(07/21/2002)

Photo by Chris Dorst
The Charleston Gazette

It was another "act of god" as legislators left Charleston after failing to increase the weight limits on coal trucks to 120,000 pounds. Up to three inches of rain fell on Logan County and vicinity, causing a Massey Coal Company sediment dam to partially collapse, sending a ten foot wall of water down Winding Shoals Hollow.

It caused horrific recall, shades of Buffalo Creek 30 years ago.

The company, barely rebounding from one of the greatest sludge spills in history just across the Kentucky border, had been warned about problems with the impoundment.

Some DEP officials said the problem this week resulted from "valley fill," where earthen refuse is pushed over the hill from mountaintop removal, filling creekbeds.

Don Blankenship, CEO of Massey, announced the company will be moving their operations to eastern Kentucky, expressing anger toward Gov. Bob Wise for not getting the higher weight coal truck bill through the legislature.

Blankenship was testifying in a court case in Boone County. The bankrupt Harman Mining is suing Massey for $30 million in damages, claiming the giant corporation took them.

Many West Virginia historians claim the state has sold its soul to King Coal, but Blankenship, who is reportedly earning up to $15 million annually as CEO, says "We're unable to invest in West Virginia."

However, Massey's holdings of 2.1 billion tons in coal reserves are still in West Virginia, reportedly 82% of their total holdings.


Photo by Chris Dorst

The Charleston Gazette gave the following in-depth stories yesterday:

Scary Time In The Hollow - Mine Pond Overflows In Logan

Saturday July 20, 2002

By Greg Stone
Staff Writer
The Charleston Gazette

LYBURN — Seven cinderblocks couldn't raise the mobile home high enough. The black water raged 10 feet high against the windows.

"We just grabbed each other and ran to the back," said Lisa Dowden, 38, recalling the way she and her daughter fought a wall of water that topped over a Massey Energy Co. sediment pond and crashed down Winding Shoals Hollow.

Dowden and her daughter couldn't get the back door of their home open. Until the windows broke.

"The entertainment center, the refrigerator, everything was coming at us," Dowden said. Water gushing through the house broke the pressure on the back door, allowing the Dowdens to escape.

When the fury had ceased, Lisa and Mark Dowden had lost their home, as did her father-in-law Clifford, next door. Clifford, his wife and a young relative retreated to a bedroom as the water first buckled the walls of the house, then whooshed in. Water luckily did not top the bed. They escaped once the water subsided.

No one was injured in the hollow, located between Logan and Man on W.Va. 10.

Clifford Dowden sat visibly distraught, chain smoking, for hours after the 8:30 a.m. incident.

"Yeah, I get pretty angry when you lose everything you own and know Massey Coal Co. is to blame," Clifford, 66, said.

Lisa Dowden videotaped the aftermath of the disaster. The horrific morning had taken its toll on her, too.

"I really thought we were going to die, Mark," she told her husband, a deep coal miner at another site. Mark rushed from his underground post when he heard the news.

Massey's Bandmill Coal Corp. had been reclaiming the mountaintop removal mine site. Pittston Coal formerly owned the mine. Department of Environmental Protection records show that Bandmill had been cited for not keeping its sediment ponds dredged, including the one that overflowed.

Friday's accident happened about 15 minutes north of Logan County's Buffalo Creek, where 125 people died in a 1972 flood. That flood happened when a coal impoundment dam broke, sending water down the hollow.

Though Friday's results weren't in any way as tragic, residents said they had complained about the pond.

Resident Ruby Caldwell, 48, said she called DEP in May, after the pond overtopped and sent water running down the road in front of her house.

"They were supposed to get back to us and we never heard from them," she said. "I've lived here all my life and it's never done this."

Friday's incident damaged at least five other houses, destroyed 10 vehicles and left the small community looking like some form of futuristic devastation.

DEP Secretary Michael Callaghan said he believes that "valley fill" material created by the mountaintop's removal became loose, crashed into the pond and sent water cascading over the pond's borders and an earthen dam, much like dropping a big rock into a bucket of water.

