Who will pay for Asarco's mess?
Published by MAC on 2006-03-19 Who will pay for Asarco's mess?
Company spewed hazardous waste from Tacoma (Washington State) to Texas, but its bankruptcy leaves cleanup efforts in question.
by SUSAN GORDON, The News Tribune
19th March 2006
A giant burial mound in Ruston holds the ruins of Asarco's copper smelter: bricks, mortar and soil so saturated with arsenic and lead that the crypt will have to be monitored forever to prevent leaks.
Still untouched are as many as 500 contaminated residential yards, adjacent Metro Parks properties and nearby aquatic lands. The estimated cleanup cost: $45 million.
But Asarco, a former Fortune 500 company, filed for Chapter 11 bankruptcy protection last year and might be able to walk away from some of the nation's most vexing and expensive environmental cleanups. That would burden taxpayers with more than $1 billion in obligations. And some regulators say that estimate is low.
The remaining cleanup in Ruston and Tacoma is a fraction of Asarco's greater injuries nationwide. Asarco has told the federal bankruptcy judge that state and federal officials blame the company for contamination at 94 sites in 21 states.
Creditors fighting over the remains of the company could raid a $62 million trust fund set up to pay for elements of the worst of the company's pollution problems, officials said. And because trust fund distributions are prioritized based on human health risks, cleanup efforts here could take a back seat to other places. Such as Omaha, Neb., home of the largest residential lead cleanup in the United States. Or El Paso, Texas, where contamination from a mothballed smelter and its 800-foot stack extends into Mexico and New Mexico.
It's unclear how much power the government's environmental lawyers will wield in the federal bankruptcy court. The Texas judge can't erase Asarco's court-ordered cleanup responsibilities, but there might not be enough money to pay for them.
The Asarco bankruptcy was among the 10 largest filed in the nation in 2005. The company's creditors are legion.
"We're in uncharted waters," said Kevin Rochlin, the U.S. Environmental Protection Agency manager overseeing the $180 million Tacoma cleanup.
Before Asarco, EPA officials had never confronted a polluter that sought to unload such a burden of cleanup duties in the middle of the process.
"There has never been anything of this magnitude and this complexity," he said.
The so-called Superfund is tapped out. The 1980 federal law was enacted to force polluters to pay the price of harm to public health and the environment, but the taxes on polluters expired and Congress has declined efforts to restore them.
In Ruston, Asarco is poised to sell its waterfront property to a Lacey developer, including the tomb and responsibility for the hazardous waste within it.
The developer, MC Construction, might assume responsibility only for half of the estimated $45 million in remaining work, depending on how negotiations with federal regulators go.
UNFINISHED CLEANUPS NATIONWIDE
More than a century of Asarco mining and metal extraction operations crisscrossing the West and Midwest have defiled dozens of places - among them whole towns - that include some of the nation's largest Superfund sites.
In many places, Asarco shares liability with other polluters who could be forced to pick up cleanup bills the bankrupt company won't.
In Idaho, for example, Asarco is among mining companies blamed for contamination spread across the 1,500-square-mile Coeur d'Alene River basin. Remedial work is likely to last for generations. The EPA has estimated the cost of the first 30 years at $359 million.
The total bill hasn't been divided, but in 2003 a federal judge found Asarco 100 percent liable for contamination at about a dozen North Idaho mine and mill sites. The judge assigned Asarco 22 percent liability for the mixed wastes of historical metal and mining operations.
In Omaha, Neb., the EPA says Asarco's past smelting and metal refinery operations are largely responsible for the lead contamination in a downtown residential area - home to 90,000 people - that federal officials have labeled a public health hazard.
For more than 120 years, Asarco ran a lead smelter and refinery on 23 acres along the west bank of the Missouri River. The smokestacks were the first thing drivers saw when they crossed the bridge from Iowa into Omaha.
The refinery broke air and water pollution limits during the last decades of its operation. It shut down in 1997, and Asarco demolished the buildings and built a public park in its place.
