Cloud Peak's deep pockets

The Bureau of Indian Affairs issued the green light for a massive coal lease and exploration agreement June 20 between Wyoming-based Cloud Peak Energy and Montana's Crow Tribe. Cloud Peak immediately paid the tribe $1.5 million, and has committed to funding $75,000 worth of college and vocational scholarships annually for the tribe. The agreements were signed back in January, and have been pending federal approval.

The tribe could make as much as $10 million from additional annual payments from Cloud Peak over the first five years of development, according to Cloud Peak spokesman Rick Curtsinger. Crow Tribal Chairman Darrin Old Coyote promptly thanked the BIA for its thumbs-up last week, saying in a statement that "the tribe's large coal resources offer significant potential for good-paying jobs and a diversified source of revenue for essential tribal government services." Old Coyote added that the Cloud Peak project is "a priority for the Crow Tribe's future."

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Cloud Peak is now poised to be an even bigger player in Montana coal production. The company's Spring Creek Mine, located just east of the Crow Reservation, yielded 17.2 million tons of coal last year. The terms of the new agreement will allow Cloud Peak to develop an additional 1.4 billion tons on the reservation. The company is already one of the largest coal producers in the nation, and has spent big on Montana politics.

Last year, Cloud Peak donated $10,000 to Denny Rehberg's unsuccessful Senate campaign. The company has held two meetings with Sen. Jon Tester since signing the deal this winter—one alongside representatives from the Crow Tribe and Westmoreland Coal Company. Cloud Peak also donated $6,000 to Rep. Steve Daines' congressional campaign, as well as $1,000 to his Democratic opponent Kim Gillan. Daines was the sole beneficiary of independent spending by Cloud Peak in the 2012 election cycle.

Cloud Peak's new lease could mean a major financial return for the Crow Tribe, but the company itself will miss out on a tax credit contained in this year's so-called "Fiscal Cliff" bill. A section of the American Taxpayer Relief Act, signed into law by President Barack Obama in January, extended a $2-per-ton tax credit for companies producing coal on American Indian lands. However, the coal tax credit only applies to coal facilities that, like Westmoreland's Absaloka Mine, have been operating since before 2009.

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