Largest Environmental Settlement Means Cleanup Of Former Kerr-McGee Sites

Anadarko Petroleum has agreed to pay $5.15 billion to settle a lawsuit over the environmental legacy of the former Kerr-McGee Corp., which it acquired in 2006. Some $4.4 billion will go toward environmental cleanup at thousands of former Kerr-McGee mines and manufacturing plants across the U.S.; the remaining $750 million will pay for health claims and legal fees.

The settlement, announced by the Department of Justice earlier this month, marks the largest-ever payment made to clean up environmental contamination.

“Kerr-McGee’s businesses all over this country left significant, lasting environmental damage in their wake,” Deputy Attorney General James M. Cole says.

Kerr-McGee for 85 years operated a wide range of energy and chemical businesses that left behind pollution. For example, its Cimarron Fuel Fabrication Site in Oklahoma, which produced nuclear fuel, was famously portrayed in the movie “Silkwood.”

The Department of Justice, along with several states, Indian tribes, and individuals, alleged that the company tried to illegally shed its cleanup responsibilities by spinning off its damaged sites. Starting in 2002, Kerr-McGee shunted those operations to Tronox, which eventually went bankrupt. The profitable oil and gas production and exploration portion of Kerr-McGee was bought by Anadarko in 2006.

Under the settlement, the largest payments will go to clean up a former wood treatment facility in Columbus, Miss., Lake Mead contamination in Nevada, and uranium mines in Arizona.

This settlement agreement “eliminates the uncertainty this dispute has created,” Anadarko President R. A. (Al) Walker explains. “The proceeds will fund the remediation and cleanup of the legacy environmental liabilities and tort claims.”