Major settlement to be used for New Jersey contamination cleanup

February 6, 2015

Last month Anadarko Petroleum Corp. paid a record $5.15 billion to the United States government and others, after reaching a settlement agreement in a fraudulent conveyance case. The recovery is the largest ever obtained  from an environmental enforcement claim by the Department of Justice. Anadarko Petroleum Corp., along with the subsidiaries it acquired when it bought Kerr-McGee Corp., were accused of fraudulently moving assets to escape liability for contamination at Superfund sites around the country.

Kerr-McGee was founded in 1929 and operated a number of businesses across the nation, such as wood-treating, uranium mining and processing, thorium processing and ammonium perchlorate manufacturing. Most of these operations  ceased by the early 2000s, converting to oil and gas businesses, but Kerr-McGee remained responsible for the environmental liabilities associated with its actions. 

In 2001 Kerr-McGee found that the environmental issues would damage its oil and gas exploration and production work, and decided to separate the new assets from legacy liabilities. Oil and gas holdings were transferred to a "new" Kerr-McGee while the business with 85-year-old legacy costs was renamed Tronox. Anadarko purchased Kerr-McGee in 2006. A few years later Tronox filed for bankruptcy.

Out of the $5.15 billion, $4.4 billion will be used to fund environmental cleanups. EPA Regional Administrator Judith A. Enck addressed the win, saying, "This legal achievement in bankruptcy court is good for New Jersey and reminds others not to shirk their responsibility for environmental cleanups. The $438 million portion of this settlement for two contaminated sites in New Jersey will allow EPA to continue its work to protect public health and the environment."

Environmental consultants can help companies comply with federal regulations to avoid unnecessary litigation in the future.