Montana, coal railroad reach $2M easement deal

MATTHEW BROWN, Associated Press

BILLINGS, Mont. -- A long-stalled coal railroad in southeastern Montana could get an easement through the state's Miles City fish hatchery in exchange for a $2 million payment into a conservation fund and a $25 million insurance policy, under the terms of a tentative deal disclosed Wednesday.

The proposal to grant the easement to the 80-mile Tongue River Railroad still must be approved by Montana Fish Wildlife and Parks commissioners.

Notice of a decision was put on the commission's Thursday agenda, but the matter was pulled late Wednesday and delayed until an unspecified date.

The railroad company is jointly owned by Arch Coal Inc., BNSF Railway and billionaire candy magnate Forrest Mars, Jr. It is fiercely opposed by conservation groups and landowners wary of new mining in southeastern Montana's huge coal fields.

The hatchery easement, one of nine needed by the railroad from the state, is considered key for a project on the drawing boards since the early 1980s.

The railroad received final approval from the U.S. Surface Transportation Board in 2007 following years of litigation. But it must now seek new approval from the agency after the line was shortened when it was bought by Arch, BNSF and Mars.

The easement deal was agreed to by the railway last week after more than two years of negotiations. It says the railroad will pay $2 million into a trust fund "for the protection, preservation, management and propagation of game and non-game fishery and wildlife resources."

Fish, Wildlife and Parks spokesman Tom Palmer said Wednesday that the easement would be in the best interests of Montana, the hatchery and anglers.

"We've been talking about this for more than 30 years and in recent years we've been working on an agreement the Fish, Wildlife and Parks Commission can accept," Palmer said.

But Fish, Wildlife and Parks commissioners have said they were uncomfortable with past deals to let the railroad pass through the hatchery, where endangered pallid sturgeon are raised. The agency's lawyers have said that if the state doesn't strike a deal, the railroad could take the property through eminent domain.

Mike Scott with the Sierra Club said Wednesday it was premature for the Fish, Wildlife and Parks commission to consider the easement agreement when federal approval is still pending.

The announcement in June that the Surface Transportation Board wanted a new application for the coal-carrying line marked a significant setback for the project. The board said it would conduct another environmental study of the line proposed between Miles City and Ashland.

"Let's do an environmental impact statement that's valid and see them get permitted again before we even start talking about giving away land to them," Scott said.

Commission chairman Bob Ream said he was unprepared to comment Wednesday.

An Arch Coal representative referred questions to BNSF, where a spokeswoman did not immediately return a call from The Associated Press seeking comment.

Mars is a former opponent whose Montana ranchland was in the path of the line until he bought a one-third interest in the railroad. The line has since been shortened from 130 miles to 80 miles.