Coal producer agrees to $30M settlement
WASHINGTON (AP) - January 17, 2008 Under the agreement with the Environmental Protection Agency,
Massey Energy, headquartered in Richmond, Va., also will invest
millions of dollars for pollution control improvements at its 44
mines and coal facilities in the two states and in Virginia, the
EPA and Justice Department said Thursday.
The EPA estimates the improvements required by the settlement
will cost Massey as much as $10 million, although the company said
the cost is expected to be less. "That's their estimate," said
Shane Harvey, Massey's assistant general counsel. "We do not have
a firm estimate at this time. My guess is it would be below $10
million."
The agreement settled a complaint filed by the EPA in May 2007
alleging that the company violated the federal Clean Water Act on
at least 4,500 occasions between January 2000 and the end of 2006
by discharging mining waste and sediment - including hazardous
metals - into hundreds of streams and waterways and failing to
control spills of coal slurry during its mining operation.
Some of the waste water discharges were more than 10 times the
amounts allowed by state permits, the EPA said.
Massey officials announced the agreement Thursday, noting that
it would allow the company to avoid costly litigation and resolve
questions about its liability for the damage. "We believe this
agreement will benefit the environment as well as our
shareholders," said Baxter F. Phillips Jr., the company's
executive vice president and chief administrative officer.
The maximum penalties facing the company for the thousands of
violations and days when permits were exceeded could have been as
high as $2.4 billion, according to the EPA.
The pollution "destroyed streams, destroyed fish habitat. There
was definitely an environmental impact here," Granta Nakayama, the
assistant EPA administrator for enforcement, said in an interview.
"We thought it was very serious."
The $20 million civil penalty is the largest ever for discharge
permit violations under the Clean Water Act, said Nakayama. "This
is a landmark settlement for the environment, and raises the bar
for the mining industry."
As part of the agreement, Massey promises to develop and
implement new procedures and tracking systems to prevent waste
water discharges and slurry spills, and allow third-party audits of
its pollution prevention program. The company also agrees to set
aside 200 acres of riverfront land in West Virginia for
conservation and protection against future mining.
Ronald Tenpas, head of the Justice Department's environment and
natural resources division, said the measures agreed to by the coal
company "represent a significant step forward in the way that
mining facilities currently address Clean Water Act compliance."
The new pollution prevention measures are expected to keep an
estimated 380 million pounds of sediment and other pollutants from
Massey's mining operation out of the three states' waters each
year.
The settlement concludes an EPA investigation of more than two
years of Massey's mining operation. The complaint filed last May
alleged that Massey routinely released metals, sediment and acid
mine drainage into streams and rivers at amounts 40 percent or more
than allowed by state permits.
And investigators found that Massey's operations failed to
control spills of coal slurry, containing sediment and metals,
allowing it to clog streams and harm fish habitat.
Massey, which reported $89 million in profits on revenues of
nearly $1.7 billion for the first nine months of 2007, is the
largest coal producer in the Appalachia region, operating 19 mining
complexes - 33 underground and 11 surface mines as well as
processing facilities - in southern Virginia, southern West
Virginia and eastern Kentucky.
The company has been embroiled in a string of legal and
environmental disputes from complaints about its hilltop mining
practices and pollution of waterways to mine safety and
high-profile contract disputes.
Currently its president and chairman, Don Blankenship, is at the
center of conflict of interest allegations involving the chief
justice of West Virginia's supreme court. Photographs surfaced with
Blankenship and the justice, Elliott Maynard, socializing together
on the Mediterranean last summer - four months before the court in
a 3-2 decision with Maynard in the majority reversed a $76.3
million judgment against Massey in a dispute brought by a bankrupt
coal company. Other problems facing Massey include a $219.8 million
jury verdict awarded to Wheeling-Pittsburgh Steel Corp. in a
contract dispute and a record $1.5 million in fines by the federal
Mine Safety and Health Administration for safety violations
involving the deaths of two miners in a January 2006 mine fire. The
fire at the Aracoma Alma No. 1 Mine in Logan County, W.Va., also is
the subject of a federal criminal investigation.
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On the Net:
Environmental Protection Agency: www.epa.gov
Massey Energy Company: http://www.masseyenergyco.com/
