Anadarko Petroleum agreed to pay $5.15billion (£3.10billion) to settle a US claim for $25billion to clean up 85 years worth of pollution its Kerr-McGee unit left behind across the country.
The US Justice Department said it represents the largest recovery for environmental cleanup ever. The government said the settlement made sure that the polluters were held responsible, instead of taxpayers.
“Kerr-McGee’s businesses all over this country left significant, lasting environmental damage,” Deputy Attorney General James Cole said.
“It tried to shed its responsibility for this environmental damage and stick the United States taxpayers with the huge cleanup bill.”
Founded in 1929 near Oklahoma City, Kerr-McGee left a toxic legacy that includes uranium mines in Navajo territories in the West and wood-treatment plants that used creosote in Mississippi and Pennsylvania, according to the US Environmental Protection Agency.
The firm spun off its chemicals business and old environmental liabilities as Tronox beginning in 2005. About three months after the transaction was completed, Anadarko offered to buy Kerr-McGee’s oil and natural gas assets for $18billion.
Tronox filed for bankruptcy in 2009 and sued Kerr-McGee over the environmental debt. The US, as Tronox’s largest creditor, intervened on behalf of the EPA.
The US initially sought $25billion to clean up 2,772 sites and compensate about 8,100 claimants.
Watch the announcement of the settlement by Deputy US Attorney General James Cole in full here:
Most of the settlement, $4.4billion, would be used for cleanup of environmental contamination and to settle environmental claims, Cole said. The rest would go to injury claims of people who have come down with cancer, respiratory problems, or other injuries from pollutants, according to court documents.
By comparison, BP agreed to pay $4.5billion in criminal and civil penalties on top of $9.2billion worth of private party lawsuits for the April 2010 Deepwater Horizon disaster, the worst offshore oil spill in American history.
Anadarko, based in the Woodlands, Texas, had said in court papers in January that the judgment could be as high as $4billion. It increased that estimate to $5.15billion in a February 28 filing with financial regulators.
The settlement “eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities and tort claims,” Anadarko Chairman and Chief Executive Officer Al Walker said in a statement.