A chemical company operating in Eastern North Carolina received a record $12 million fine for fluorochemical contamination, announced last week, but that penalty would likely have been less than half as much if an environmental group had not joined the state and the Chemours company at the negotiating table, a person who signed the settlement said.
Detailed in a proposed consent order, the tentative settlement also calls for Chemours to pay $1 million for investigative costs, meet pollution abatement and remediation goals, and ensure that people with tainted wells have clean water.
Chemours also must assess the potential toxicity of at least some of the host of substances that have turned up in water, the air, the ground and, recently, the blood of some residents.
The agreement stipulates monetary penalties Chemours will face for failing to meet the terms.
Chemours views the proposal as a chance to end 18 months of regulatory uncertainty that began in June 2017 with media reports about researchers’ discovery of GenX and similar substances from Chemours in the Cape Fear River and drinking water from the Cape Fear Public Utility Authority, which serves about 200,000 customers in New Hanover County.
Contamination subsequently turned up in public water systems in Brunswick and Pender counties and hundreds of private wells around the company’s Fayetteville Works plant.
The N.C. Department of Environmental Quality is accepting public comments on the proposed consent order until Dec. 21. The final agreement is subject to approval by Bladen County Superior Court Judge Douglas B. Sasser.
Fine could have been ‘less than half’
The proposal has drawn mixed reactions since its announcement the evening before Thanksgiving.
Some welcomed specific measures to address Chemours’ pollution, measures they said will be enforceable regardless of which political party controls the N.C. General Assembly.
Others questioned whether the state adequately considered downstream water users’ concerns or whether the fine sufficiently accounts for the scope of the company’s actions.
Fluorochemical pollution from the Fayetteville Works has occurred for almost four decades, they point out, saying $12 million is tiny compared with Chemours’ income: The company could cover that with an average day’s revenue, with millions left to spare.
“The civil penalty is clearly too low, especially when put into perspective with revenues and profits,” said Detlef Knappe, an N.C. State University professor and one of the researchers who discovered GenX in the Cape Fear River and downstream utilities.
“Such a low penalty sends a signal to others that it makes sense from a business perspective to pollute until caught.”
A person with a seat at the negotiating table with DEQ and Chemours, however, said the fine might easily have been much less.
Cape Fear River Watch became a party to the agreement as a result of a citizen lawsuit it filed against DEQ and Chemours, asking a federal court for measures to stop Chemours’ pollution and enforce federal pollution laws.
Under the proposed consent order, CFRW will be able to look over DEQ’s shoulder to monitor compliance. It also will drop its citizen lawsuit.
“We pushed very hard to get the maximum amount on that fine that we thought that we could get,” said Kemp Burdette, who leads the group as Cape Fear riverkeeper and signed the agreement on behalf of the CFRW.
“As you can imagine, the company was pushing for a much lower fine. DEQ’s position was somewhere in the middle.
“Without us in that settlement process, the fine would have been a fraction of that amount — less than half.
“I hear the complaints that $12 million isn’t that much for a company like Chemours. Is this enough of a punishment for four decades of contamination? I don’t know how you calculate that, but this is the best deal we felt like we could get and still have a seat at that table.”
Burdette compared Chemours’ proposed fine with a $7 million settlement in 2015 with Duke Energy over groundwater contamination from coal-fueled power plants.
“You can throw out any number you want and say it should have been a billion dollars,” Burdette said. “Well, maybe Chemours was a billion dollars guilty, but if you look back at the history of settlements and fines in North Carolina’s history, this is the highest one ever.”
Burdette pointed to actions in recent years by the Republican-controlled legislature that weakened state environmental regulations through cuts in funding or changes in the law.
“What this agreement does is say, ‘This is the way it’s going to be regardless of who is in the secretary’s chair over at DEQ, regardless of what they think about environmental regulation, regardless of who appointed them or their political party,’” Burdette said.
“The terms of this agreement are going to be followed to the letter of the law. They’re not going to be voluntary. They’re going to be required.”
Asked about Burdette’s assertion that the fine would have been less than half as much without CFRW’s involvement, DEQ spokeswoman Megan Thorpe responded by email: “We cannot discuss confidential negotiations.”
Eroded ‘trust in the regulatory system’
DEQ declined to say how the fine was determined.
Joel A. Mintz, a former attorney for the U.S. Environmental Protection Agency, explained that many regulators calculate such penalties based on the money a violator saved by not complying with applicable laws.
In addition, he said, although Chemours’ contamination may have begun far earlier, penalties likely would not account for violations prior to the June 2017 start of DEQ’s investigation.
“Since DEQ did not investigate Chemours’ emission problems until last year, unfortunately, it would probably not be able to penalize the company for pre-2017 violations in any court case,” said Mintz, a professor of environmental law and enforcement at the Shepard Broad College of Law at Nova Southeastern University in Fort Lauderdale, Fla.
