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Silver Lining in a River of Gray

Federal investigation could break cozy relationship between NC regulators and Duke Energy

Good news about the environment is depressingly rare. Just see, for example, the recent coal pollution disasters in the South. In addition to the third largest coal ash spill in US history that happened in North Carolina earlier this month, on January 9 we witnessed the spill of a coal-washing agent into West Virginia's Elk River, and on February 11 a Patriot Coal facility released some 100,000 gallons of coal slurry into Kanawha Creek in West Virginia. Yet sometimes good news can shock you when you least expect it.   

Dan Rivercoal ash spillPhoto by Waterkeeper Alliance/Rick Dove The Dan River coal ash spill, the third largest such spill in US history can be traced to a corroded political system in which money and influence are center stage in the policymaking process.

Last Thursday, I was in the middle of an interview with Frank Holleman, a senior attorney at the Southern Environmental Law Center. This is the organization that has been suing Duke Energy for the past year to clean up its vulnerable coal ash sites. The law center’s effort sought to prevent the very disaster in which 82,000 tons of coal ash and more 24 million gallons of polluted waterspilled into the Dan River on February 2 at Duke Energy’s retired Dan River Steam Station in North Carolina.

I had planned on writing a somber piece for Earth Island Journal about efforts to prevent similar spills from happening again. Additional spills are all-but-inevitable given that there are 13 other sites where Duke’s coal ash is stored in liquid form in unlined lagoons, where only an earthen barrier separates the toxic waste from entering groundwater and waterways. These and many other sites currently leak toxic substances into groundwater every day. Bigger, media-attracting spills are not a matter of if, but when.

The interview took a dramatic turn when, in mid-sentence, Holleman paused and said, “Oh wow. I have to go. I just saw the breaking news that the US Attorney’s Office has subpoenaed the North Carolina Department of Environment and Natural Resources for documents leading up to the spill. This is big. I’ll call you right back once I’ve wrapped my head around this.”

We hung up and I sat there, stunned. Finally, it seems, federal officials are going to examine the all-too-cozy relationship between North Carolina regulators and Duke Energy. It’s too bad, of course, that it would take an environmental disaster to prompt this action. But a federal grand jury investigation provides something of a silver lining amid this river of gray.

For years, the largest public utility in the country, Duke Energy, had been successfully resisting efforts to store its coal ash (a toxic byproduct of the combustion of coal) in safer conditions that can reduce the risk of groundwater contamination and catastrophic spills. Whereas in other states, like neighboring South Carolina, coal companies have agreed to store coal ash in dry form in lined containment pits away from critical water resources, in North Carolina Duke Energy has been getting away with storing the liquid version in unlined pits right next to waterways, even after the 2008 coal ash disaster in Kingston, Tennessee. The Southern Environmental Law Center claimed the unlined pits were a violation of the federal Clean Water Act, and was suing Duke for compliance.

How was Duke Energy able to cling to an outdated waste storage system?  The third largest coal ash spill in US history is not just about a corroded drainage pipe at an unlined coal ash lagoon. The spill can be traced to a corroded political system in which money and influence are center stage in the policymaking process.

As in many states, industry groups have been particularly effective in North Carolina in declawing state regulatory agencies. Governor Pat McCrory, a Republican, was a Duke Energy employee for almost three decades, which is the flipside of the revolving door practice in which 31 out of 37 Duke Energy lobbyists in 2013 had previously held government jobs.  Further, Duke Energy, allied groups, and individuals directly associated with Duke Energy gave more than $1.1 million dollars to McCrory’s two gubernatorial bids. In general, Duke Energy is a big political player (spending around $6 million in lobbying efforts in 2013) and a color-blind campaign contributor (donating money to both Democrats and Republicans). For successful lobbies that can afford to buy both sides, politics isn't seen through the lens of red or blue, but dollar-bill-green.

Although Duke Energy pays a lot to influence elections, it is money well spent. After becoming governor, McCrory quickly appointed Raleigh businessman John Skvarla to head the North Carolina Department of Environment and Natural Resources (DENR). Skvarla immediately changed the tone of the regulatory agency, saying it would “partner” with those industries it regulates, which would now be called “customers.” Skvarla has said the agency is going to be less of “a bureaucratic obstacle of resistance” and more of “a customer-friendly juggernaut.” When Skvarla says “customer,” he does not mean tax-paying, voting citizens, but rather the industries DENR is supposed to regulate.

With anti-regulation Skvarla at the helm of a regulatory agency, DENR became openly antagonistic to the goal of environmental stewardship. Some DENR veterans took exception to the changed direction of DENR. One longtime agency staffer, Amy Adams, resigned in protest and began working for Appalachian Voices, a nonprofit in Boone, NC. After her recent appearances on Democracy Now and The Rachel Maddow Show, Adams told me that there were troubling changes already happening prior to the new administration and that many of the talented folks at DENR had “their knees cut out from under them” due to regulatory constraints, budget cuts, and reorganizations that were coming from the state’s General Assembly. This process accelerated in 2013 when environmental regulations were targeted under Skvarla’s banner of “progress and reform.” According to Adams, regulators weren’t simply asked to “do more with less,” the managers’ mantra in this age of austerity. Instead, they were asked to just “do less.”

