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Grace to pay $250 million for Libby asbestos contamination

by Carol Holoboff Western News
| March 14, 2008 12:00 AM

What is being called the largest payment ever ordered under the federal Superfund program, W.R. Grace has agreed to pay $250 million to reimburse the federal government for the costs of investigation and cleanup of asbestos contamination in Libby.

On Tuesday, March 11, the U.S. Justice Department and Environmental Protection Agency (EPA) announced the settlement, which is subject to the approval of a federal judge overseeing the company's bankruptcy proceedings.

The action settles a bankruptcy claim brought by the federal government to recover money for past and future costs of cleanup of contaminated schools, homes and businesses in Libby.

In a press release on Tuesday, Montana's senior U. S. Sen. Max Baucus said, “$250 million is a drop in the bucket compared to the destruction and pain our neighbors in Libby have been through. EPA has spent approximately $120 million on Libby already and they still can't tell us how clean is clean.”

Sen. Jon Tester expressed similar sentiments.

“Cleaning up the mess and taking care of Montanans poisoned by W. R. Grace will take years of hard work,” Tester said.

In 2003, a federal court in Montana ordered W. R. Grace to pay the EPA $54 million for investigation and cleanup costs that had incurred through December 2003. That award has not been paid due to W. R. Grace's pending bankruptcy. Tuesday's settlement will resolve that 2003 settlement and cleanup costs incurred since that date.

EPA's intent is to place the settlement in a special account within the Superfund that will be used to finance future cleanup. Of the settlement, $11 million will be set aside for the Operations & Maintenance Budget (OMB). EPA projects interest earned would bring that to $30 million by the year 2017.

The settlement requires W. R. Grace to pay the $250 million within 30 days of bankruptcy court approval.

The settlement agreement will be lodged in the U.S. Bankruptcy court for the District of Delaware and is subject to court approval after a 30 day public comment period. A copy of the settlement agreement is available on the Justice Department Web site at .

Some of the areas of concern involve how much of the settlement funds will be needed for OMB, that time into the indefinite future when EPA has left Libby on its own to take care of unknowns and unexpected incidents such as the hole in the cement block at Asa Wood Elementary School in February. Can Libby be certain that the settlement money will be locked in for their use only? What does resolving the past due $54 million and the cleanup costs incurred since Dec. 31, 2001 do to the $250 million? If the EPA cleanup budget continues at $17 million per year until 2017 does that mean $153 million will be spent or can will larger cleanup budgets be expected because of the settlement? Will EPA pay for their studies with the settlement money? Is $250 million really only a drop in the bucket as Baucus said?

Libby Area Technical Assistance Group's (LATAG) purpose is ensure that the people who lives are affected by asbestos containing vermiculite have a say in actions to cleanup that abandoned hazard. At 7 p.m. on Tuesday, March 18 at the Lincoln County campus of the Flathead Valley Community College in Libby, LATAG will be holding a special meeting to hear the public's concerns and comments about the settlement and to assist in the delivery of those comments to the proper authorities within the 30 days open for public comment