He said the other possibility is that the "toe" or base of the fill buckled and tumbled into the pond.

Callaghan pointed to helicopters circling the scene. He said they were state engineers trying to determine the stability of the pond and dam.

As an extra safety measure, he said he might order that rocks be placed at a point in the milelong hollow, to help break the force of any potential overflow.

The secretary said he did not know if Massey would be cited further.

"I came rushing down here this morning," Callaghan said. "I don't want to cast blame on anyone yet. My concern is for the safety of these people."

Gov. Bob Wise toured the Lyburn site Friday and the Low Gap area of Boone County, where dozens of people were evacuated after heavy rainfall. No injuries were reported there either.

Wise said his immediate concern is for families affected by Friday's events. He said his administration would be working with Massey to address safety issues.

Massey's safety coordinator, Frank Foster, said the company had offered hotel rooms, rental cars and food to residents of the hollow. Foster, however, declined to say just what happened. "It's still under investigation," he said.

As Foster spoke at about 3:10 p.m., air hung heavy and muggy. Mud covered everything. Rocks littered the scene.

Water continued to cascade off the mountain, past large boulders closer to the summit. Someone in a backhoe continued to clear the underpass under W.Va. 10.

A culvert is supposed to carry water from the pond off the mountain, down the hollow, under the highway and into the Guyandotte River. Friday morning's catastrophe shredded the culvert and ripped a 10-foot wide ditch along the road.

Vehicles were tossed on their sides or noses Friday, or simply washed down the hollow. One shot through the narrow underpass, ending up in the Guyandotte. Others stacked up crazily at the opening.

Residents say they fear what might happen to a series of other Massey-owned sediment ponds that ring the ridge above them.

One Massey worker, attempting to make arrangements after the accident, asked Mark Dowden if he lived in the hollow.

"I used to," he replied.

Site Has A History Of Pond Violations - No Blame Assigned Until DEP Investigates

Saturday July 20, 2002

By Ken Ward Jr.
Staff Writer
The Charleston Gazette

In mid-May, state inspectors cited a Massey Energy operation in Logan County for not cleaning out a sediment pond at the foot of a valley fill.

Massey took more than two weeks to fix the problem. And by then, the operation had allowed a second pond to fill more than the allowable 60 percent capacity, according to state records.

After the second violation on May 29, state Department of Environmental Protection officials could have shut down the operation. They didn't.

On Friday morning, after a three-hour storm, the sediment pond at Massey subsidiary Bandmill Coal Corp. overflowed.

Water poured down the hollow toward Lyburn, between Logan and Man, flooding the community and damaging homes.

"It basically washed the whole hollow out," said John Scott, a permit supervisor with the DEP field office in Logan.

No one was injured and all residents were accounted for, said Ted Sparks, supervisor of the Logan County 911 Center.

DEP Secretary Michael Callaghan and mining director Matt Crum hurried to the flood site Friday morning to assist with the investigation and cleanup.

Callaghan said the pond filled with material from the valley fill and sent water rushing down the hollow. He declined to assign blame for the situation until it could be further investigated.

At the Lyburn site, Bandmill operates a 1,600-acre mountaintop removal mine called Tower Mountain. The operation is along Winding Shoals Branch of the Guyandotte River, near Rum Creek.

In 2000, the mine produced 870,000 tons of coal. It employed 25 workers, according to the state Office of Miners' Health, Safety and Training.

Callaghan told The Associated Press that Bandmill is not currently producing coal on the permit where the pond that overflowed Friday is located. Instead, he said, the company is reclaiming the site.

Overall, Bandmill holds eight permits in the area for several surface mines, a preparation plant and associated facilities.

Since September 1998, the company has been fined nearly $73,000 for 56 separate environmental violations, according to DEP computer records.

The operations under the Tower Mountain permit have been fined nearly $34,000 since January 1999, according to the DEP records.

Tower Mountain was cited six times for sediment control violations and three times for exceeding water pollution limits, the records show.

