Feds reach $5.15B settlement over uranium mining cleanup

By Dina Cappiello, Eric Tucker, & Felicia Fonseca, Associated Press
In this May 7, 1953, file photo, Navajo miners work at the Kerr McGee uranium mine at Cove, Ariz., on the Navajo reservation in Arizona. Kerr-McGee left abandoned uranium mine sites, including contaminated waste rock piles, in the Lukachukai mountains of Arizona and in the Ambrosia Lake area of New Mexico. The Lukachukai mountains are located immediately west of Cove, Ariz., and are a culturally significant part of the Navajo Nation. This site is among thousands that are part of the $5.15 billion settlement with Anadarko Petroleum Corp. with approximate amount of funding for cleanup efforts and details about the sites, in information provided by the Justice Department. (AP Photo)
Copyright 1953, The Associated Press

FLAGSTAFF, Arizona (AP) — For decades, uranium ore was mined from the Lukachukai Mountains of northeastern Arizona, providing Navajos with much-needed employment but leaving behind a legacy of death and disease on the reservation.

Uranium waste was thrown over the mountainside and carried by rain across the remote but scenic land used by hikers, anglers, medicine men and Navajo shepherds. The roughly 50 mine sites were eventually abandoned without cleaning up the contaminated waste.

The Navajo Nation now has its best chance yet to address what has been a source of heartache for families. The federal government announced Thursday that it reached a $5.15 billion settlement with Anadarko Petroleum Corp. (NYSE: APC) for the cleanup of thousands of long-contaminated sites nationwide. About $1 billion will go to the 50 sites on the country's largest American Indian reservation.

The settlement that resolves a legal battle over Tronox Inc., a spinoff of Kerr-McGee Corp., is the largest ever for environmental contamination. The bulk of the money — $4.4 billion — will pay for environmental cleanup and be used to settle claims stemming from the legacy contamination. Anadarko acquired Tronox in 2006.

The Justice Department said Kerr-McGee, founded in 1929, left behind a long legacy of environmental contamination: polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive waste piles throughout the territory of the Navajo Nation and dumping carcinogenic creosote in communities throughout the U.S. East, Midwest and South at its wood-treating facilities.

The company, rather than pay for the environmental mess it created, decided to shift the liabilities between 2002 and 2006 into Tronox, the Justice Department said, while Kerr-McGee kept its valuable oil and gas assets.

"Kerr-McGee's businesses all over this country left significant, lasting environmental damage in their wake," said Deputy Attorney General James Cole. "It tried to shed its responsibility for this environmental damage and stick the United States with the huge cleanup bill."

The settlement releases Anadarko from all claims against Kerr-McGee.

"This settlement ... eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities," said Anadarko CEO Al Walker.

The settlement funds will be paid into a trust that covers cleanup of contaminated sites in 22 states and the Navajo Nation. Among the dozens of locations targeted for cleanup under the settlement is a former chemical manufacturing site in Nevada that has led to contamination in Lake Mead and a Superfund site in Gloucester, New Jersey, polluted by thorium.

The mountainous sites near the Navajo community of Cove rarely are visited, but a network of roads established for mining, logging and firewood gathering provide access. Tribal officials say Navajo medicine men gather plants and herbs for prayer and healing purposes from the mountains, and families set up summer camps where sheep graze nearby.

"I have a feeling of just deep appreciation for the Navajo children, who literally are playing in uranium piles today who aren't going to have to do that in the future," said David Taylor, an attorney with the Navajo Nation Department of Justice.

But, Taylor added: The path before us is still monumental. We've got a good start now, and I hope we can build on that."

The $1 billion will address about 10 percent of the Navajo Nation's inventory of abandoned uranium mines, including areas of northwestern New Mexico.

"The mess that's on the Navajo Nation in terms of abandoned uranium mines should never have been put there, and all of us have been waiting for this day to start to make a big dent in the cleanup," said Jared Blumenfeld, the U.S. Environmental Protection Agency's regional administrator in San Francisco.

The U.S. initially sought $25 billion to clean up decades of contamination at dozens of sites. A U.S. bankruptcy judge in New York in December found Kerr-McGee had improperly shifted its environmental liabilities to Tronox and should pay between $5.15 billion and $14.2 billion, plus attorney's fees. Cole said at a news conference Thursday that the government decided that the $5.15 amount was more than enough to cover the damages.

"It provides us with recovery now as opposed to years and years down the road," he said.

Tronox said in a statement that the settlement means environmental cleanup can begin and that people harmed by the pollution can be compensated.

After the settlement's announcement, Anadarko's stock rose 15 percent, to $99.43.

___

Tucker and Cappiello reported from Washington, D.C.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs