(Updates with violation notices issued today in 29th paragraph.)
Jan. 15 (Bloomberg) -- It took four days, but the Roadrunner Grill in Nitro, West Virginia, resumed serving hot bologna sandwiches yesterday for the first time since being shut by a chemical spill that polluted the area’s water.
“We are just waiting on the people,” said the Roadrunner’s owner, Belinda Hawley, as she looked out over her dining room with just two customers. “I’m hoping to get busier. I’m open, and it’s better than not being open.”
The Jan. 9 spill of a coal-processing chemical into the Elk River prompted the largest “do not use” order ever issued by West Virginia American Water Co., affecting 300,000 residents in nine counties surrounding Charleston, the state’s capital. Service restoration began Jan. 13, leaving residents and businesses to take stock of the economic impact.
The picture is mixed. Lawyers who are signing up clients for class-action lawsuits say the costs in lost wages, revenue and other economic harm could top $500 million. They’ve already filed more than a dozen cases against Freedom Industries Inc., the company that owned the tank that leaked into the river, or the West Virginia American Water, a subsidiary of American Water Works Co., the largest U.S. water company, and chemical maker Eastman Chemical Co.
Independent researchers say that while individuals have suffered, the lawyers’ estimate probably exaggerates the regional impact as purchases were deferred or pushed to areas not affected by the water ban. The daily economic activity in the Charleston area is $35 million, not a huge amount of the state’s annual output of $55 billion, said Matt Ballard, president of the Charleston Area Alliance.
“And this didn’t negatively impact every business,” Ballard said. “Things are going to turn back to normal.”
Governor Earl Ray Tomblin yesterday said tests by the company at the water treatment plant found no presence of the chemical that triggered the water ban. As of this morning, water was cleared for 51,000 homes and businesses -- roughly half the customer accounts -- to use.
The region’s many chemical makers and coal processors could face necessary though costly new rules, John Deskins, director of the West Virginia Bureau of Economic Research, said in an interview.
In the short run, he said, “Mostly what we’re looking at is a slight shift in economic activity.”
That’s little solace to small-business owners, waiters and barbers who endured unpaid leave as businesses and schools were shut by county health officials. As the ban gets lifted, residents are being warned to check hot-water heaters, refrigerator filters and septic systems to see if they were damaged by the chemical, 4-methylcyclohexane methanol.
“Everybody is looking at the water issue, but the economy and ability of people just to survive is being ignored,” said Chris Keeney, who lost wages after the Charleston restaurant where he works as a cook was shuttered for four days. “How am I going to pay my rent?”
The United Way announced a campaign to raise money for workers such as Keeney. Legislators who work in the capitol building urged customers to “Turn Up the Tips” for servers at local restaurants that had been closed.
Others don’t need the help. As Charleston has been without potable water, customers have been flocking over the bridge to St. Albans, which has a separate water source. The McDonald’s Corp. restaurant and the Tim Hortons Inc. donut shop have been packed at breakfast and lunch.
“They are having a windfall here,” said Jeannie Ward, who works at a coffee shop in the city.
Health costs could add up, as 286 people sought treatment at area hospitals complaining of nausea and headaches. Of those, 14 were admitted, including the daughter of Cindy Harrah-Cox, who spent two days throwing up a pink, foamy fluid after taking a shower.
Doctors diagnosed her daughter with chemically induced pneumonia, Harrah-Cox said in an interview. “He said he’d never seen anything like it,” she said. “Every day she was getting sicker.”
Harry Bell, a Charleston lawyer, said he signed as many as 300 people or businesses up for a class-action suit against Freedom and the water company.
“If you contaminate the water, you do great damage,” said Bell, who estimates the total losses at about $100 million. “There is no doubt that Freedom is irresponsible. We are going to investigate thoroughly, and this is going to end up being a big political issue.”
He says the water company should have planned for what could happen if the chemicals less than two miles from its intake leaked, and then should have shut its water intake once it learned of the spill.
“They need to know what exactly is upstream of their intakes,” Bell said in an interview. “There are some serious ramifications that are going on, which could have been prevented.”
West Virginia American Water said shutting down its intake would have been a mistake.
“If the plant had shut down, the communities we serve would have had no water at all,” said Laura Jordan, the company’s spokeswoman. “Our obligations to our communities are not just for drinking water, but also for the critical functions of public sanitation and fire protection.”
The Greater Cincinnati Water Works, which serves 1.1 million people, announced yesterday it was closing its intakes from the Ohio River -- which is fed by the Kanawha and Elk rivers -- until the spilled chemical passes. The plant will use its two-day supply of treated water and a groundwater treatment facility as needed.
Eastman Chemical of Kingsport, Tennessee, was sued yesterday in federal court in Charleston by residents who who allege the company concealed its cancer-causing elements. Maranda Demuth, an Eastman spokeswoman, said there was no evidence from its studies or others it was aware of that the chemical was carcinogenic.
Every company that could be sued has a rulebook, including the water utility, and might be liable if it could be proved that the company didn’t follow its guidelines, said Daniel Becnel Jr., a Louisiana lawyer who sued BP Plc on behalf of victims of a 2010 spill in the Gulf of Mexico.
Lawsuits could also be lodged against the city, if it didn’t follow guidelines for handling the emergency and dispersing the vapor, and people ended up in the hospital, said Becnel, who’s not involved in the cases in West Virginia.
The state’s Department of Environmental Protection checked the Freedom facility in 1999 and 2002 because it stored petroleum products, spokesman Tom Aluise said by phone. The department’s division of air quality also visited in April 2010 after a resident complained about a licorice odor that “leaves a bad taste in your mouth,” according to a state report.
No violation was found, and the state also checked in 2012 whether an air permit was needed, Aluise said.
The agency does plan to issue an order today requiring changes at the storage facility that Freedom Industries owns in Nitro, about 14 miles from the spill site, after inspectors issued five notices of violations there on Jan. 13, Aluise said.
The plant, called Poca Blending, is being used to store chemicals removed from tanks at the Charleston site that were emptied after the spill, Aluise said.
The violations included failure to provide an appropriate secondary containment for above-ground storage tanks. The facility also “failed to store drums containing materials that have the potential to contaminate groundwater so that spills and leaks are contained” and didn’t follow its stormwater and groundwater pollution prevention plans, including by having no record of quarterly site inspections and employee training since 2004, according to the agency.
A phone message seeking comment from a Freedom Industries spokeswoman wasn’t immediately returned.
The incidents have residents asking themselves whether officials have their safety at heart, said Ted Boettner, director of the West Virginia Center on Budget and Policy, a Charleston-based public policy group that favors more government regulation.
“The real impact will be in the long-term as we experience a brain drain,” Boettner said in an interview. “West Virginia does a very good job at being a cheap place for business, not being a good place for business.”
Other than chemicals, coal and natural gas, “nobody else wants to start a business here,” he said.
--With assistance from Linda Sandler in New York and Mark Niquette in Columbus. Editors: Jon Morgan, Steve Geimann