So, where was the federal government during all of this? When Frank Holleman at SELC called me back, he explained how his scrappy nonprofit tried to sue Duke Energy to comply with the federal Clean Water Act, and how the new-and-improved DENR was part of the problem. On three separate occasions, at the very last minute possible, DENR interfered with the public interest group’s lawsuits by assuming the role of plaintiff, claiming as a state regulatory agency it would bring Duke to task for violations. Yet every time, according to Holleman, it assessed an insignificant fine in a process that SELC — the original plaintiff — was shut out of. After the lawsuit for the third site, DENR preemptively (and, Holleman says, cynically) “filed suit” against all of the offending 14 coal ash sites, including the Dan River site. But then the agency proceeded to “do absolutely nothing in the intervening six months to try to stop pollution by Duke,” Holleman says. Despite DENR supplanting SELC to sue Duke Energy, “no step was made by DENR to make Duke move the ash.

For environmental groups, it was frustrating enough that the state agency whose purpose is to enforce environmental laws had radically shifted its mission to serve its “customer,” Duke Energy. To make matters worse, the US EPA and other federal agencies sat on the sidelines. Despite “listening attentively,” Holleman says, “the EPA did absolutely nothing to bring Duke Energy into compliance.” Amy Adams at Appalachian Voices also reiterated that the bigger issue is that the EPA and the White House have failed to provide strong federal guidelines about coal ash, creating a situation where states have different (often lacking) standards, and industry can flaunt federal laws. It has seemed that the gargantuan task of enforcing the Clean Water Act and taking on the nation’s largest utility rested solely on the shoulders of private citizens and nonprofit groups.

This is exactly why the news of the federal grand jury is such an important ray of hope, and why my original doom-and-gloom article morphed into an optimistic reflection on how things could get better. The US Attorney’s Office has subpoenaed DENR and Duke Energy for emails and documents from 2010 through the recent spill. Many environmentalists I spoke with were pleasantly shocked by the news of this investigation, but uncertain of where this could lead. But one thing is clear: While Duke Energy attempts to dredge the coal ash sludge at the bottom of the Dan River, the feds are just beginning to dredge through endless emails and documents as part of an “official criminal investigation of a suspected felony.”   

When asked about the implication the recent coal ash spill and subpoena might have on DENR’s enforcement going forward, Jamie Kritzer, a public information officer at DENR, would not speculate. But, in an email response to my inquiry, Kritzer wanted to make clear that DENR Secretary John Skvarla is creating a “multidisciplinary task force” that would be separate from the state’s “ongoing review and decisions regarding appropriate enforcement actions against Duke Energy related to the spill.” This taskforce will assess all coal ash sites in the state “in the coming months” to prevent “any further unpermitted releases of coal ash or ash pond water.” The state agency is also aware that the EPA will be issuing a rule concerning coal ash regulations by December, she said. Kritzer said the agency’s legal actions against Duke represent the “first time in history an administration has filed a lawsuit to address unpermitted discharges from coal ash ponds.”  It remains to be seen whether Skvarla’s task force is simply a PR veneer for business-as-usual, or a new stance. For his part, Governor McCrory has also now made public statements about the need to move coal ash sites away from waterways.

Duke Energy, which would not answer my questions about specific plans to store coal ash in lined ponds away from water sources, has begun cleanup efforts at the Dan River site. The company’s director of environmental and legislative Affairs, George Everett, told lawmakers that it plans to close some of its unlined coal ash ponds. What is unclear, however, is whether the actual coal ash will be moved to lined sites away from waterways and groundwater. We can be certain that the legal team at SELC will continue its legal actions, seeing how the utility has shown its inability to self-regulate.

While the unexpected federal investigation merits cautious optimism, the situation is still precarious. The drinking water for Charlotte and other major cities is still at risk from other coal ash sites that leak toxic contaminants at unacceptable levels and could be the next coal ash spill disaster. DENR is still headed by anti-regulation ideologues, Duke’s political power is still unchecked, and there is still a lot of bureaucratic inertia that must be overcome in both government and industry.

What next? Environmental groups say public pressure is essential to influence lawmakers and Duke’s board and senior management to bring these coal ash sites into compliance with the Clean Water Act, as other coal companies in South Carolina have agreed to do. Former state regulator Adams said that the best thing concerned citizens can do is to write the US EPA requesting a strong ruling on coal ash guidelines. “Utilities do the right thing if there is enough public pressure,” Holleman says.

Bjorn Philip Beer
Bjorn Philip Beer is a writer based in Charlottesville, Virginia, who grew up in North Carolina and attended Georgetown University. Follow him on Twitter @BjornPhilipBeer.

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