In 1998, the Omaha City Council - appalled after blood tests detected dangerously high levels of lead in hundreds of Omaha children - asked for federal help. In 2003, the EPA designated Omaha a Superfund site.
The Omaha site encompasses 20 square miles but could expand because the boundaries of the lead contamination haven't been mapped. The budget for the first five years of cleanup work is $77.4 million. The EPA also has ordered the Union Pacific Railroad to pay.
"By the time we're done, total site costs could be more than $200 million," said Bob Feild, an EPA manager for Omaha.
Other places sullied by Asarco's past mining and smelting operations include:
. Everett, where Washington Department of Ecology officials estimate 550 residential properties are contaminated with arsenic.
. East Helena, Mont., where a mothballed lead smelter is never expected to reopen.
. Hayden, Ariz., where a still-operating Asarco copper smelter has polluted its surroundings.
. Colorado's Rocky Mountains, where Asarco shares responsibility for a water treatment plant on the headwaters of the Arkansas River, a whitewater rafting and fly-fishing destination and a major source of irrigation water.
WHAT'S LEFT IN RUSTON
During 95 years of operations, state regulators say, Asarco's Ruston smokestack spread arsenic and lead contamination over 1,000 square miles. Asarco has denied this. And while regulators have never tried to force the company to pay, damages could be included in the state's bankruptcy court claim.
The state did not map the boundaries of the so-called smelter plume until years after federal officials approved a more limited Superfund cleanup of the smelter and the vicinity.
In 1983, the EPA added the Ruston smelter site to its Superfund national priorities list. Later, Asarco struck a deal that allowed the company to bury the waste on site as long as it redeveloped the area. The most highly contaminated material has been confined in the crypt.
But there's much left unfinished.
Asarco is responsible for the removal of contaminated soil from residential properties within a mile of the smelter. Two hundred properties that have been tested await cleanup, and as many as 300 more still need to be tested before the EPA decides whether to clean them up.
Besides the cleanup remaining on Asarco's 97 acres, estimates of the company's obligations in the Tacoma area include:
. As much as $8 million in residential soil removal to reduce exposure to lead and arsenic.
. Between $3 million and $5 million to clean up the slag peninsula, or breakwater, where the Tacoma Yacht Club stands.
. Between $17 million and $19 million to dredge the yacht basin and cap other contaminated sediments in Commencement Bay. Asarco owns some of the aquatic lands, while the state manages the rest.
RESIDENTS REMAIN FRUSTRATED
"We used to have a slogan: 'Countdown to 2003,'" said Tom Aldrich, Asarco's vice president for environmental affairs. By that year, Asarco was supposed to have readied its former Ruston smelter site for redevelopment.
Instead, 2003 marked another development, a court-approved settlement of a lawsuit filed by federal lawyers who had tried to prevent Asarco's parent company, Grupo Mexico, from taking control of Asarco's shares in a Peruvian copper mine.
The settlement, which permitted the asset transfer, was orchestrated to shore up an Asarco buffeted by historically low copper prices and burdened by debt.
In Tacoma, the effect was to slow the cleanup. Plans to dredge the yacht basin and cap shoreline areas were shelved. Work zeroed in on the smelter and the neighborhoods.
The bulk of the money came in small appropriations from the nationwide trust - originally worth $100 million - that Asarco set up as part of the settlement. But Asarco also kicked in some of its own money to dig up residential yards.
Until the bankruptcy, many Tacoma householders patiently waited for Asarco's contractor to come around. Some have learned to live with contaminated soil. They've received multiple health bulletins warning of the risks of exposure.
Even small amounts of lead cause learning and behavior problems in children. Arsenic is a poison linked to lung and skin cancers. Parents don't permit small children to dig in the earth. People try not to track dirt into their homes.
Phillip Hill, who works as a capital projects manager for Tacoma Community College, is among the critics who say Asarco reneged on its promises.
A couple of years ago, he and his wife, Sochi, bought a fixer-upper on North Stevens Street, in a neighborhood dominated by old houses, big trees and well-tended lawns.
