Source: http://archive.pnj.com, July 4, 2015
By: Jeff Montgomery and Jeff Mordock
Lisa J. Riggiola wasn’t among those cheering DuPont’s official spinoff of the Chemours chemical company this week.
Riggiola, a Pompton Lakes, N.J., resident who grew up in the borough and served on its council, worries Chemours could be crippled by the weight of nationwide pollution cleanup bills the company carried away from DuPont’s remaining enterprises. Those expenses, she said, might weaken Chemours’ ability to follow through on a more-than-500-acre cleanup at a former DuPont explosives plant in her community.
“To me, it’s a sad day because I don’t know what’s going to happen,” said Riggiola, a member of a community advisory group. The organization recently asked federal officials to investigate the new company’s ability to meet its obligations for cleaning up mercury, lead and other pollutants in soil, lake sediments and groundwater, including toxic solvent vapors surfacing under hundreds of homes.
Chemours this week completed its spinoff from DuPont and launched as an independent, publicly traded company, with headquarters in Wilmington.
At spots around Delaware, New Jersey and across the country, Chemours is now tied to 190 current or potential DuPont legacy cleanup sites under various programs.
Company legal disclosures estimated the cleanup liability at $295 million, with a possibility of topping $1 billion. Thousands of toxic-exposure, asbestos and contamination claims also are working through court systems nationwide, with a large number focused on water-supply contamination in West Virginia and Ohio.
Company officials have said they are confident the obligations will be covered, although Pompton Lakes, a former explosives plant, was identified as the lone site where expenses might have a “material” effect on company liquidity for a period, but not its overall financial position.
“These are well-characterized liabilities,” said Marc Vergnano, a former DuPont executive vice president and Chemours’ first CEO. “DuPont managed the environmental liabilities extremely well, and I am confident we will continue to do that.”
Dave Carter, president of Delaware Audubon, said that Delaware has good examples of reasons to watch closely, including the $100 million-plus, taxpayer-financed cleanup of the former Standard Chlorine/Metachem Products Superfund site near Delaware City.
The Standard-Metachem property once ranked as one of the world’s largest producers of chlorinated benzene ingredients for herbicides, pesticides and pharmaceuticals. In 2002, however, after years of company cleanup promises to federal and state regulators, its owners declared bankruptcy and walked away from millions of pounds of chemicals, more than $60 million in debts and acres of deeply contaminated land, leaving the expense to the public.
The most hazardous Standard-Metachem areas, EPA officials acknowledge, might remain under protective controls for a century or more.
“I think reorganizing companies and moving them around should not be a way to get out of liabilities for the damage they’ve caused,” Carter said.
Bill Wolfe, a former New Jersey Department of Environmental Protection regulator who now works as an environmental watchdog, speculated that DuPont’s Chemours spinoff might have been one of the spurs for a recently announced EPA look at the wider issue of company ability to pay cleanup bills.
Federal officials said they would also try to determine if “financial assurance” checks account for the full range of company liabilities.
“Even if it doesn’t have anything directly to do with the (Chemours) spinoff and us shining a light on it, it’s important,” said Wolfe, who now directs New Jersey’s Public Employees for Environmental Responsibility office.
“There’s a huge potential liability. Industry has been very adept at keeping it under the public radar,” Wolfe said. “The investors are on the hook, though. At some point, either through litigation or regulation, they’re going to have to pony up.”
The EPA has good reason to watch spinoffs involving big companies with big pollution liabilities, Wolfe said. Last year, the federal government reached a multibillion-dollar settlement with Kerr-McGee over a complex company breakup that left one of the resulting corporations unable to meet massive cleanup obligations.
Of 37 sites worldwide, the new Chemours company would have only two production locations in Delaware.
Its largest and oldest titanium dioxide plant, at Edge Moor in Wilmington, already is under corrective action oversight and studies because of hazardous-waste management concerns.
Chemours also would take on the Chambers Works fluoroproducts plant in Deepwater, N.J., at the foot of the Delaware Memorial Bridge, and operations in Elkton, Md.