The Circle West coal tracts in McCone County, Montana, contain about 460 million tons of recoverable coal reserves. Estimates of coal reserves for the tract are based predominantly on the S coal bed, which averages about 16 ft in thickness. About 175 million tons, or 38%, of the recoverable coal is Federally owned and has been identified for potential lease sale. A hydrologic study has been conducted in the potential lease area to describe existing hydrologic systems and to assess potential effects of surface coal mining on local water resources. Geohydrologic data collected from wells and drill holes indicate that shallow aquifers exist in sandstone and coal beds of the Tongue River Member of the Fort Union Formation (Paleocene age). These shallow aquifers generally have small values of hydraulic conductivity (0.1 to 380 ft/day) and typically yield from 2 to 20 gal/min to stock and domestic wells. Where coal is extremely fractured or the thickness of saturated sandstone is large, some wells can yield in excess of 70 gal/min. Chemical analyses indicate that most shallow aquifers contain a sodium sulfate bicarbonate type water. Surface water resources of the area consist of intermittent streamflow in parts of the Nelson and Timber Creek basins plus a large network of reservoirs. The reservoirs provide a large part of the water supply for area livestock and irrigation. Water quality data for Nelson and Timber Creeks indicate that the water generally is a sodium sulfate type and has a large concentration (181 to 6,960 mg/L) of dissolved solids. Mining of the S coal bed in the Circle West coal tracts would permanently remove shallow coal and sandstone aquifers, resulting in the loss of shallow stock wells. Mining would destroy livestock reservoirs, alter runoff characteristics of Nelson Creek, and temporarily lower water levels in shallow aquifers near the mine. Leaching of soluble constituents from mine spoils may cause a long-term degradation of the quality of water in shallow aquifers in and near the coal tracts. Some of the effects on local water supplies could be mitigated by development of alternative water resources in deeper aquifers such as the Tullock aquifer of Paleocene age and the Fox Hills-lower Hell Creek aquifer of Late Cretaceous age. (Author 's abstract)