With permission from the Environment Protection Agency (New York, N.Y. – Feb. 2, 2015) Money from a historic settlement reached with Anadarko and Kerr-McGee has now been disbursed for cleanups across the country, including $438 million that will go toward paying for past and future cleanup work at two New Jersey Superfund sites. The settlement funds will be used at the Welsbach Superfund site in Camden and Gloucester City, New Jersey and reimburse the federal government for substantial cleanup costs at the Federal Creosote Superfund site in Manville, New Jersey.
The entire settlement provides of $5.15 billion to resolve claims that the Anadarko, Kerr-McGee and co-plaintiff Anadarko Litigation Trust fraudulently moved assets to evade liability for contamination at Superfund sites around the country. Of this total, approximately $4.4 billion will be used toward cleaning up contaminated sites. This is the largest sum ever awarded in this type of a bankruptcy-related environmental settlement with the federal government.
“This legal achievement in bankruptcy court is good for New Jersey and reminds others not to shirk their responsibility for environmental cleanups,” said EPA Regional Administrator Judith A. Enck said. “The $438 million portion of this settlement for two contaminated sites in New Jersey will allow EPA to continue its work to protect public health and the environment.”
Since its founding in 1929, Kerr-McGee operated various businesses around the country, including wood-treating, uranium mining and processing, thorium processing, and ammonium perchlorate manufacturing. By the early 2000s, Kerr-McGee had discontinued most of these historic business operations yet remained responsible for massive legacy environmental and tort liabilities related to those businesses. At that time, Kerr-McGee operated two core businesses: oil and gas exploration and production; and chemical production.
Beginning in 2001, Kerr-McGee, having concluded that its enormous legacy liabilities were a drag on its oil and gas business, embarked on a plan to separate its valuable oil and gas assets from these legacy liabilities. In particular, between 2002 and 2005, Kerr-McGee transferred these oil and gas assets to a “new” Kerr-McGee (one of the defendants), and then spun off the small, cyclical chemical business with 85-odd years of legacy liabilities, which was re-named Tronox, in 2006. A few months later, Anadarko acquired Kerr-McGee (and the oil and gas business) for $18 billion. Meanwhile, as a result of the transactions, Tronox was rendered insolvent and unable to pay for its legacy liabilities, and ultimately filed for bankruptcy in 2009.
The Welsbach Company and the General Gas Mantle Company used radioactive material thorium from the late 1890s to 1941 to make the gas lamps manufactured at the facilities glow brighter. It is believed that thorium-contaminated waste from the manufacturing process was used as fill in surrounding areas. As a result, the soil and buildings on the Welsbach and General Gas Mantle properties, as well as surrounding properties, were contaminated. Approximately $222 million will be paid to EPA for cleanup of thorium contamination at the Welsbach Superfund site in Gloucester City, New Jersey. Among ongoing efforts related to the site, EPA has removed more than 200,000 cubic yards of radiologically contaminated soil and building materials from more than 140 properties in the Gloucester City and Camden areas and has investigated more than 900 properties.
During the 1960’s, homes and a commercial mall were built on top of contaminated land on the Federal Creosote site, which had been used for more than 30 years to treat railroad ties with toxic levels of the chemical creosote. Approximately $216 million will be paid to the federal Superfund in repayment of costs previously incurred by EPA cleaning up the Federal Creosote Superfund site in Manville, New Jersey. Among other efforts at the site, EPA removed more than 450,000 tons of contaminated soil and cleaned up nearly 100 residential and commercial properties in Manville before completing work in 2008.
On April 3, 2014, the United States Department of Justice announced this settlement for public comment and judicial approval. After considering comments from the public, the United States sought approval of the settlement, and on November 10, 2014, the court for the Southern District of New York approved the agreement. The deadline for any appeals from the district court’s decision passed on January 20, 2015, without any appeals having been taken and the money has now begun to be dispersed.
More information can be obtained at the following web sites:
Case Summary: Settlement Agreement in Anadarko Fraud Case Results in Billions for Environmental Cleanups Across the Country http://www2.epa.gov/enforcement/case-summary-settlement-agreement-anadarko-fraud-case-results-billions-environmental
Welsbach Superfund Site in Gloucester, New Jersey http://www.epa.gov/region02/superfund/npl/welsbach/
Federal Creosote Superfund Site in Manville, New Jersey http://epa.gov/region02/superfund/npl/federalcreosote/