$5.1B pollution fine for oil firm
Published 12:00 am Friday, April 4, 2014
HOUSTON — Settling environmental claims that have been languishing in the justice system for more than five years, Anadarko Petroleum said on Thursday that it had agreed to pay the United States government more than $5.1 billion to restore thousands of sites polluted by toxins and compensate thousands of personal-injury claimants.
The case originated with claims against Kerr-McGee, an Oklahoma energy and chemical company that went bankrupt and was bought by Anadarko nearly a decade ago.
Anadarko, a Texas company, had long argued in court that it could not be held liable for pollution caused by Kerr-McGee, which had ostensibly passed the liabilities on to a third company, Tronox, which also has since gone bankrupt.
But on Thursday, Anadarko hailed the agreement.
“This settlement agreement with the Litigation Trust and the U.S. government eliminates the uncertainty this dispute has created,” Al Walker, Anadarko’s chief executive, said in a statement.
In 2005, Kerr-McGee spun off its chemical business and transferred environmental liabilities to Tronox. It spun off its oil and gas businesses to Anadarko for $18 billion three months later.
Tronox declared bankruptcy in 2009 after spending as much as $126 million a year dealing with Kerr-McGee’s environmental problems, which stretched from Mississippi to Pennsylvania.
The Environmental Protection Agency argued that the bankruptcy did not dissolve all corporate responsibility for the toxic legacy.
Shortly after its bankruptcy, Tronox sued Anadarko and its Kerr-McGee unit, arguing that Kerr-McGee had improperly unloaded the environmental liabilities on Tronox before the Anadarko takeover. The Justice Department and the EPA joined in the Tronox suit, saying Anadarko was the actual creditor for the damages that the EPA was trying to clean up.
The government had sought more than $20 billion to clean up more than 2,700 polluted sites and compensate more than 8,000 people claiming respiratory ailments, cancer and other diseases from chemical exposure.