Court won't expand Powder River Basin injunction

SAN FRANCISCO (Reuters) - A U.S. federal appeals court upheld an injunction on Tuesday against development of coal bed methane development on 93 percent of the coal-rich Powder River Basin in Montana and Wyoming.

Yet, a three-judge panel of the 9th U.S. Circuit Court of Appeals rejected a request to expand that injunction to block development on all of the 14-million-acre (5.7-million-hectare) region pending further environmental reviews.

The area of ranches and mines is home to America's largest coal deposits, and has been subject to environmental controversy after the federal government starting selling leases to develop energy resources there a decade ago.

Coal bed methane is obtained by taking groundwater out of land and into rivers; when put under pressure, the methane then percolates and is piped to the surface.

The split 2-1 decision of the 9th Circuit cited potential environmental issues of aesthetic harm, pollution of rivers from the pumped groundwater, and lowering of the water table, impacting farmers and ranchers.

The decision upheld a lower court injunction allowing development on 7 percent of the area but blocking development on 93 percent of the area pending a revised environmental impact study.

"We cannot...fault the district court's exercise of its discretion to issue a partial injunction balancing the equities rather than an automatic full injunction," Judge Andrew Kleinfeld wrote for the majority.