Nobody's tested Hill's soil yet, but sampling of nearby yards showed evidence of contamination. So while he waited for Asarco to act, Hill took advantage of a little-known program Asarco offered to property owners within the cleanup zone.
Do-it-yourselfers could dig up contaminated dirt and dump it in metal barrels provided by Asarco. The company would haul the barrels away.
Hill got six 50-gallon drums from Asarco a few weeks before the bankruptcy. He dug up parts of his yard, planted flowers and raspberries and filled the barrels with the contaminated sod. The night before Asarco's bankruptcy became public, he left a voice-mail message on Asarco's line and asked for a pickup.
For months, no one touched the rusty, black barrels, which cluttered the alley behind Hill's house. "I hate them out there," Hill said last fall. "It's such an eyesore." Finally, late last year, workers removed the drums.
Before they were hauled way, Hill said the unwanted barrels were emblematic of Asarco's treatment of its neighbors. "Everyone is focused on the site on the water. But as we know, the cleanup is more than that. How many yards haven't been tested? In how many haven't they replaced the soils?"
WHAT'S NEXT
After Asarco's bankruptcy filing, the EPA tapped the trust fund set up in 2003 to continue the residential cleanups in Tacoma.
In fact, Tacoma was the biggest beneficiary in the first three years of trust fund distributions, with $16.6 million. Asarco used the money to complete the hazardous waste tomb and transport contaminated soils, among other things, from its Everett site to Ruston.
But it's uncertain whether what's left of the trust fund will stand up to the claims of Asarco's creditors.
And because the worst of the contamination from the Ruston smelter is already buried, what's left undone here might not rank as high on the EPA's priority list as other places lined up for future trust fund distributions.
Still, the Lacey developer who is negotiating with the EPA to take the title to the property insisted that cleanup obligations will not be ignored, though he has not signed documents saying so.
"There's no task from the original Superfund consent decree that's not being addressed," said Mike Cohen of MC Construction Consultants.
He has volunteered to clean up Metro Parks' breakwater peninsula and to cover contaminated sediment offshore.
But he draws the line on yard restoration - "EPA has from day one said they're comfortable taking that over" - and isn't inclined to clean up the Tacoma Yacht Basin or Point Defiance Park lands south of there.
The trust fund is likely to be the only source of money for that work, Rochlin, the EPA manager, said.
"There is no other way to do it," he said.
The bankruptcy process could last for years. And the way the court treats Asarco's environmental cleanup obligations could test environmental law.
"Depending on what happens here, it could have wide-ranging effects throughout the West," said Ken Weiner, a Seattle environmental lawyer who has represented Everett in Asarco matters.
The overview
Here's a glance at some of the Asarco and Superfund issues:
CONGRESS At least two bills have been introduced that would reinstate a corporate polluter tax to provide money for the Superfund. Both have been assigned to the House Ways and Means Committee. Action is considered unlikely.
ADMINISTRATION The Bush administration has proposed providing $1.2 billion in federal tax dollars for the Superfund in the next fiscal year. That's in line with previous spending levels. The administration has shown no interest in reinstating the polluter tax.
COURT Asarco filed for Chapter 11 bankruptcy, which would allow it to reorganize rather than liquidate. Federal Bankruptcy Judge Richard Schmidt in Corpus Christi, Texas, is overseeing the proceedings. The case could take several years to resolve.
STATE DELEGATION Democratic members of the Washington state congressional delegation are generally supportive of efforts to reinstate the corporate polluter tax, though none is taking a leadership role. The state's Republicans would likely oppose such a move. Rep. Norm Dicks, D-Belfair, and Sen. Maria Cantwell, D-Wash., have expressed concern about the Asarco bankruptcy. They can be reached through their Web sites, www.house.gov/dicks and www.cantwell.senate.gov/.
SUPERFUND The Superfund program is run by the federal Environmental Protection Agency. The agency's Web site, www.epa.gov/superfund/index.htm, has a section devoted to the Superfund.