The state of Montana participated in additional reporting. As part of the USEITI process, the Independent Administrator gathered information about state and local natural resource governance, revenues, and disbursements in Montana.
The state of Montana regulates extraction and interacts with extractive industry companies in Montana, particularly when they’re operating on state or private land.
The Montana Department of Revenue collects, manages, and distributes revenue from companies engaged in extraction of oil, natural gas, coal, and non-energy minerals in Montana. It publishes biennial reports and other tax related reports. County governments also collect many property taxes.
The Montana Department of Natural Resources and Conservation manages Montana’s natural resources, including administering state trust lands and distributing revenue from state trust lands.
The Montana Department of Environmental Quality leads Montana’s planning, permitting, compliance, enforcement, and remediation efforts for projects and incidents related to air, water, land, and energy.
- The Air, Energy, and Mining Division is charged with protecting the quality of Montana’s air, water, and land. Its responsibilities and roles include:
- Issuing air quality permits for oil and gas wells
- Issuing permits and monitoring compliance for projects relating to coal and hardrock mines
- Determining correct control measures and establishing requirements to ensure compliance with laws and regulations
- Providing technical assistance in bringing violations back into compliance
- Preparing enforcement requests for the Enforcement Division
- Holding and reviewing reclamation bonds for coal and hardrock mining
- The Waste Management and Remediation Division administers and oversees investigation and cleanup of extraction sites that need remediation, including state and federal superfund sites and Montana’s abandoned mine land projects.
State laws and regulations
The Constitution of the State of Montana includes environmental protections, including a right to a “clean and healthful environment,” and provisions for environmental protection, improvement, and reclamation.
The Montana Code Annotated (MCA) has several sections that govern natural resource extraction:
- Title 82: Minerals, Oil, and Gas includes statutes related to minerals, oil, and gas.
- Title 15: Taxation covers taxation. See chapters 35 (Coal Severance), 36 (Oil & Gas Production Tax), 37 (Mining License Taxes), and 38 (RIGWAT Tax).
- Title 77: State Lands covers state lands. See Chapter 3 (Rock, Mineral, Coal, Oil, and Gas Resources).
- The Montana Environmental Policy Act (MCA §75-1-101, et seq.) aims to ensure environmental impacts are considered in state planning (including environmental impact statements).
- The Clean Air Act of Montana (MCA § 75-2-101, et seq.) seeks to “achieve and maintain levels of air quality that will protect human health and safety and, to the greatest degree possible, prevent injury to plant and animal life.”
- The Water Quality Act (MCA §75-5-101, et seq.) aims to “conserve water by protecting, maintaining, and improving the quality of water” throughout the state and to “provide a comprehensive program for the prevention, abatement, and control of water pollution.”
- The Montana Metal Mine Reclamation Act (MCA §82-4-301, et seq.) provides for reclamation of hard rock and metal mines.
The Administrative Rules of Montana also regulate natural resource extraction:
- Title 36: Natural Resources and Conservation covers the Department of Natural Resources & Conservation. See chapters 19 (Reclamation and Development Grants Program), 22 (Board of Oil & Gas Conservation), and 25 (State Land Leasing).
- Title 17 Environmental Quality covers the Department of Environmental Quality. See chapters 8 (Air Quality), 24 (Reclamation), and 30 (Water Quality).
In addition to generating revenue and economic activity, extractive industries can bring costs to state and local communities. In Montana, these costs are concentrated in eastern Montana because of extraction from the Bakken Formation in Montana and neighboring North Dakota. For more extractive industries’ effect on this region, see the Eastern Montana Impact Coalition’s Regional Impact Analysis (PDF).
The USEITI Multi-Stakeholder Group prioritized four types of fiscal costs:
The Montana Department of Transportation estimates an additional $52 million per year in increased pavement needs for highways in eastern Montana because of extractive industry activity. Local governments in eastern Montana also saw increases in budgets for streets and roads increase 44% to 345% from 2000 to 2013.
To read more, see the Montana Department of Transportation report (PDF) on efforts to respond to impacts on the state highway system from oil exploration and production in eastern Montana.
Surveyed communities in eastern Montana reported that water rates increased an average of 86.4% from 2011 to 2014 and sewage rates increased 302.9%. The Eastern Montana Impact Coalition also estimates that $33.8 million to $80.6 million will be needed for incremental improvements to support growing demand on water, sewage, and transportation systems. These figures don’t include large projects.
The Department of Environmental Quality plans, monitors, assesses, and enforces water quality in Montana. It performs targeted water quality monitoring related to oil and gas development in eastern Montana and coal mining near Lake Koocanusa, runs the Montana Ground Water Pollution Control System and its permitting process, and produces Clean Water Act Integrated Reports.
Increased population near extraction can increase demands on emergency services. Law enforcement at multiple jurisdictional levels in eastern Montana have seen costs rise related to increases in oil and gas activity.
The State Highway Patrol added a new detachment in eastern Montana, county sheriffs’ offices have seen costs rise $13.4 million, and surveyed police departments have seen an average budget increase of 128.9% between 2000 and 2013. Surveyed local governments also reported an average increase of 169.2% in emergency spending from 2000 to 2013.
Montana has been “certified” by the federal Abandoned Mine Land Reclamation program, meaning that it has reclaimed its identified high-priority abandoned coal mine areas. Current projects include addressing acid mine drainage in the Great Falls coal field, which is projected to cost $96 million, and managing subsidence events and potential subsidence in Red Lodge.
To learn more, find Annual Evaluation Reports for Montana in the Office of Surface Mining Reclamation and Enforcement Oversight Document Database or learn about the bonding of active mines in the Coal Program Annual Report.
The Conservation and Resource Development Division of the Department of Natural Resources and Conservation runs the Reclamation and Development Grants Program to fund projects that “compensate Montana citizens for the effects of exploration and mining on Montana lands.”
The Montana Department of Justice Natural Resources Damage Program administers grants for the restoration of the Upper Clark Fork River Basin’s natural resources “due to mining and mineral processing operations.” Between 2000 and 2011, the governor approved 121 projects totaling $121 million.