Coal firm to pay record fine for water pollution

WASHINGTON — One of the nation's largest coal producers will pay a $27.5 million fine and spend $200 million to reduce illegal toxic discharges into hundreds of waterways across five Appalachian states, according to a proposed settlement Wednesday.

The agreement includes the largest fine ever for violations of water pollution permits, with many of the violations reported by the company to state environmental officials. The Associated Press obtained details about the settlement before it was filed Wednesday in federal court in West Virginia.

The discharges occurred at mines and coal processing plants in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia.

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

The government says that between 2006 and 2013, Alpha Natural Resources Inc. and dozens of subsidiaries violated water pollution limits in state-issued permits more than 6,000 times. They 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. There is no evidence that any of the violations contaminated drinking water, EPA officials said.

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

Gene Kitts, Alpha's vice president for environmental affairs, said the company, which has 700 state water permits and 5,000 different discharge points, is in compliance with the Clean Water Act 99.8 percent of the time.

"That's a strong record of compliance," Kitts said in a statement. "But our goal is to do even better, and the consent decree provides an opportunity to proactively focus on improving the less than 1 percent of the time that permits are exceeded."

Half of the $27.5 the fine will go to the federal government; the other half will be divided among West Virginia, Pennsylvania and Kentucky.

But advocacy groups said state and federal authorities needed to do more to prevent the pollution from occurring in the first place.

"Levying fines after the fact does nothing for the communities and waterways already harmed," said Mary Anne Hitt, director of the Sierra Club's coal campaign.

Alpha's Kitts said in an interview with AP that the states lack resources to keep tabs on the violations the companies report and to follow up.

"That system has not worked very well," Kitts said. "The states get the reports, the question is what happens at that point."

Gov. Earl Ray Tomblin, D-W.Va., said his share of the fine — $8.9 million — will be spent on stricter enforcement of the laws at the state level.

"We still appreciate coal mining jobs and the investments here in West Virginia, but they've got to be responsible," Tomblin said.

The settlement comes nearly two months after the water supply for 300,000 people in and around Charleston, W. Va., was temporarily undrinkable after the spill of a coal-cleaning chemical on the banks of the Elk River.

Last month, a ruptured pipe underneath a coal ash impoundment at a Duke Energy power plant polluted the waters of the Dan River in North Carolina. State environmental officials in that case have cited Duke for not obtaining the proper permits for discharges into waterways.

The settlement with Alpha covers a different source of water pollution from coal — from mines and from the processing plants where the coal is prepared for shipping.

Still, 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 this 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 from coal waste sites. 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 final rules governing the disposal of coal ash.

Before Wednesday's settlement, Alpha already was hurting financially, but the company said the civil penalty would not result in any layoffs. Last year, Alpha 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 stemmed from that company's operations. Massey was fined $20 million in 2008 by the federal government for similar violations of water pollution laws.