Bloomberg News

Coal-Ash Disaster Lingers in Tennessee as Regulation Fight Rages

November 03, 2011

Nov. 3 (Bloomberg) -- Holly Schean didn’t know what was on the other side of the hill near her parents’ home in Kingston, Tennessee. At 1 a.m. on Dec. 22, 2008, she found out. The earth split and toxic coal ash surged across a finger of the Emory River.

The 5.4-million-cubic-yard torrent from a slurry-filled pond owned by the Tennessee Valley Authority deposited the splintered house 10 yards from its foundation. It relocated a road and a rail line, choked waterways and created a moonscape of mounds residents dubbed “ashbergs.”

The hill “was real pretty,” said Schean, 28. “You never dreamed it was coal-ash pond. You never dreamed it would cause so much madness.”

The disaster prompted President Barack Obama to propose rules for the nation’s 678 such ponds -- impoundments holding smokestack ash and water. Now, his coal-ash push is a symbol in the Republican campaign against what the party calls job-killing regulations as presidential candidates challenge the reach of government. The coal-ash regulation is one of six rules under consideration that the administration has said would cost industry more than $1 billion.

King Spill

The U.S. had other such spills in the past decade, in Georgia and Pennsylvania, and on Oct. 31 the wall of a Wisconsin coal-ash landfill collapsed into Lake Michigan. The Kingston accident, which will cost the TVA $1.2 billion to clean up, dwarfed them. The amount unleashed was enough to cover nearly 850 football fields to a depth of three feet -- including end zones.

Last year, the administration proposed two possible rules for coal ash. The power industry supports one, environmentalists the other.

The first would let states regulate the substance, which contains toxins such as mercury and arsenic, as a nonhazardous solid waste. The second would classify it as hazardous and put the U.S. Environmental Protection Agency in charge.

Scott Segal, a power-industry lobbyist with the Bracewell & Giuliani law firm in Washington, said environmentalists and the EPA are exploiting the Kingston disaster.

“They couldn’t get a climate-change bill passed, so they want to diminish the coal industry in an extralegal way,” he said. “The way they do that is by changing its cost structure.”

Costs Without Benefit

While the Tennessee spill was “unacceptable,” the ash should be treated as nonhazardous waste, said Pat Hemlepp, a spokesman for Ohio-based American Electric Power, the largest U.S. coal user. That would protect the public “without causing unnecessary costs in an already struggling economy,” he said.

Calling it hazardous waste, Hemlepp said, would “simply raise the cost of electricity.”

One estimate by the industry’s Edison Electric Institute in Washington estimated that regulating ash as hazardous would cost between $1.7 billion and $5 billion per year over 20 years -- figures environmental advocates call hyperbole.

The EPA says power companies would pay $1.5 billion per year to handle it as hazardous waste, compared with $587 million if the states enforce rules for nonhazardous substances.

Assuming Inaction

That option is so much cheaper, said Lisa Evans, a lawyer with the Oakland, California, environmental group Earthjustice, because the EPA assumes that many states will do nothing.

In any case, both rules are in limbo: EPA Director Lisa Jackson has said the agency will make no decision until at least 2012.

House Republicans, meanwhile, passed a bill on Oct. 14 that would block the EPA from regulating coal ash, and let states set their own standards. The bill is now in the Democratic-controlled Senate.

“The Republicans and the industry, with the Tea Party fever, are trying to link the economic downturn to overregulation of the environment, instead of underregulation of the banks,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy in Knoxville, 38 miles from Kingston. “It’s an amazing sleight of hand.”

Silent Threat

In Kingston, what remains is anger, depressed real-estate sales and litigation, some of the town’s about 5,300 residents said this month. They say they never knew the hill was ash.

“It just looked like a hill,” said Leslie Henderson, president and CEO of the Roane Alliance, the region’s chamber of commerce. “It’s been a huge surprise.”

The pond had been collecting waste for more than 50 years, storing it in a gradually drying slurry, the industry’s preferred disposal method.

