Tongue River (Montana) - Coal Deposits and Coal Mines

Coal Deposits and Coal Mines

Historically, underground coal mines existed along the Tongue River at the communities of Monarch, Kleenburn and Acme, about 7 to 10 miles north of Sheridan, Wyoming. These mines were based on seams of coal that outcropped in this area, in the Tongue River valley or on small tributaries off the valley. The CB&Q railroad ran from Sheridan, Wyoming past these mines and on to Billings, Montana, allowing for easy shipment of coal. These underground mines were economically operated from about 1900 to the late 1940s. Miners lived in these communities or in Sheridan, Wyoming. Miners in Sheridan commuted the 7 to 10 miles to reach the mines by trolly.

The same coal seams that used to be mined by underground tunnels are now accessed for mining by large open surface excavations. Several large coal strip mines are presently operating in the area around the Tongue River Reservoir, near the small town of Decker, Montana about 20 to 23 miles northeast from Sheridan, Wyoming. These mines are operated by the Kiewit Corporation and produce subbituminous low sulfur Powder River basin coal. There are no electrical generating facilities at this site. A rail spur line extends to the mine sites from the BNSF main line near Sheridan, Wyoming allows this coal to be shipped by rail to coal-fired electric generating plants all over the United States.

Large undeveloped private and federally owned coal deposits are located along Otter Creek, a tributary of the Tongue River. These coal deposits are located south of Ashland, which is at the junction of the Tongue River and Otter Creek. These coal deposits are sufficiently thick, and are located under sufficiently thin overburden, as to be economically viable. Drawbacks for production are the lack of a rail spur to transport the coal, and the lack of an established community of sufficient size in the area to support the work force needed to develop the coal mines. A railroad spur line, if built, would have to come up the Tongue River from Miles City, a distance of some 65 to 70 miles. Extensive infrastructure improvements would have to be added to the community of Ashland before it could support the number of worker's families that the mine would draw to the area. These deposits on Otter Creek are the source of much debate over the future of energy development in southeastern Montana.

Undeveloped but extensive coal deposits exist along Youngs Creek and adjacent creeks, which flow into the Tongue River just upstream from the Tongue River Reservoir. This large and (as yet) untapped deposit of coal is just a few miles south of the large open pit coal mines already being operated by Kiewit. The upper 15 miles of Youngs Creek lies on the Crow Indian Reservation in Montana, and the Crow Tribe owns the coal beds underlying this portion of the creek. The last 3 miles of the creek lie between the reservation boundary and the Tongue River, in Wyoming. As to the coal beds on the Crow reservation, the Secretary of the Interior approved a coal lease negotiated by the Crow Tribe with Shell Oil Company in 1983 to develop this coal resource. The lease had extensive long term benefits for the Crow tribe, and required payments to the tribe to start at a future point of time even in the event the coal was not mined. Shell paid the tribe a bonus to cancel this lease in 1985, because of poor market conditions, and because of Shell's uncertainties on how Montana's severance tax would be applied to coal owned by the Crow Tribe. Compared to Otter Creek these coal resources are easier to develop—the coal resources of Young's creek lies within five to ten miles of the railroad spur line which is used to ship coal from the nearby open pit mines being operated by Kiewit in the Decker, Montana area, and the communities of Sheridan and Ranchester already exist to serve as a base for the work force needed to develop coal mines at Youngs Creek.