In July 2000, DEP inspectors said the operation had "failed to protect off-site areas from damage from surface mining operations." They ordered the company to repair erosion between two sediment ponds, including the one involved in Friday's flood.

In August 2000, state inspectors again found that the company did not protect off-site areas from damage. This time, they ordered Bandmill to repair erosion at the base of another pond in Dehue Hollow, on the right fork of Rum Creek.

In September 2001, Bandmill was cited for improper construction, maintenance and use of sediment control structures. DEP said the company did not "minimize adverse hydrologic impact in the permit and adjacent areas."

In the last two years, Bandmill has been cited three times for not cleaning out sediment ponds in a timely manner.

When it rains, sediment ponds at strip mines are used to collect runoff and keep mud and dirt from disturbed land from running into streams. Once in the ponds, mud and dirt drops to the bottom, and clear water flows out into streams. Mud and dirt must frequently be cleaned from the ponds, to keep them from filling up.

Under state mining regulations, coal operators must clean out sediment ponds whenever the ponds reach 60 percent of their capacity.

"Clean-out elevation shall be to a level so as to restore design storage capacity as indicated on plans submitted for each structure," the regulations state. "Sediment removal and disposal shall be done in a manner and at a frequency that minimizes adverse impacts on surface and groundwater quality."

Bandmill's first pond-cleaning violation occurred on Aug. 9, 2000. The pond was not completely cleaned, as DEP had ordered, until Oct. 19, 2000. The company was fined $1,400.

On May 13 of this year, DEP inspectors determined that all of the sediment control structures at Bandmill were full.

The agency issued an imminent harm cessation order, requiring Bandmill to immediately clean out its ponds. Among the ponds cited as full was the Winding Shoals pond, where Friday's problems occurred.

Four days later, a DEP inspector wrote, "very little pond cleaning has occurred ... potential exists for imminent environmental harm."

Company officials did not complete the pond cleaning until May 29, according to DEP records. Bandmill was fined $12,000.

But by that time, the company had allowed a different pond to fill to more than 60 percent of its capacity, state records show. DEP cited Bandmill again, and fined the company $2,200.

That pond was not cleaned until June 13, according to DEP records.

The last inspection of the site was on July 1, DEP officials said Friday afternoon. No citations were issued.

Under state mining rules, the DEP may move to shut down an operation if two or more violations occur within a 12-month period. The violations do not have to be of the same rules, but DEP may consider whether violations are of a "same or related" regulation in deciding whether to shut down mining.

Under the rules, if a company is cited for three violations within a 12-month period, the DEP director must "review the history of violations of any permittee who has been cited for violations of the same or related requirements."

Under the Wise administration, DEP has suspended permits for at three Massey subsidiaries because of repeated environmental violations. Massey has challenged those suspensions in court.

Jeff McCormick, assistant chief for enforcement at the DEP Division of Mining and Reclamation, declined to characterize Bandmill's compliance history.

"You've got the violation history, so draw your own conclusions," he said.

McCormick said the repeat pond-cleaning citation issue "probably hasn't been reviewed yet for a pattern.

"It's just one of those things," McCormick said. "It's bad that it happened. I feel bad for the people down there."

Massey CEO Says Company Looking To Kentucky

Saturday July 20, 2002

By Paul J. Nyden
Staff Writer
The Charleston Gazette

MADISON — Massey Energy Co. plans to begin shifting coal production to eastern Kentucky from Southern West Virginia, according to Don Blankenship, the company's chief executive officer.

"We're unable to continue to invest in West Virginia because of shareholder interest. We will invest in Kentucky," Blankenship testified during proceedings on Friday in Boone County Circuit Court.

Hugh Caperton, president of Harman Mining in Virginia, is suing Massey for nearly $30 million in damages he said he suffered when Blankenship stripped him of a contract to sell high-quality metallurgical coal to LTV Corp. Harman is now bankrupt.

During his testimony, Blankenship criticized Gov. Bob Wise, the state Department of Environmental Protection and Delegate Mike Caputo, D-Marion.

