One of the newest coal companies to operate in Wyoming reached an agreement with the state Thursday to waive its sovereign immunity.
The waiver allows state regulators to enforce environmental and mining laws at Navajo Transitional Energy Company’s two coal mines in Wyoming. The contract also moves the Navajo Nation-based company one step closer to becoming the official owner and operator of the pair of mines, some of the largest in the nation.
Because NTEC was originally created under Navajo law, the firm operates as a tribal entity with the right to exercise sovereign immunity. By waiving this privilege in its agreement with Wyoming, the company effectively agreed to be held accountable for state mining and environmental laws. But the waiver does not apply to third-party citizen suits.
“This agreement ensures that Wyoming retains the right and ability to enforce state laws, including administrative procedures and collection of fines,” said Bernard Masters, general counsel for NTEC. “The agreement also respects NTEC’s status as a wholly owned entity of the sovereign Navajo Nation.”
In a letter addressed to the company’s CEO Thursday, Gov. Mark Gordon said after a review of the limited waiver by Wyoming’s attorney general, he was “satisfied” with the agreement. The governor also officially welcomed the coal operator to Wyoming.
“Thank you and all those who helped prepare this Limited Waiver, which demonstrates NTEC’s serious and long-term commitment to the State of Wyoming,” Gordon stated in the letter.
NTEC purchased the mines in October from Cloud Peak Energy, after the Wyoming-based coal operator went bankrupt. NTEC currently operates Antelope, Cordero Rojo and Spring Creek mines as a contract miner.
But NTEC has yet to secure the mining permits from the previous owner. The agreement established this week with the state of Wyoming allows NTEC to commence the application process for these permits.
Yet, the waiver remains limited in its scope, according to some attorneys.
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Joshua Macey, a professor at Cornell Law School and expert in bankruptcy, emphasized the limitations the waiver could pose to Wyoming residents. Though the waiver allows for certain objections to be brought forth by individuals who are covered by Wyoming’s Environmental Quality Act, it still “dramatically curtails citizen enforcement,” Macey wrote in an email.
“Because the Environmental Protection Agency and Department of Interior were not at the table, citizens can’t enforce the most significant environmental laws,” he added in the email. “The waiver encompasses citizen suits only brought under state environmental law, not federal environmental laws.”
The waiver does not allow regulators to enforce several federal environmental laws, Shannon Anderson, an attorney with Powder River Basin Resource Council, a landowners group, confirmed.
NTEC has repeatedly asserted it remains committed to upholding all state and federal laws. A spokeswoman for the company also told the Star-Tribune employees working in the mines have recourse under the agreement.
“We take our responsibilities to the communities where we work very seriously and are committed to be a good neighbor and steward of the land,” said Clark Moseley, NTEC’s CEO, in a statement.
NTEC’s Powder River Basin coal mines produced 11.6 million tons of coal in last year’s fourth quarter.
In addition to the Wyoming mines, the company also purchased the Spring Creek mine in Montana. The majority of employees at the facility live in Sheridan County, Wyoming.
But negotiations with Montana Department of Environmental Quality over the company’s sovereign immunity status continue to weigh on NTEC.
A dispute over the company’s sovereign immunity brought the Spring Creek mine to a standstill the day after the sale closed in October. Though the mine has since resumed full operations, NTEC has yet to secure a long-term agreement with Montana regulators.The temporary agreement allowing NTEC to operate as a contract miner in the state is set to expire in March.A wave of coal company bankruptcies has dragged Wyoming through years of economic turbulence. Half a dozen coal bankruptcies have shaken the state since 2015.
Follow the latest on Wyoming’s energy industry at @camillereports