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Thousands of Violations at Coal-Focused Alpha Lead to Historic Settlement

Alpha Natural Resources Inc., one of the nation's largest coal companies, agreed with the federal government on Wednesday to pay the largest civil penalty ever recorded under the Clean Water Act for more than 6,000 violations committed between 2006 and 2013.

Under a consent decree reached with the Environmental Protection Agency (EPA) and the Department of Justice (DOJ), Alpha and 66 of its subsidiaries have agreed to pay $27.5 million in penalties for repeatedly discharging pollutants into hundreds of rivers in five states and routinely violating state-issued permits.

The agreement also will find the company and its subsidiaries paying $200 million to install and operate wastewater treatment systems to mitigate the discharge of pollutants that included aluminum, manganese, selenium and suspended solids, among others.

The settlement covers 79 active coal mines and 25 processing plants in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia.

The penalties come at a time when the U.S. coal industry faces an uphill battle with other sources of energy, in particular natural gas. This month, the Energy Information Administration said domestic natural gas production reached a record 30.17 Tcf last year, pushed higher by a surge in onshore horizontal drilling that shows no signs of abating (see Daily GPI, March 3).

While demand for coal overseas is expected to remain stable and grow at a modest rate of 2.3% per year through 2013, according to the International Energy Agency, coal's future in U.S. power generation is dim.

Weak U.S. electricity demand, competitive prices for natural gas, renewable fuels and a push to implement tougher environmental regulations are expected to diminish coal's role in the country's energy portfolio in the coming decades (see Daily GPI, Feb. 14).

The federal government also will require Alpha and its subsidiaries to maintain a database to help track violations and compliance efforts. Alpha said on Wednesday that some of the measures included in its consent decree have already been implemented, including the expansion of its audit program and an enhanced tracking database.

The federal government will receive half of the civil penalty and the rest will be divided among West Virginia, Pennsylvania and Kentucky, where most of the violations occurred.

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