Patriot Spills Coal Waste in River 2 Months Post Bankruptcy Exit

Feb 11, 2014 8:55 pm ET

Feb. 12 (Bloomberg) -- Patriot Coal Corp., which emerged from bankruptcy in December, spilled waste into a creek feeding West Virginia’s Kanawha River, a month after Freedom Industries Inc. contaminated Charleston’s water with a coal chemical.

About 108,000 gallons of slurry waste from washing coal spilled into Fields Creek from the Kanawha Eagle Prep Plant near Winifrede, West Virginia’s Department of Environmental Protection said yesterday in an e-mailed statement. A slurry- line seal failed sometime after 2:30 a.m. and the company shut the pump at about 5:30 a.m., the department said.

The plant, located about 16 miles south of Charleston, is 95 miles from the nearest surface water intake and so the leak isn’t expected to affect public water systems, the state said. A coal cleaning chemical spilled from a Freedom Industries storage tank last month, polluting water used by about 300,000 residents in and around Charleston.

“These kinds of spills aren’t unexpected given the dangerous manner in which the chemicals and wastes from the industry are stored,” Lisa Evans, a lawyer at San Francisco- based Earthjustice, a non-profit focused on environmental issues, said by phone. “The frequency of failures is likely to increase.”

The spill impacted about 6 miles of Fields Creek, which empties into the Kanawha River. The creek was affected much more than the river, Thomas J. Aluise, a spokesman for the state DEP, said in the e-mail.

While the DEP initially reported that the Patriot plant was using MCHM, the same material that spilled from the Freedom site, it subsequently learned that the company phased out the chemical last month, Aluise said.

Patriot Cooperating

The spilled slurry mostly consists of fine coal, rock and water, St. Louis-based Patriot said in an e-mailed statement. Patriot is cooperating with state officials on the investigation, containment and cleanup.

On Feb. 2, an estimated 82,000 tons of coal-ash spilled into the Dan River after a storm drainage pipe under a containment pond ruptured at a shuttered Duke Energy Corp. coal- fired power plant in Eden, North Carolina. Coal ash is the byproduct of coal combustion and is typically mixed with water to form a slurry that cuts handling costs while increasing the risk of spills, Evans said.

West Virginia said enforcement action against Patriot is pending. The company filed for bankruptcy in 2012 after a slump in coal prices as some power stations switched to cheaper natural gas.

Patriot exited bankruptcy as a closely held company on Dec. 18, using $545 million in financing led by Barclays Bank Plc and Deutsche Bank Securities Inc. It received $250 million of junior capital in a rights offering from Knighthead Capital Management LLC and other unsecured creditors.

Patriot’s Kanawha Eagle mining complex includes the Peerless mine, which opened in 2012, according to the company’s website.

--With assistance from Shruti Date Singh in Chicago. Editors: Andrew Hobbs, Madelene Pearson