Dry storage, recommended by environmentalists, costs more, according to advocates on both sides. It requires the ash to be trucked to a lined landfill, Evans said.

Conservation groups say the Kingston spill is a perfect example of one risk of wet storage -- a catastrophic breach. They also say toxins leach into groundwater because ponds are typically unlined.

Tighter air-pollution rules have made the ash more toxic than in the 1980s, when Congress exempted it from solid-waste regulation, Smith said. What he called “a periodic table of things we know aren’t good for human health” -- now end up in the ash instead of the air, he said.

Ash Smear

Segal, the power-industry lobbyist, called it a “high volume, low-toxicity waste” so benign that its particles can be used in concrete, roofing and wallboard. That recycling would die off if the ash was regulated as a hazardous waste, Segal said.

That argument outrages Steve Scarborough, a retired kayak factory owner who owns property along the Emory River near the spill.

“They talk about the stigma it would put on coal ash if they called it hazardous,” he said. “Well, we got a stigma put on us.”

After the spill, Kingston’s shock turned first to relief that no one died, and then the mood curdled, said Henderson of the Roane Alliance.

“It took a year and a half before people began to get over it,” she said. “A lot of the TVA employees felt very uncomfortable. They faced hostility even in the grocery lines.”

A 2009 TVA report blamed the spill on a freak confluence of four factors, one unique to the site. It put no blame on management.

Written to Order

The agency’s independent inspector general countered with a report saying TVA tailored its investigation to match its litigation needs and drew “fortuitous” conclusions.

The report described lax inspections, poor training and failure to follow plans. Engineers warned the TVA of safety concerns as early as the 1980s, according to the report.

The town now awaits a verdict on a lawsuit against the TVA that involves more than 500 plaintiffs. Other lawsuits seek redress for damage to a real-estate market that relied on luring retirees to Kingston’s waterways.

“My sales went from 115 a year before the spill to 15 this year,” said plaintiff Levi Giltnane, a co-owner of Sail Away Homes and Land. “It killed my livelihood.”

Bought Out

The TVA worked to appease residents. It bought 150 properties, including the Schean home. The settlement required signed waivers of any medical claims, Holly Schean said.

The EPA-supervised cleanup filled hotels and restaurants with contractors. The TVA expects to restore the area to “as good as or better than it was before the spill,” said Barbara Martocci, a spokeswoman.

From the air, stored ash still covers an area nearly twice the size of the power plant itself. The Emory River is clear; only a portion of one inlet is still gray-white with waste.

The ash is going to a landfill in Perry County, Alabama, where 31 percent of the population lives in poverty, according to the U.S. Census.

Paying the County

After the accident, the TVA board voted to replace its six ash ponds -- including the one at Kingston, three others in Tennessee, and one each in Kentucky and Alabama -- with dry storage. The authority, whose revenue was $11 billion last year, will spend $1.5 billion over 10 years doing that, Martocci said.

The agency also gave Roane County $42 million to spend as it wished. The money is going to schools, said Henderson, of the chamber of commerce.

Henderson thinks hazardous-waste regulation isn’t necessary: The label would harm a new effort to market the region as green, she said.

Kingston Mayor Troy Beets said “ambulance chasing” lawyers exaggerate the dangers. He said he wiped coal ash off his car every morning in the 1960s, and suffered no harm: “People in this town do not buy these outsiders coming in here telling us we were all going to die.”

Others, including Schean, Giltnane and Sarah McCoin, who raises horses a mile from the spill site, said federal regulation is critical.

The TVA “is a huge employer” and has too much clout, McCoin said. “It won’t happen if it’s only the state.”

To Schean, it’s common sense: “Any time you have something like that next to a residential neighborhood, it should be regulated to protect people’s safety, instead of just business interests.”

--With assistance from Stephen Merelman in New York. Editors: Stephen Merelman, Timothy Franklin

-0- Nov/03/2011 16:18 GMT

To contact the reporter on this story: Margaret Newkirk in Atlanta at mnewkirk@bloomberg.net

To contact the editor responsible for this story: Timothy Franklin at tfranklin14@bloomberg.net


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