Federal environmental regulators believe a record $20 million fine, new pollution monitoring requirements and the threat of automatic penalties for additional violations will force Massey Energy Co. to change the way it does business.
Massey agreed to the fines and other steps to settle a major government lawsuit. In May 2007, regulators accused the company of thousands of water pollution violations across the Southern West Virginia and Eastern Kentucky coalfields.
If approved by a federal judge, the settlement announced Thursday would rank as the largest civil penalty ever for Clean Water Act permit limit violations.
The 54-page deal would also force Massey to set up extensive new pollution databases and conduct intensive compliance audits, as well as quickly fix problems and report company-wide progress to federal regulators.
"There is a lot of transparency now as this goes forward," said Robert Klepp, an attorney with the U.S. Environmental Protection Agency's Office of Enforcement and Compliance Assurance.
Massey must implement a series of detailed new pollution control plans, and pay an escalating scale of fines - starting at a minimum of $1,000 for the first citation - for future water permit violations, under the settlement.
Company officials must contract for a variety of independent environmental audits, start a new program to inspect and maintain slurry pipelines, and hire a special contractor to implement many of the settlement's requirements.
Massey must also design a series of new databases and warning systems to track violations, report those violations to management, and correct the underlying problems. Periodic reports of these steps must be filed with federal regulators.
"We hope we have them tied to a set of requirements whereby they are going to step forward and do the right thing," Klepp said. "We expect that their level of violations is going to go significantly down."
The settlement is subject to a 30-day comment period before being considered for approval by U.S. District Judge John T. Copenhaver Jr.
Citizen groups and environmental enforcement experts, while praising the deal, wondered why it took regulators so long to catch up to Massey, and why the punishment wasn't more serious.
"Here was my first reaction: Why didn't this go criminal?" said Pat Parenteau, an environmental law professor at Vermont Law School.
"It's very late in the game for a company of this size and sophistication to have a record of sustained violations like this," Parenteau said. "This strikes me as reckless, as gross negligence. I think this should have been a criminal indictment of the company."
In fact, two Massey subsidiaries had already pleaded guilty five years ago to criminal Clean Water Act violations. Those plea deals, with Omar Mining and Independence Coal, also included a long list of environmental audit, cleanup and reporting requirements.
EPA and U.S. Department of Justice lawyers cited those plea deals as among a long list of state and federal efforts to force Massey to begin abiding by coal industry environmental rules.
When they filed the suit in May 2007, government lawyers said Massey and its subsidiaries "have a long history of noncompliance" with water pollution rules. Massey operations, the government alleged, "remain in substantial noncompliance with the law."
The 28-page complaint, along with dozens of attached lists, detailed thousands of violations of permit limits for acidity, sediment, iron, manganese and other pollutants. The EPA said in many cases, Massey operations discharged pollution in amounts 40 times their legal limits.