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Anadarko Petroleum Subsidiary to Pay State $20 Million For Heavily-Contaminated Site In Somerset County

Press release provided by The Office Of The Attorney General 

Acting Attorney General John J. Hoffman announced today that Texas-based Anadarko Petroleum Corp. and its subsidiary Kerr-McGee will pay the State $20 million as part of a global legal settlement that involves reimbursement to New Jersey for past costs and Natural Resource Damages (NRD) related to clean-up of a heavily-contaminated Superfund site in Somerset County.

The New Jersey property involved in the global settlement is known as the Federal Creosote Superfund Site in Manville. The $20 million payment to New Jersey is part of a record-breaking $5.15 billion settlement announced today by the law firm Irell & Manella, the trustee appointed to pursue claims against Kerr-McGee.

Following a historic trial in 2012, Kerr-McGee was found by a federal bankruptcy court to have engaged in fraudulent corporate asset transfers in an effort to shield its valuable oil and gas assets from liability claims spawned by the firm’s contamination of properties throughout the United States – contamination that spanned decades, as Kerr-McGee earned profits from such businesses as uranium mining and wood treatment.

The bankruptcy court verdict, which essentially invalidated Kerr-McGee’s transfer of environmental and tort liabilities to a spin-off entity known as Tronox, cleared a path for ultimate resolution of liability claims pursued by New Jersey and other parties, and for the settlement announced today.

“This settlement reaffirms New Jersey's commitment to making certain that those who cause pollution do not evade their obligation to pay for its cleanup,” Acting Attorney General Hoffman said. “We will continue to protect the residents of New Jersey, and their quality of life, by vigorously pursuing those who are legally responsible for contaminating our precious environmental resources.”

The Federal Creosote Superfund Site in Manville was once the home of a coal tar wood treatment facility operated from approximately 1911 to 1956. During its operation, the facility treated railroad ties with creosote. The most prominent features of the wood treatment operations included two unlined canals that conveyed creosote waste to two unlined lagoons. The lagoons held concentrated creosote waste sludge. 
Attorneys for the Division of Law filed proofs of claim related to the Federal Creosote  Superfund Site in 2009, seeking past costs and Natural Resource Damages on behalf of the state Department of Environmental Protection.

Those claims, as well as environmental claims against Kerr-McGee made by 10 other states, the federal government and the Navajo Tribe relative to polluted industrial sites across the nation, have been resolved as part of the global settlement announced today.

Today’s settlement must now be approved by the federal bankruptcy court. Once the Settlement is lodged with the bankruptcy court, it will be subject to a 30-day comment period.

 Assuming that the court approves the settlement after hearing any objections that might be filed during the comment period, it may be subject to an appellate review process in the U.S. Court of Appeals for the Second Circuit. It is anticipated that settlement proceeds could be available for distribution by the trustee by year's end, depending on the pace of any appeal process.

Deputy Attorneys General John Dickinson and Richard Engel, both assigned to the Division of Law’s Environmental Enforcement section, handled the Kerr-McGee matter on behalf of the State.

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