Taking taxpayers to the cleaners

If the “cleanup” of the Summitville gold mine in Colorado speaks for the competence of the Environmental Protection Agency (EPA), then be afraid for the environment and your pocketbook. Be very afraid.

Terrified for years, we’ve devoted plenty of ink to the EPA’s shameless display of incompetence at Summitville. We’ve repeatedly criticized its wasteful spending and dubious remediation measures that exacerbated site conditions, as well as its arrogance in rejecting offers of assistance from the mining industry. Last year, we concluded that the agency had managed the job with about as much finesse as the Keystone Cops.

As it turns out, that was an understatement. The EPA’s handling of the Summitville fiasco was a horror story from start to finish, far worse than anything we had ever imagined. It’s so bizarre as to be almost unbelievable.

Newly released evidence undermines the EPA’s claim to be the savior of Summitville, as well as its long-standing claim that Robert Friedland — the founder of Galactic Resources, the company that built and operated the mine — was the sole villain responsible for an environmental apocalypse that (according to media reports) killed fish and polluted local rivers.

Although the EPA spent US$130 million at Summitville, newly released court documents suggest that the firm contracted to do the “cleanup” extended the exercise to taxpayers’ wallets. The documents allege that as much as US$75 million “was the result of outright fraud, bid-rigging, billing irregularities, overstatement and over-billing of costs, and manipulative contracting practices.” The firm, Environmental Chemical Corp. (ECC), is being investigated for irregularities at other cleanups across North America and in the Persian Gulf. A related company (owned by the same family) was convicted of felony bribery of EPA officials at another site in 1995, and was forever debarred from government contracting.

The EPA didn’t release this information willingly; it was obtained by Friedland’s lawyers after considerable effort. However, by this point it was common knowledge that ECC had caused considerable damage at the site, owing to its egregious lack of technical competence. How it ever got the job in the first place remains a mystery.

In light of this damaging information, the U.S. government and the state of Colorado reduced their request to recover costs to US$41.7 million from US$130 million. They also decided to name seven additional companies as targets of cost recovery.

This sad story isn’t over yet. If the case ever goes to trial, the federal and state governments will have a tough time proving the validity and the necessity of the actions initiated by the EPA after it took over the site from a bankrupt Galactic in late 1992. In fact, a compelling case can be made that government incompetence turned what could have been a manageable environmental problem into a runaway disaster.

To set the stage, and to be fair, Summitville was not mining’s finest hour. Construction was hurried and bungled, there were major engineering mistakes and design flaws (including a critical water balance error), and it never made a dime. Summitville was a mine that should never have been built.

There is also no doubt that the mine degraded the water quality of nearby watersheds, but, because baseline studies were not required by state regulators before Summitville was permitted, no one knew what the proper water standards were, or should be, or how to take into account contamination from past mining and reactive geological features. Bureaucrats were deaf to pleas that the water standard, Class I fishery, was clearly inappropriate for waters downstream of the mine — water that, owing to historic mining and natural contamination, was never of fishery quality.

The problem became a crisis when the state’s Water Quality Control Division (WQCD) refused to alter its unreasonable standard governing the quality of waters flowing from the site. Had it done so, Galactic would have been able to discharge excess water from its heap-leach pads after treatment to remove cyanide and metals. Instead, it had to treat the same water over and over again because it was unable to meet the effluent-dissolved silver limit set by the WQCD, which was more stringent than drinking water standards. It has since been suggested that the silver concentrations could not have been accurately measured because of matrix interferences. In any event, Galactic was pushed into bankruptcy after spending millions trying to meet water quality standards that nobody, including the EPA, has been able to meet.

Aghast at what was happening, several mining companies and industry groups offered to help the clean-up effort at their own expense. However, the EPA wanted a sizable sum posted up-front as a bond against any environmental damage related to the volunteer effort. The companies were given thirty days to raise US$20 million, which proved to be an impossible task.

The mining companies were even more aghast by the EPA’s initial remedies. In the fall of 1994, the Colorado Mining Association publicly questioned the wisdom of plugging adits and putting waste rock into the mine pits (at fees three times the going rate), all of which exacerbated, not reduced, acid rock drainage. It also pointed out that treated water exceeding water-quality standards was being discharged from the site.

The CMA also questioned why most of the contractors used by the EPA had “little expertise in mining,” and why the EPA wasn’t doing proper studies and following its own rules. The EPA defended its early work at Summitville as “an emergency response” to the situation. However, this defence was challenged even by environmental groups monitoring the cleanup. The EPA ignored warnings by the U.S. Geological Survey and plugged old tunnels and adits, with disastrous consequences. Instead of a ‘point source’ of acid mine drainage (the case before plugging), there are now many non-point sources of polluted water that are difficult or impossible to identify, collect and treat.

The real tragedy of Summitville is that so few lessons have been learned, including chilling ones about human arrogance and incompetence. This sad saga has few heroes, least of all the EPA and Colorado’s WQCD.

The press also failed to serve the public well, repeating rumours attributing the loss of aquatic life to cyanide contamination. The evidence shows that the quantities of cyanide released, even under the worst of circumstances, were small, and most of that was gassed-off by acidic waters at the mine, with the remainder diluted to non-toxic levels. The probable cause of the aquatic damage was found to be high copper discharged from an old adit that was not covered by the mine’s discharge permit at the time.

Furthermore, when the EPA took over Summitville, cyanide was not leaving the site, and neither were metals, and there was no danger of a spill until spring. There was time to do things right, but it is now obvious that the EPA’s main contractor had other priorities, and that the perceived crisis served it well.