Citizens Groups, State Reach Historic Settlement with Coal Company Over Water Pollution

FRANKFORT - A coalition of citizens groups entered a settlement late last night with Frasure Creek Mining and the Kentucky Energy and Environment Cabinet that resolves years of Clean Water Act violations numbering in the thousands at the company’s surface coal mines in eastern Kentucky. The violations include duplicated water pollution monitoring reports, failure to report pollution, and exceedences of pollution permit limits.

The settlement comes as the newly elected Bevin administration is taking office, setting a critical benchmark for the new Secretary of Energy and Environment.

The settlement includes a $6 million fine – the highest ever entered by Kentucky against a coal company for environmental violations. In the settlement, Frasure Creek admits to the violations and agrees to immediately pay $500,000. If the company defaults on payment, it will be liable for the full $6 million fine. In addition, if Frasure Creek, which is currently not mining in the state, or its owners want to resume mining, they must pay $2.75 million before a permit application will be processed.

“This settlement should send a strong signal to the new administration that citizens can and will hold the state accountable for vigorously enforcing laws against polluters to ensure the health of our waters and communities,” said Erin Savage, Central Appalachian Campaign Coordinator for Appalachian Voices.

“This settlement comes after a half decade of effort and a precedent-setting decision from the Kentucky Supreme Court affirming the importance of citizen intervention. It’s the product of the Energy and Environment Cabinet working with citizens to bring this outlaw company into compliance. We the citizens will remain vigilant to ensure that the laws are enforced and the people of the Commonwealth are protected,” said Ted Withrow with Kentuckians For The Commonwealth.

“Frasure Creek’s history of egregious violations spans nearly a decade now,” said Pete Harrison, an attorney for Waterkeeper Alliance. “Kentucky shouldn’t tolerate chronic lawbreakers like this, and under our settlement, Frasure Creek must stay out of the coal business in Kentucky. Unless the company's owners prove they’re willing to take responsibility for the damage they’ve done by paying millions of dollars in additional fines, they won’t be allowed to come back,” Harrison added.

“As the coal industry declines in eastern Kentucky, it’s extremely important that the pollution problems caused by irresponsible companies are addressed before those companies leave and saddle the state and Kentucky citizens with the burden of cleaning up their mess”, said Alice Howell, Cumberland Chapter Sierra Club Mining Committee Co-chair.

The violations occurred at Frasure Creek mountaintop removal mines in Floyd, Magoffin, Perry, and Pike counties in Eastern Kentucky. Frasure Creek is owned by Essar Group, a multinational corporation based in India.

Appalachian Voices first discovered that Frasure Creek was duplicating water pollution reports in 2010. In response to the citizens groups’ subsequent notice of intent to sue, the cabinet proceeded with enforcement action. The groups, believing the state’s enforcement was too lenient, sought to intervene. Ultimately, the state Supreme Court affirmed for the first time ever the importance of citizen intervention in Clean Water Act cases in Kentucky.

In 2014, the groups discovered that, once again, Frasure Creek was duplicating or otherwise falsifying water pollution reports. Almost half of the company’s data submitted for the first quarter of 2014 was copied from previous reports. In November 2014, the groups filed a notice of intent to sue over the new violations. The cabinet then filed an enforcement action against Frasure Creek, which the citizens groups joined.

“It takes all of us as citizens to protect our water and air for our children’s children from the abuse and robbery of polluters. That is what this is all about, that is why this is so important,” said Pat Banks, Kentucky Riverkeeper.

The administrative order filed yesterday resolves the cabinet’s case against the mining company. The citizens groups had also sued Frasure Creek in federal court over the same violations, and will soon file a consent judgment with the court that incorporates the terms of the order.  

The citizens groups – Appalachian Voices, Kentuckians For The Commonwealth, Kentucky Riverkeeper, Sierra Club, and Waterkeeper Alliance – are represented by Mary Cromer of Appalachian Citizens Law Center, Lauren Waterworth of Waterworth Law Office, PLLC, and the Pace Law School Environmental Litigation Clinic.