"The West Virginia DEP is influenced by the United Mine Workers," Blankenship said. "Bob Wise used to work for the UMW. And Mike Caputo is still causing trouble for coal trucks."

Caputo, a UMW officer, has led legislative efforts to keep legal truck weight limits at a maximum of 80,000 pounds and increase enforcement against overweight trucks, which often weigh between 140,000 and 190,000 pounds.

If Massey shifts its coal mining operations to Kentucky, as Blankenship apparently plans to do, the company would be abandoning areas where the majority of its coal reserves are located.

Today, Massey owns 2.1 billion tons of coal reserves, 82 percent of which are located in West Virginia, according to the latest annual 10K report Massey filed with the US Securities and Exchange Commission.

Kentucky has only 14 percent of Massey's reserves, with the remaining 4 percent in Virginia and Tennessee.

Under questioning from lawyer Bruce Stanley, who represents Caperton, Blankenship acknowledged Massey mines have released many spills of polluted water in the past. But he called most of them "small spills."

Blankenship believes some criticisms are exaggerated, such as those from local residents of Sylvester in Boone County, who complained that Massey's Elk Run mining operation covered their homes, cars and gardens with clouds of coal dust.

"Our nonunion operation has less dust in the community than there is in the Charleston [public] library. But we have been required to build a dome over part of the operation," Blankenship said.

Building the dome was part of an agreement between Massey and the DEP's Division of Air Quality.

In his lawsuit, Caperton charged Massey bought Wellmore Coal in July 1997 with the intention of shutting Harman Mining down. Blankenship stripped Harman of its coal sales agreement with Wellmore, shifting it to Massey's own mines in Southern West Virginia.

In March 2000, Caperton, a cousin of former governor Gaston Caperton, won a $6 million jury verdict against Massey in Buchanan County, Va., for financial damages. Massey is appealing the verdict to the Virginia Supreme Court.

During Friday's court testimony, Stanley questioned Blankenship about his salary and benefits from the company.

Last fall, Massey agreed to pay Blankenship salary, bonuses and other benefits that could total between $10 million and $15 million a year under his new contract from Nov. 1, 2001, to April 30, 2005.

When Stanley asked him if he was well compensated, Blankenship said, "I believe most people would think so, yes. Pretty good for a boy from Mingo County."

Blankenship will also get an annual pension of more than $1.4 million, according to the latest annual "proxy statement" that Massey sent its shareholders in March.

In February, Blankenship announced he would lay off up to 600 mine workers to "right size" his company. After the layoffs, Massey will employ between 4,200 and 4,300 people, most in Southern West Virginia.

Massey is currently transforming Charleston's Magic Island park into a mini-city of tents and stages for its company picnic, July 27. Employees from all of the company's subsidiaries are invited, meaning several thousand people are expected to attend.

Stanley mentioned that the proxy report revealed Blankenship received all his bonuses, "even though not all of the performance criteria [in his contract that ended Oct. 31, 2001] were met."

Massey's net earnings dropped from $203.4 million in 1999, to $78.8 million in 2000 to a loss of $1.1 million in 2001, according to Massey's latest 10K report.

The proxy and 10K reports also detail other real and potential financial costs, including:

$6.9 million paid to the West Virginia Workers' Compensation Fund for premiums never paid by Massey contractors;
$7.5 million for losses from sales contracts with Enron, the Houston-based energy trading company that collapsed in November;
$6 million for the Harman Mining verdict;
$2.5 million for a Mingo County jury award for a spill;
$225,000 in fines to the Kentucky Fish and Wildlife Service for damage caused when 230 million gallons of coal slurry poured into streams in eastern Kentucky from Massey's Martin County Coal operations in October 2000;
At least $9 million in other cleanup costs from the collapse of that coal refuse impoundment. Insurance companies paid for $32.5 million of $41.5 million in cleanup costs;

The Boone County jury trial, which began six weeks ago, was in its 26th day on Friday.

Blankenship will continue testifying Monday in the Harman Mining lawsuit at the Boone County Courthouse.


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