Federal judge accepts chemical company’s $103M settlement with EPA for Kalamazoo River cleanup

Judge OKs $103M Kalamazoo River cleanup settlement

A federal bankruptcy judge approved a deal with the government on Friday that requires Lyondell Chemical Co. to pay $103 million toward the cleanup of a polluted 80-mile section of the Kalamazoo River in southwest Michigan. That’s far less than officials had sought.

The settlement is part of a broader arrangement as Houston-based Lyondell, working to emerge from Chapter 11 bankruptcy reorganization, spends $250 million to help fund cleanups of 15 hazardous properties around the nation.

Among them is the Kalamazoo River, which was tainted for decades with industrial waste from paper mills and other manufacturing plants.

Robert Gerber, a federal bankruptcy judge in New York, approved the settlement. Democratic Sens. Carl Levin and Debbie Stabenow of Michigan and Rep. Fred Upton, a Republican whose district includes part of the contaminated area, said earlier this week the deal lets Lyondell off too easily.

“I am disappointed that Lyondell is being reorganized in such a way that allows them to walk away from the bulk of their cleanup responsibilities,” Levin said Friday, adding that he’ll keep pushing for a “total cleanup.”

Upton said he was disappointed because “it appears the many voices of concerned families in Kalamazoo were ignored.” He said the community is determined to have it done right.

Government agencies had been seeking up to $1 billion from Lyondell, a subsidiary of the Netherlands-based LyondellBasell, the world’s third-largest independent chemical company.

Lyondell spokesman David Harpole said the deal was fair.

“It was negotiated over the course of many months with federal and state authorities and balances the priorities of environmental law with bankruptcy law,” Harpole said. It creates a pool of cleanup money that otherwise would not exist, he said.

The U.S. attorney’s office for the Southern District of New York, which represented the government, declined to comment.

An 80-mile segment of the Kalamazoo River and five miles of a tributary, Portage Creek, were placed on the federal Superfund list of high-priority hazardous waste sites in 1990. The Kalamazoo site also includes four landfills and several defunct paper mills.

Millennium Holdings LLC, a Lyondell subsidiary, has acknowledged fouling the river with toxic polychlorinated biphenyls, or PCBs — chemical compounds believed to cause cancer.

The Environmental Protection Agency also has named Georgia-Pacific Corp. as a responsible party and is looking for others, spokesman Mick Hans said. Under the Superfund law, the government covers cleanup costs when the polluters cannot be found.

Georgia-Pacific agreed last year to fund a $13 million cleanup project that includes capping a 32-acre landfill, groundwater monitoring and repairing shoreline habitat and wetlands.

Under the deal approved Friday, Lyondell will pay about $53 million to a trust fund for work at the former Allied Paper Mill, which includes a landfill on Portage Creek loaded with PCBs. An additional $49.5 million will pay other costs in the Superfund zone.

Federal prosecutors said the settlement resolves all claims against the company for the Kalamazoo pollution.