Coal company to pay record $27.5 million fine for pollution in Kentucky, four other states

Associated PressMarch 5, 2014 

WASHINGTON — One of the nation's largest coal companies will pay a record $27.5 million fine over violations of federal clean-water rules in Kentucky and four other Appalachian states.

Alpha Natural Resources also will spend an estimated $200 million to reduce illegal pollution discharges into hundreds of waterways in Appalachia, the U.S. Environmental Protection agency announced Wednesday.

The $27.5 million fine is the largest ever for violations of water-pollution permits under the federal Clean Water Act, the EPA said.

The discharges — many of them from Massey Energy mines that Alpha later acquired — occurred in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia.

"This is the largest one, period," said Cynthia Giles, head of the Environmental Protection Agency's enforcement office. "It's the biggest case for permit violations for numbers of violations and size of the penalty, which reflects the seriousness of violations."

Half the fine will go to the federal government, with the rest divided among West Virginia, Pennsylvania and Kentucky.

Kentucky's share will be $687,500, according to Dick Brown, a spokesman for the state Energy and Environment Cabinet. West Virginia will receive $8.9 million and Pennsylvania will get $4.1 million, the EPA said.

"We believe the terms of the agreement make for a fair resolution of the violations and a workable plan to prevent the future occurrence of violations," Brown said in a statement.

The government said that between 2006 and 2013, Alpha Natural Resources and dozens of its subsidiaries violated pollution limits in state-issued permits more than 6,000 times.

Violations in Kentucky subject to the settlement occurred in Pike, Martin, Letcher, Harlan and Knott counties and involved eight coal companies, according to the Energy and Environment Cabinet.

Across the five states, Alpha and subsidiaries violated pollution limits in 336 permits affecting hundreds of miles of waterways.

The coal companies discharged heavy metals and other contaminants harmful to fish and other wildlife from nearly 800 outfall pipes directly into rivers, streams and tributaries, according to the government.

Monitoring records attached to the complaint show that in some cases, the releases exceeded permit limits by 35 times.

Under the agreement, the mine operators will install wastewater treatment systems and take other measures aimed at reducing discharges from 79 active coal mines and 25 coal-processing plants in those five states.

Bristol, Va.-based Alpha, the nation's third largest coal supplier, estimates those steps will cost about $200 million.

"Today's agreement is good news for communities across Appalachia, who have too often been vulnerable to polluters who disregard the law," said Robert G. Dreher, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division.

EPA estimates the upgrades and treatment required by the settlement will reduce discharges of total dissolved solids by over 36 million pounds each year, and will cut metals and other pollutants by approximately nine million pounds per year, the agency said.

However, environmental groups said they were not impressed by the settlement despite the record fine and requirements for improved treatment.

"There is no excuse for companies that know the law and have permits to pollute within certain limits to violate those limits over and over again," Cindy Rank, with the West Virginia Highlands Conservancy, said in a statement. "It's unconscionable for regulatory agencies to let those companies slide for so long that a large settlement — though possibly no more than a slap on the wrist in the larger scheme of things — merits any amount of praise or rejoicing. Our waters are our life blood and we all deserve better."

The government's complaint noted that violations continued even after prior agreements with Massey and Alpha.

For the Obama administration, the settlement is likely to generate more criticism from the coal industry, their lobbyists and supporters in Congress.

They have said that the administration is going after coal with new regulations aimed at reducing mercury and other toxic air pollutants from power plant smokestacks, as well as the first-ever proposal to reduce carbon from yet-to-be-built coal-fired power plants.

But when it comes to water and coal, the administration mostly has played catch-up.

The EPA says coal mining and the burning of coal for electricity are some of the largest sources of water pollution in the country. But the agency has struggled to get a hold on the problem.

Efforts by the EPA to address pollution from mountaintop coal mines have been vacated by a federal court. That decision is under appeal.

There are no federal limits on the vast majority of chemicals that power plants pipe directly into rivers, streams and reservoirs. The EPA last year proposed setting limits on a few of the compounds, in what would be the first update since 1982.

Also, more than five years after a spill from a coal ash pond in Tennessee covered 300 acres, the EPA has not issued rules governing the disposal of coal ash.

Before Wednesday's settlement, Alpha already was hurting. Last year, the company lost $1.1 billion on total revenues of $4.9 billion.

The company acquired Massey Energy in 2011, and more than half of the violations covered by the new settlement, including stemmed from Massey operations. The federal government fined Massey $20 million in 2008 for similar violations of water- pollution laws.

Herald-Leader reporter Bill Estep contributed to this story.

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