Kerr-McGee Corp. and its parent Anadarko Petroleum Corp. will pay a record $5.15 billion to remediate polluted industrial sites around the U.S., with $1 billion of that going to uranium cleanup on the Navajo Nation, the U.S. Department of Justice announced on April 3.
The settlement caps a years-long legal battle over whether the two companies were responsible for cleaning up the waste from their abandoned operations after a spinoff that held the liability went bust.
“Kerr-McGee spun off its chemicals business and old environmental liabilities as Tronox Inc. beginning in 2005,” Bloomberg explained. “About three months after the transaction was completed, Anadarko offered to buy Kerr-McGee’s oil and natural gas assets for $18 billion. Tronox filed for bankruptcy in 2009 and sued Kerr-McGee over the environmental debt. The U.S., as Tronox’s largest creditor, intervened on behalf of the EPA.”
The Justice Department held that the spinoff and subsequent bankruptcy were nothing more than a ploy to evade responsibility and in fact constituted fraud. In December 2013 a bankruptcy judge ruled that Anadarko and Kerr-McGee were liable for damages ranging from $5.1 billion to $14.1 billion.
Of the $1 billion, $985 million will go to the U.S. Environmental Protection Agency for cleanup of radioactive waste at 50 abandoned uranium sites within and surrounding the Navajo Nation, the Justice Department said. Another $43 million will go directly to the Navajo Nation so it can clean up radioactive waste at the Kerr-McGee uranium mill in Shiprock, New Mexico.
“I am proud to say ahe’hee to the Navajo people for your patience and prayers,” Navajo Nation Ben Shelly said in a statement, though noting that the settlement—the Navajo put the number of mines to be cleaned up at 49—barely makes a dent in the number of sites. “The settlement will be a great help in restoring the abandoned uranium mine sites, but we must not forget about the 460 other sites still in need of cleanup funds.”
Kerr-McGee did not just mine uranium. The company also processed radioactive thorium, treated wood with creosote and manufactured the rocket-fuel component perchlorate, the Justice Department said. Besides the Navajo uranium contamination, the company’s operations left radioactive thorium in the Chicago area; creosote waste in the Northeast, Midwest and South; and perchlorate waste in Nevada, the Department of Justice said in a media release announcing the settlement.
“Kerr-McGee's businesses all over this country left significant, lasting environmental damage in their wake,” Deputy Attorney General James Cole said in the DOJ statement. “It tried to shed its responsibility for this environmental damage and stick the United States taxpayers with the huge cleanup bill. Through a lot of hard work, we uncovered this fraud and recovered over $5 billion dollars for the American people. This settlement demonstrates the Justice Department’s firm commitment to preventing and combating all forms of fraud and to securing environmental justice.”