Coal producer agrees to $30M settlement for extensive pollution of streams and waterways

WASHINGTON — The country's fourth-largest coal producer, Massey Energy Co., has agreed to a $30 million settlement with the government over allegations that over seven years it routinely polluted hundreds of streams and waterways in West Virginia and Kentucky with sediment-filled waste water and coal slurry.

Under the agreement with the Environmental Protection Agency, Massey Energy, headquartered in Richmond, Va., will pay $20 million in civil penalties and invest an additional $10 million in pollution control improvements at its 44 mines and coal facilities in the two states and in Virginia, the EPA and Justice Department were announcing on Thursday.

The agreement settled a complaint filed by the EPA in May 2007 alleging that the company violated the federal Clean Water Act on at least 4,500 occasions between January 2000 and the end of 2006 by discharging mining waste and sediment — including hazardous metals — into hundreds of streams and waterways and failing to control spills of coal slurry during its mining operation.

Some of the waste water discharges were more than 10 times the amounts allowed by state permits, the EPA said.

Massey officials announced the agreement Thursday, noting that it would allow the company to avoid costly litigation and resolve questions about its liability for the damage. "We believe this agreement will benefit the environment as well as our shareholders," said Baxter F. Phillips Jr., the company's executive vice president and chief administrative officer.

The maximum penalties facing the company for the thousands of violations and days when permits were exceeded could have been as high as $2.4 billion, according to the EPA.

The pollution "destroyed streams, destroyed fish habitat. There was definitely an environmental impact here," Granta Nakayama, the assistant EPA administrator for enforcement, said in an interview. "We thought it was very serious."

The $20 million civil penalty is the largest ever for violations of the Clean Water Act, said Nakayama. "This is a landmark settlement for the environment, and raises the bar for the mining industry."

As part of the agreement, Massey promises to invest $10 million to develop and implement new procedures and tracking systems to prevent waste water discharges and slurry spills, and allow third-party audits of its pollution prevention program. The company also agrees to set aside 200 acres of riverfront land in West Virginia for conservation and protection against future mining.