“The pertinent question is this: How much did the company save by delaying compliance from the start of the DEQ’s investigations until the agreement went into effect? It may be that, given the relatively short time period involved, the $12 million penalty may be enough to be considered adequate, at least as I and EPA’s staff would probably see it.”
Chemours also has been sued by Cape Fear Public Utility Authority and Brunswick County, which seek to recoup damages they say resulted from Chemours’ pollution and costs that include planned multimillion-dollar treatment upgrades to filter it.
A consolidated suit on behalf of residents remains unresolved as well.
The agreement Chemours reached with DEQ and CFRW does not directly affect those lawsuits.
“We didn’t know Chemours and the state and River Watch were talking about it,” said George House, an attorney with Brooks, Pierce, McLendon, Humphrey & Leonard, a firm retained by CFPUA. “I don’t know what reasoning the state used to not engage us in this process.”
In a statement, CFPUA wrote: “While the proposed order addresses Chemours’ ongoing PFAS releases and immediate health concerns for communities in Bladen County in the vicinity of the Fayetteville Works facility, the order does not resolve the problem of PFAS contamination in drinking water supplies for New Hanover County.”
PFAS, or per- and polyfluoroalkyl substances, is a large group of more than 3,000 compounds, including GenX and the other fluorochemicals cited in the agreement.
Among other things, CFPUA stated, the proposal fails to mention contamination in Cape Fear River sediment or costs CFPUA has incurred or will incur to deal with Chemours’ contamination.
And although Chemours will pay to provide clean drinking water to some well-water users near the plant, the agreement makes no mention of similar measures for people downstream.
“Personally, I feel that not keeping us informed is disrespectful of our relationship with DEQ and disrespectful of the situation that we and this community have found ourselves in for the last two years as we have grappled with GenX,” Mike Brown, CFPUA board treasurer, said.
“DEQ is the entity charged with regulating discharges into the river,” Brown said. “It does not serve to build a lot of trust in the regulatory system when they keep us at arm’s length.”
Sheila Holman, DEQ assistant secretary for the environment, told reporters Thursday the order was “very much informed by investigation department has done.”
She said downstream concerns have been addressed with steps DEQ already has taken, such as requiring Chemours to stop its discharges into the river, as well as provisions in the agreement requiring the company to tell regulators what fluorochemicals it is sending to the river.
When pressed, though, she would not commit to barring Chemours from discharging fluorochemicals once it is permitted to resume those releases.
Chemours: This ‘holds us accountable’
Brian Long, Chemours plant manager at the Fayetteville Works, has placed a priority on regaining Chemours’ privilege to send waste into the river.
Assuming DEQ allows discharges to resume, Chemours will employ a variety of technologies to reduce fluorochemicals they contain, he said in an interview this week.
The agreement requires DEQ to “review and act timely” on Chemours’ permit applications, including its National Pollutant Discharge and Elimination permit, which governs discharge of manufacturing wastewater into the Cape Fear.
Late last year, Chemours suspended all such discharges from its North Carolina operations, collecting that wastewater for off-site disposal.
Long said the proposed agreement provides “a level of certainty about our operations, which is very, very important to our employees and the community and our company.”
“I feel like this agreement really gets to what the community was asking and looking for. It definitely encompasses what the regulators in our state were looking for and our company was looking for and Cape Fear River Watch was looking for.
“It provides a regulatory framework for how to regulate us and hold us accountable and ensure that we continue to be transparent about our operations,” Long said. “So, I feel good about all that.”
A number of the steps outlined in the agreement already were underway at the plant site.
Carbon adsorption units and a secondary scrubber added this year have reduced emissions by 80 percent, Long said. Fayetteville Works staff has worked out a plan that Long said will further throttle emissions to achieve the 92 percent reduction required by the end of this year.
The company recently began work on a $100 million project that includes technology it says will reduce fluorochemical releases by 99 percent or more from 2017 levels by the end of next year, a key requirement in the proposed consent order.
It also has added concrete walls to a cooling channel and begun lining a sediment pond, both of which DEQ cited as likely sources of fluorochemicals in groundwater at the site.
While agreeing to monetary payments and other measures, Chemours “does not admit” to violating any law or regulation in the proposed agreement with DEQ. The company “agreed to this consent order solely to avoid the expense, burden and uncertainty of litigation and to address community concerns about the facility.”
It is unclear how much of the state’s costs to investigate Chemours would be covered by the $1 million in the agreement.
Last year, DEQ told the N.C. House Select Committee on River Quality that more than 60 employees were involved in work related to the GenX investigation.
Staff at the N.C. departments of Health and Human Services and Justice also have participated.
Public comment and information sessions
DEQ is accepting public comments on the proposed consent order until Dec. 21. Comments may be submitted by email to email@example.com
Comments can also be mailed to:
Assistant Secretary’s office
RE: Chemours Public Comments
1601 Mail Service Center
Raleigh, NC 27699-1601
State regulators have scheduled an information session on GenX at 6 p.m. Dec. 11 at Bladen Community College Auditorium in Dublin. More information on the session is available from DEQ at this link.
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