Coal company is fined $20 million in dumping case

Los Angeles Times Staff Writer

Massey Energy Co., the country's fourth-largest coalproducer, has agreed to pay a $20 million fine to settle federalcharges that it repeatedly dumped dangerous amounts of mine waste andsediment into creeks and rivers in three Appalachian states over aseven-year period.

Massey also agreed to improve pollution controls and restore partsof the Little Coal River watershed, which will require an additionalinvestment of $10 million, according to Environmental Protection Agency estimates.

The EPA investigated Massey for two years and filed a lawsuitagainst the company in May, alleging that it exceeded the levelsallowed by its permits more than 4,500 times between January 2000 andDecember 2006. The suit contended that the company poured as much as10 times the permitted amounts of sediment, heavy metals and acid minedrainage into the streams of West Virginia, Virginia and Kentucky.

"There were fish with gills clogged so that they couldn't breathe.There were bugs coated with metals from this discharge," said RobertKlepp, the EPA's lead attorney in the case. "This is in Appalachia,one of the richest bio-diverse watersheds in the world."

The civil penalty is the largest in the EPA's history forviolations of wastewater discharge permits, which states issue toregulate contamination under the Clean Water Act. The largest CleanWater Act fine ever was $34 billion, paid by Colonial Pipeline in 2003to settle charges in connection with oil spills.

The additional measures agreed to by Massey will prevent about 380million pounds of sediment and toxic metals from entering waterwayseach year, Klepp said.

The penalty, announced Thursday and subject to federal courtapproval, "is unprecedented in the coal mining industry," he said.The lawsuit sought fines that could have added up to more than $1billion, but the EPA lawyer said the government took intoconsideration Massey's effect on the local economy

"We're satisfied with the result," Klepp said.

Massey, which is based in Richmond, Va., and operates 19 miningcomplexes in Appalachia, is valued at $2.6 billion. "This is reallymore than a slap on the wrist, but it's not going to be devastating toMassey," said Joe Lovett, executive director of the AppalachianCenter for the Economy & the Environment.

Other mining companies operating in the region "should beworried," he added.

He contended, however, that the EPA's action does not outweighsteps taken by the U.S. Army Corps of Engineers to make it easier formining companies to practice mountaintop removal and other forms ofstrip mining that contribute to the heavy discharges.

"They're nibbling around the edges," Lovett said. "EPA has justtaken some steps to rein in the worst abuse."

Massey's assistant general counsel, M. Shane Harvey, said thecompany has not admitted to the actions described by the EPA,"certainly not to all 4,500" violations.

"We have 2,500 outlets, and we have to meet effluent limits at allof them," he said. "There have been occasions in the past where wehave failed to meet those limits."

The company decided to settle to avoid the costs and uncertaintiesof litigation, he said. Massey previously had set aside $5 million forthe lawsuit, and the company will adjust its fourth-quarter results toreflect the additional $15 million.

Massey has agreed to install an electronic monitoring system todetect problems and will hire an independent environmental auditor whowill submit reports to EPA. The company also will improve waterquality at 20 sites along the Little Coal River in West Virginia andprotect 200 acres of riverfront property through conservationeasements.

"We've got to give nature a chance" to clean up the damage, Kleppsaid.

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