The Powder River Basin stretches from northeastern Wyoming into southeastern Montana. The oil and gas industry is rapidly developing this area, particularly for coalbed methane (CBM) extraction. In 2000, the U.S. Army Corps of Engineers issued a permit for the construction of reservoirs to dispose of wastewater generated from producing CBM. Under the permit, wetland destruction is allowed.
The wastewater produced during CBM extraction contains pollutants that are harmful to clay soils, native grasses and fish and wildlife and their natural habitats. Once discharged into the Corps-permitted reservoirs, CBM wastewater flows downstream and harms the area's streams and water used by landowners used for crops and livestock.
The Army Corps issued its permit without considering its harmful impacts to the Powder River Basin ecosystem. As a result, Earthjustice challenged the permit on behalf of Wyoming Outdoor Council, Powder River Basin Resource Council, and Biodiversity Conservation Alliance, and won. In a January 2005 federal court ruling, Judge Downes determined that the permit is illegal and must be reviewed.