WASHINGTON — The country's fourth-largest coal producer, Massey Energy Co., has agreed to pay a landmark $20-million fine to settle federal charges that it repeatedly dumped dangerous amounts of mine waste and sediment into creeks and rivers in three Appalachian states over a seven-year period.
Massey also agreed to improve pollution controls and restore parts of the Little Coal River watershed, which will require a total additional investment of $10 million, according to Environmental Protection Agency estimates.
The EPA investigated Massey for two years and filed a lawsuit against the company in May, alleging that it exceeded the levels allowed by its permits more than 4,500 times between January 2000 and December 2006. The suit contended that the company poured as much as 10 times the permitted amounts of sediment, heavy metals and acid mine drainage 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 Robert Klepp, 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 for violations of wastewater discharge permits, which are issued by the states to regulate contamination under the Clean Water Act. The largest Clean Water Act fine ever was $34 million, paid by Colonial Pipeline in 2003 to settle charges in connection with oil spills.
The additional measures agreed to by Massey will prevent about 380 million pounds of sediment and toxic metals from entering waterways each year, Klepp said.
The penalty, announced Thursday and subject to federal court approval, "is unprecedented in the coal mining industry," he said.
The lawsuit sought fines that could have added up to more than $1 billion, but the EPA lawyer said the government took into consideration Massey's effect on the local economy
Massey, which is based in Richmond, Va., and operates 19 mining complexes in Appalachia, is valued at $2.6 billion. "This is really more than a slap on the wrist, but it's not going to be devastating to Massey," said Joe Lovett, executive director of the Appalachian Center for the Economy & the Environment.
Other mining companies operating in the region "should be worried," he added.
He contended, however, that the EPA's action does not outweigh steps taken by the U.S. Army Corps of Engineers to make it easier for mining companies to practice mountaintop removal and other forms of strip mining that contribute to the heavy discharges.
"They're nibbling around the edges," Lovett said. "EPA has just taken some steps to rein in the worst abuse."
Massey's assistant general counsel, M. Shane Harvey, said the company 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 all of them," he said. "There have been occasions in the past where we have failed to meet those limits."
The company decided to settle to avoid the costs and uncertainties of litigation, he said. Massey had previously set aside $5 million for the lawsuit, and the company will adjust its fourth-quarter results to reflect the additional $15 million.
Massey has agreed to install an electronic monitoring system to quickly detect problems and will hire an independent environmental auditor who will submit reports to EPA.
The company will also improve water quality at 20 sites along the Little Coal River in West Virginia and protect 200 acres of riverfront property through conservation easements.