Bankrupt W.R. Grace Puts $32 Million Into Superfund Cleanup

The federal government determined that W.R. Grace contributed to the contamination at these 32 sites.

The action settles a bankruptcy claim brought by the federal government to recover money for Superfund site cleanup. Superfund is the federal program that investigates and cleans up the most complex uncontrolled or abandoned hazardous waste sites in the country.

With corporate headquarters in Columbia, Maryland, and employees in 40 countries, the company manufactures construction chemicals, building materials and chemical additives, catalysts used by petroleum refineries, and chemicals used in ink jet paper, paints, toothpastes, rubber compounds, insulated glass, as well as in edible oil refining.

One of the 32 sites covered in the settlement is the R&H Oil Company site, an inactive refinery and gasoline blending facility in a densely populated area of San Antonio, Texas.

Several spills and other releases of petroleum waste during operations have resulted in the contamination of shallow ground water beneath the facility and threaten nearby municipal drinking water wells used by the city of San Antonio.

The Casmalia Resources Superfund site in California (Photo courtesy EPA)

Another of the contaminated sites is surrounded by cattle grazing land in Santa Barbara County, California. From 1973 to 1989, the Casmalia Resources Hazardous Waste Management Facility on this site accepted more than 4.5 billion pounds of industrial and commercial wastes. The wastes included pesticides, solvents, acids, metals, caustics, cyanide, and non-liquid polychlorinated biphenyls.

The owners/operators stopped accepting waste at the facility in 1989, and abandoned efforts to properly close and clean up the site in the early 1990s.

The accumulation of problems proved too much for the financial resources of W.R. Grace and 61 affiliated companies. They filed for bankruptcy in April 2001, but the federal government did not give up its efforts to recover some money for cleanup of the contaminated sites.

"Bankruptcy is not a safe haven to avoid environmental responsibilities," said Catherine McCabe, principal deputy assistant administrator for the U.S. Environmental Protection Agency's Office of Enforcement and Compliance Assurance. "EPA will keep pursuing companies who pollute the environment."

In March 2003, the EPA filed claims against the company to recover past and future cleanup costs.

The $34 million settlement will be used to reimburse EPA for past costs and to pay for future costs associated with cleaning up at hazardous waste sites in 18 states.

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.

Upon approval of the bankruptcy court, EPA will have an allowed claim in Grace's bankruptcy. Grace's plan of reorganization will determine the extent to which allowed claims will be paid.

This settlement agreement does not resolve environmental claims related to the cleanup of the Libby Asbestos Site in Libby, Montana, and the Curtis Bay Site near Baltimore. These claims are still pending.

"This settlement will make money available to substantially help the cleanup of many Superfund sites around the country," said Ronald Tenpas, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "This settlement is a good outcome for both the taxpayers and the environment."

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