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A Wyoming company can explore oil and gas drilling in a Montana coal mine’s footprint, feds say

January 10, 2018 GMT

Move over, coal. The federal government will allow a Wyoming company to explore oil and gas drilling within the footprint of Montana’s Spring Creek coal mine.

Cheyenne-based Hoover & Stacy Inc. was awarded leases inside the permit boundary of Spring Creek in December. The leases come at the protest of mine owner Cloud Peak Energy, which had tried unsuccessfully to stop the leases near Decker from going up for bid.

Hoover & Stacy holds three leases totaling 909 acres within the mine area. The company paid $23,000 for the right to develop the mine area parcels, which were part of 37 leases it secured Dec. 12.

Cloud Peak objected, citing surface development conflicts.

“Our concern is to ensure coal leases are placed under consideration when nominating oil and gas leases within an existing mine permit and in front of mining development,” said Rick Curtzinger, Cloud Peak spokesman. “Our concerns were received by BLM after the public comment period closed. Our operations continue to work with oil and gas companies to develop all minerals and to benefit all parties.”

It isn’t often the federal government attempts to develop coal, oil and gas on the same land, but that horizontal drilling makes the development possible, said Al Nash of the Bureau of Land Management.

“There was a time and place where there would have been a vertical drilling rig and there would have been conflict, but not anymore,” Nash said.

The surface mine digs down a few hundred feet typically. Oil and gas will likely be developed a mile or more below the surface. The two projects shouldn’t interact.

The lease sale Dec. 12 involved 99,265 Montana acres and raised $37,773 in advanced rental income and $620,327 in bonus income. The average lease price per acre was $24.65.