Rancher Terry Punt sat at the kitchen table talking about the ranch his wife’s family has been operating for the past 140 years. He talked about how they had carved out a living over many generations through hard work and ingenuity. They currently run a Hereford/ Angus cross commercial cow-calf herd and also, a birth to consumer grass-finished Wagyu beef business. Though the cattle industry has always been challenging due to fluctuating prices, weather, fire, and other variables more recently the threats from coal, and oil and gas development have added extra stress on the region.

“This area has always been challenged in its relationship with the energy industry,” Terry said, adding that the Tongue River Valley has been “kind of a hotbed for controversy and oil and gas and coal development. It’s shaped more than just the landscape of the region, but also the attitudes of the residents. The energy industry has caused a lot of conflict in this community.”

Terry explained that in the 1970s, the federal government leased a lot of the area for coal development.  Other mines across the country were closer to transportation, which made them better suited for development. Some ranchers near Birney and the surrounding counties saw this predicament as a huge opportunity to lease out their land to the energy industry with the knowledge and assurance that other mines and leases were better suited to produce. Some, also, supported building the Tongue River Railroad to get the coal to market and gain the royalties along with the lease payments.

“People leased their land for 25-year leases and got the payments from the leases and nothing ever happened. This was a real boom to a lot of ranchers and kept them in operation with this extra income from leases from companies that were leasing their private minerals and then never developing them so they saw no impacts either,” Terry said. 

“The main reason there wasn’t any coal development was the fierce opposition to building the railroad by many landowners who would be condemned by the TRR. Northern Plains Resource Council led a coalition of ranchers, tribal members, and other concerned citizens in an on-going 38-year battle to stop the railroad.” The Northern Plains Resource Council is a grassroots conservation and family agricultural group that organizes Montanan to protect water quality, family farms and ranches and unique quality of life.

 Then in the late 1990’s a coalbed methane boom came into this area and people were not really ready for it,” Terry said. “People in agriculture, who did own their mineral rights and had benefited from the stability of the land -lease checks without the repercussions of development, had a rude awakening when the coalbed methane boom happened.”

One of the underlying issues had to do with split estates, wherein one party owns the surface rights and another party owns the mineral rights.  When two parties have very different interests in the same piece of land that undoubtedly impacts one another, it’s easy for conflict to arise. Many homesteaders did not have mineral rights, the federal government did. 

“A lot of these homesteads were homesteaded after the government already claimed mineral rights beneath the surface. So, when these places were homesteaded, homesteaders didn’t get the oil and gas rights or the coal rights under the ground. The federal government still reserves those rights in most cases” Terry said. 

The influx of interest in the area created a panic throughout the county. Terry remembered calling the Miles City Field Office of the Bureau of Land Management to find out who had leased the oil and gas rights from the federal government under them. 

“We found out that everything under us was leased, and that pretty much happened in the whole area around here,” Terry said. 

Nearby, in Wyoming, 26,000 wells were put in over 10 years. 

“Luckily, Northern Plains was at our back and we were able to get a moratorium on development of these leases in Montana until environmental impact studies were developed to address the coalbed methane development that was happening,” Terry said.

Terry and his fellow ranchers feared for the land. The repercussions of coalbed methane development at that scale were not known. The former resource management plan that the Bureau of Land Management completed for the area did not even talk about coalbed methane as a possibility and yet 10,000 new wells were expected to be drilled. 

Northern Plains Resource Council led the charge to get an environmental impact study of coalbed methane done which slowed down development in the area. At the same time, across the border in Wyoming, coalbed methane extraction was in full force. Essentially, the process started by drilling a water well into a shallow coal seam aquifer, usually under a thousand feet in depth and pumping out the salty groundwater—mixed with the groundwater was valuable methane gas. Drillers would bring that mixture up through the wellbore and then they would separate it on the surface. The water—often saltier than the ocean and full of industrial chemicals—was then discharged into streams and impoundments, or large evaporation ponds, on the surface. That pumped groundwater would then run off and into nearby pastures and waterways. The process of this new development scared ranchers. The sodium-bicarbonate is a salt derivative, and when it hits the soil it turns it as solid as concrete, preventing water penetration in the root zone. Many farmers and ranchers irrigated from the rivers that the pollution was running into or being pumped into. 

“Water is such a huge part of ranching,” Terry said. “The people that irrigated with the water were very concerned that this polluted water was getting in their irrigation water.”

The groundwater is very high in salts, so when that water is put in fields, the salt will build up in the soils. After an extended period of time, any irrigated land with a lot of salts in the water is going to become infertile. The salt will eventually kill plants by hardening the surface of the soil and not allowing the water to penetrate into the root zone of the plants.

There was a big push back with what to do with this briny groundwater. The water couldn’t be used on the land and there was too much of it to give to livestock. Eventually, the companies came up with a plan to call the water not surface water or groundwater but “produced water.” 

They claimed that the water in their pipeline belonged to them because it wasn’t surface water, it wasn’t groundwater either, it was in their pipeline and they were calling it “produced water.” “That really got some of us concerned because they were planning on selling and marketing that water,” Terry said. The produced water is also not suitable for irrigation. 

Terry and the other ranchers in the area feared that under this new setup, the companies could extract as much water as they wanted and sell to water-hungry locations, depleting their resources. 

“We were appalled by that because there’s no requirement saying that you have to have so much gas before you can have an oil and gas well, so if they drilled a well and gas played out, they could still keep pumping the water as an oil and gas well and marketing the water until the water was all gone,” said Terry. 

The waterways and the aquifers are the reason agriculture and life in the area is sustainable.  

“Our operation was subject to losing its groundwater and a lot of wells have gone dry in the area where they had coal bed methane development,” Terry said. 

In 2002, Northern Plains Resource Council and an irrigation company filed a lawsuit against one of the companies selling off the water. Northern Plains won the suit in district court. In 2010, Northern Plains won and the company could no longer market groundwater out of state.

“The companies were no longer allowed to call it produced water, it had to be called groundwater, which it was, and then it had to be subject to other people’s groundwater rights that they had in the area, and they couldn’t just withdraw it and sell it,” Terry said. 

Although that suit stopped the companies from selling the water off, it didn’t stop them from inappropriately disposing of the produced water. However, another successful lawsuit found that evaporation pits are not a beneficial use of water and therefore unconstitutional. 

Although the lawsuit slowed the companies down from selling the water it did not stop them from improperly storing it in impoundments and in surface water tributaries. 

The legislation that passed due to the groundwater depletion from coal bed methane extraction funded well monitoring and groundwater monitoring programs in the area through the Montana Bureau of Mines and Geology. 

The Bureau of Mines and Geology came into this area and contacted landowners to sample everyone’s springs and wells that were willing to participate. They put the data in a big database and then continually monitor to see the effects on people’s wells and what has happened to the groundwater. 

Terry said he saw this as a way to hold the industry accountable for its actions. There weren’t any repercussions from all of this pollution and groundwater depletion. Most of the companies went bankrupt when the gas prices dropped around 2008. There is no way to replace the clean groundwater that was lost. The premise was that companies would find replacement water for impacted water users but the companies didn’t have water rights to do this in the first place and left once the boom was over. 

Terry and his wife Jeanie have two boys they’re raising on the ranch. Their children are the sixth generation of ranchers on the land. Terry and Jeanie are working to protect the land from irresponsible energy development to ensure that they will have a chance to ranch.