Coal Giant Alpha Pays Biggest Water Fine Ever

MTRBy Peter Galuszka

Alpha Natural Resources of Bristol, the coal giant that took over troubled Massey Energy of Richmond in 2011, has the dubious honor paying the highest fines ever of $27.5 million for water pollution violations at its coal mining operations in five Appalachian states, including Virginia.

Massey Energy, the owner of the Upper Big Branch mine in West Virginia where an explosion killed 29 miners in the worst such disaster in the U.S. in 40 years, held the previous water pollution fine record of $20 million issued in 2008.

The Environmental Protection Agency says that from 2006 to 2013, Alpha and its subsidiaries violated water pollution permits 6,000 times and allowed toxic materials such as heavy metals into streams and the watersheds of Tennessee, West Virginia, Kentucky and Pennsylvania besides Virginia. The firm will also pay $200 million to reduce such toxic discharges.

The settlement comes after a pair of unrelated water pollution situations involving coal in West Virginia and North Carolina. Some 300,000 residents of the Charleston area went without drinking water for several days when a toxic chemical used to treat coal leaked into a river. Duke Energy faces fines in North Carolina for improperly maintaining its coal ash storage facilities, leading to a substantial spill into the Dan River which provides drinking water for Danville and eventually, Virginia Beach.

Alpha has touted its “Running Right” safety and management program as it absorbed Massey Energy and its rich coal reserves in a $7 billion deal. Alpha said it was retraining Massey workers who had suffered from Massey’s abusive corporate culture that cut corners on mine safety and environmental control, regulators say.

Alpha had agreed to pay $200 million in a deal with the U.S. Attorney’s Office of Southern West Virginia to cover violations from the Upper Big Branch which it bought and closed after acquiring Massey. Alpha later settled a number of shareholder lawsuits for $265 million. Some of the payout funding had factored into funds set up by Massey before the acquisition by Alpha.

Like most Appalachian coal producers, Alpha has been taking hits with soft markets for steam and metallurgical coal. Its 2013 revenues were $5 billion compared with $7 billion the year before.

Environmentalists say that Alpha’s fine does not address the massive ecological destruction of mountaintop removal strip mining which they say should be stopped at the permit stage. Alpha operates a number of such mines.

The latest fines involve 79 active coal mines and 25 coal processing plants.

Federal investigators are still probing Massey for violations of safety laws related to the operation of Upper Big Branch where the explosion occurred April 5, 2010 and other mines. So far, three former employees have been convicted and Massey’s former CEO Don Blankenship is said to be a target of the probe. There is also a suggestion that Alpha is cooperating with federal investigators in the investigation.

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