WASHINGTON - The federal government on Thursday reached a $5.15 billion settlement with Anadarko Petroleum Corp., the largest ever for environmental contamination, to settle claims related to the cleanup of thousands of sites tainted with hazardous chemicals for decades.
The bulk of the money - $4.4 billion - will pay for environmental cleanup and be used to settle claims stemming from the legacy contamination.
The settlement resolves a legal battle over Tronox Inc., a spin-off of Kerr-McGee Corp., a company Anadarko acquired in 2006.
Kerr-McGee, founded in 1929, left behind a long legacy of environmental contamination: polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive waste piles throughout the territory of the Navajo Nation, and dumping carcinogenic creosote in communities throughout the East, Midwest and South at its wood-treating facilities.
The company, rather than pay for the environmental mess it created, decided to shift the liabilities between 2002 and 2006 into Tronox. Kerr-McGee, meanwhile, kept its valuable oil and gas assets.
"Kerr-McGee's businesses all over this country left significant, lasting environmental damage in their wake," said Deputy Attorney General James Cole. "It tried to shed its responsibility for this environmental damage and stick the United States with the huge cleanup bill."
The settlement releases Anadarko from all claims against Kerr-McGee. "This settlement ... eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities," said Anadarko CEO Al Walker.
The settlement funds will be paid into a trust that covers cleanup of sites across 22 states and the Navajo Nation.
As part of the settlement, the EPA will get about $224 million for cleanup of radiation contamination related to a Gloucester City Superfund site known as the Welsbach & General Gas Mantle site.
The site, added to the Superfund list in 1996, includes two former gas mantle manufacturing sites along the Delaware River waterfront and numerous residential properties in Gloucester City and Camden.
Radioactive thorium was used to make the mantles glow brighter. Some of the waste from the process contained radioactive elements, and it was used as fill throughout the two cities, according to the EPA.
So far, EPA has removed more than 200,000 cubic yards of contaminated soil and building materials from more than 140 properties in the Gloucester City and Camden areas, including homes, a swim club, a ball field and the site of a future school. It has investigated more than 900 properties.
The U.S. initially sought $25 billion to clean up decades of contamination at dozens of sites. A U.S. bankruptcy judge in New York in December found Kerr-McGee had improperly shifted its environmental liabilities to Tronox and should pay between $5.15 billion and $14.2 billion, plus attorney's fees. Cole said Thursday that the government decided that the $5.15 billion amount was more than enough to cover the damages.