FRANKFORT — The state Energy and Environment Cabinet filed consent judgments Friday against two coal companies, fining each more than $300,000, but far less than environmentalist groups say the companies should face. The action comes after four environmental groups in October charged ICG and Frasure Creek Mining submitted fraudulent water discharge reports covering as many as 20,000 violations which could result in more than $700 million in fines.
Cabinet Secretary Len Peters and Bruce Scott, Commissioner of Environmental Protection, said the cabinet conducted an exhaustive examination of the companies and the water testing labs they use and has expanded its investigation to other coal companies and laboratories. But they said the reports cited by the environmental groups contained “mostly transcription errors” rather than fraud.
“There were only six or seven numerical violations,” according to Scott. Peters said the problem occurred with the labs, although he said the coal companies are ultimately responsible.
Appalachian Voices, Kentuckians for the Commonwealth, Kentucky Riverkeeper and Water Alliance claimed the companies submitted fraudulent discharge reports and announced they planned to sue the coal companies. Under the Clean Water Act, if a judge approves the judgments, the environmentalists’ suit could be stopped. The judge can sign the judgments or set a hearing date before making a decision.
In October, Karl Kaplan, an attorney for the environmental groups, suggested the state might settle complaints against the two companies “for pennies on the dollar.” Scott on Friday brushed off Kaplan’s suggestion, saying the fines reflect the actual violations and transcription errors aren’t subject to the fines calculated by the environmentalists. The fines - $350,000 for ICG and $310,000 for Frasure Creek – are less than 1 percent of what the environmentalists calculated.
Donna Lisenby of Appalachian Voices said the state “makes much of the role that uncertified laboratories play, but any attempt to deflect responsibility away from these coal companies is invalid and unjustified.”
Ted Withrow, a retired employee of the Division of Water and a KFTC member, said the judgments “are about par for the course and what I expected.”
“This settlement appears to have been written by the coal companies and does not address the criminal fraud that the (proposed) lawsuit alleges,” Withrow continued. He said the fines are minimal and remedial actions demanded by the state are no more than what the law already requires. “And the Energy and Environment Cabinet totally ignores its own complicity by its complete failure to even look at the monitoring reports.”
Peters said the cabinet’s investigation did not result in any disciplinary action within the cabinet for failing to flag the discharge reports.
A statement by ICG said the investigation “did not find evidence of actual on-the-ground violations of water quality standards and the sites at issue enjoy a good compliance record for meeting water quality standards.”
Gene Kitts, ICG Senior Vice President for Mining Services, said ICG will demand the labs promptly “address the concerns raised by the state.” But he said ICG is “pleased to confirm that there is no evidence of intentional wrong-doing and that there were no on-the-ground violations of water quality standards.”
A man who answered the phone at Frasure Creek’s Bulan, Ky., office referred questions to the company’s West Virginia office. Calls to that number weren’t answered.
The judgments also require the companies to submit corrective action plans which ensure future discharge monitoring reports are correct and identify persons responsible for the reports.
Lisenby said had it not been for an investigation by Appalachian Voices, “stacks and stacks of unreviewed discharge reports would still be sitting there.” Environmentalists found stacks of dust-covered reports in the London office of the Division of Water. They also found reports covering the months of August and September of 2009 but were signed and dated in July of 2009 as well as reports indicating 40 times the allowable level of manganese was discharged into a stream.
Scott said those were “transcription errors.” Asked why state regulators didn’t flag the reports, Peters said the cabinet simply doesn’t have enough people to perform its duties.
The laboratories used by the companies aren’t required to be certified but Peters wants the General Assembly to pass legislation requiring their certification. Gov. Steve Beshear issued a statement supporting Peters’ request.
“We must work cooperatively to bring about changes in statutes and regulations that help protect our environment while at the same time allowing our coal industry to continue its work in meeting the energy needs of the commonwealth,” Beshear said.
Lisenby said the environmentalist groups continue to investigate discharges by other coal companies.
“We continue to believe we have exposed only the tip of a very, very deep iceberg,” she said.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort, Ky. He may be contacted by email at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.