News Feature | May 12, 2014

Oil Company Owes Billions For Contaminating Water Nationwide

By Sara Jerome
@sarmje

oilspill

Finalizing the largest environmental cash settlement in history, the Justice Department closed a $5.15 billion deal with Anadarko Petroleum this month.

The deal addresses years of environmental claims against a chemical and manufacturing business known as Kerr-McGee, which the oil company Anadarko partially absorbed in 2006. 

Kerr-McGee contaminated water resources and environmental waters at sites across the country.

For instance, "Kerr-McGee’s perchlorate business contaminated Lake Mead, which flows into the Colorado River and provides drinking water to much of the Southwest United States," said Deputy Attorney General James Cole,  in the Corporate Crime Reporter

In another example, the company harmed the water supply in Mississippi.

"For 75 years, a factory in Columbus, Miss., churned out railroad ties treated with chemicals to resist weather and bugs. Even before Kerr-McGee Chemical closed the plant in 2003, the community in northeast Mississippi knew that its soil and water had been tainted with creosote, a toxic tar," the Wall Street Journal reported

It is still unclear how bad the resulting contamination from this site is, the Journal reportedSimilar circumstances apply to over 2,700 Kerr-McGee sites across the country. 

"In Nevada, for example, chemicals from making bombs and rocket fuel contaminated drinking water. And in Arizona, radioactive rock from a uranium mine was used to build homes," the report said. 

Under the terms of the deal, Anadarko has agreed to "clean up dozens of sites across the country and compensate more than 7,000 people living with the effects of [contamination]," the Washington Post reported

Anadarko had previously held that it was not responsible for actions committed by Kerr-McGee. 

"Anadarko had argued that it could not be held liable for pollution caused by Kerr-McGee, which had ostensibly passed the liabilities on to a spinoff company called Tronox, which later declared bankruptcy. But a bankruptcy judge said the reorganization was simply an attempt to dodge liability," the New York Times reported

Hollywood helped raise awareness about Kerr-McGee's offenses when Meryl Streep starred in a movie based on this story in 1983. 

"Most Americans may not have heard of Kerr-McGee, though they are probably familiar with the movie 'Silkwood,' which depicts the case of one of the company's employees, Karen Silkwood, who alleged that she had been exposed to deadly levels of radiation while working at one of its uranium-processing facilities," the Washington Post reported in a separate piece. 

The final deal was larger than the Anadarko had envisioned, the Wall Street Journal reported in a separate piece. 

But it could have been much worse. 

"Investors rejoiced at the resolution of a liability that could have run as high as $14 billion," the report said. 

Check out Water Online's Drinking Water Contaminant Removal Solution Center

Image credit: "Oil spill, Grand Isle 06.07.2010 182," lsgcp © 2010, used under an Attribution-ShareAlike 2.0 Generic license: https://creativecommons.org/licenses/by-sa/2.0/deed.en

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