearing.

"The tribe will be evaluating its options to ensure that drilling does not occur until the supplemental environmental impact statement is completed," he said.

The Powder River Basin in Montana and Wyoming is the largest coal deposit in the United States and among the biggest in the world. Coal-bed methane is a natural gas generated by coal deposits and trapped in coal seams by groundwater. It is extracted by pumping the groundwater out of the land and into rivers. As the water is removed, the pressure on the gas is eased so the gas percolates and is piped to the source, where it can be recompressed for shipping.

Opponents argue that the process pollutes rivers and streams, causes aesthetic harm, and draws down aquifers and water wells.

In her dissent, Chief Judge Mary Schroeder noted the potential effects of limited drilling.

"The district court's order allows major new activity to be introduced into the area, potentially involving mining, road construction and water usage affecting precious underground aquifers, before NEPA has been satisfied," she wrote. "Allowing this activity to take place before completion of the (environmental impact statement) is contrary to the core purpose of NEPA, which is to ensure consideration of all alternatives before major government action is taken."

Katie Oyan is an Associated Press writer.