ENR DOJ (202) 616-0189 TDD (202) 514-1888 EPA (202) 260-4361

U.S., MINNESOTA AND PRIVATE PARTIES TO SPEND $20 MILLION TO CLEAN UP DULUTH-AREA SUPERFUND SITE INNOVATIVE SETTLEMENT ALSO FREES MORE THAN ONE HUNDRED SMALL PARTIES FROM LITIGATION WASHINGTON, D.C. -- The federal government, the state of Minnesota and fifteen private parties will contribute $20 million to the cost of removing oily residues and carcinogens from a northern Minnesota Superfund site, the Department of Justice and the Environmental Protection Agency announced today. More than 100 gas station owners and other parties that contributed smaller amounts of waste oil will pay far smaller amounts and be freed from further litigation. The settlement, which ends litigation over the cleanup of the Arrowhead Refining Company site near Duluth, is part of a consent decree lodged today in the United States District Court in Minneapolis. Arrowhead operated a waste oil "re-refining" operation at the site from 1961 to 1980, and local businesses like Armco and USX disposed of their waste oil at the site. Tons of thick sludge and other by-products contaminated surface and groundwater -- some carcinogenic. As a result, water supplies for nearby residents had to be rerouted, and local wildlife and fauna were killed by exposure to the pollution. In 1989, the United States and Minnesota sued fifteen major waste contributors, who in turn sued hundreds of other companies and individuals who has sent smaller quantities of waste oil to the site. Some are individuals who operated gas stations during the 1960's and 1970's and are now living on limited financial means. The settlement lodged with the federal court today treats many of these parties as "de minimis" settlors, permitting them to fully resolve the claims against them by paying a designated share. The smallest contributors to the site will pay a fixed amount to the defendants to resolve all claims against them. Parties with severely limited means were allowed to settle based on their ability to pay.

"This settlement frees up many small business owners and retirees from costly litigation," said Lois J. Schiffer, U.S. Assistant Attorney General for Environment and Natural Resources. "The federal and state governments' 40% share of the cleanup costs for the Arrowhead site is a fair price to pay to conclude this case." Under the settlement, the private parties will pay about 60 percent of the total cleanup costs and the two governments about 40 percent. The 15 major defendants will excavate and remove all sludge material from the site and treat the material using a new technology that will render it essentially harmless -- at a cost of approximately $12.5 million. If the technology fails, the defendants are required to incinerate the sludge. The settlors have already spent $6.4 million in other response activities at the site. EPA will clean up other surface soils contaminated with oily residues at a cost of about $6.35 million, and the State of Minnesota will spend about $1 million to continue the groundwater pumping and treatment remedy that the private parties already began. "The 'mixed funded' remedy in this settlement demonstrates our commitment to using all the tools available to the United States," said Steven A. Herman, EPA Assistant Administrator for Enforcement and Compliance Assurance. "Concentrating on de minimis and small party settlements such as this one is also an important part of our effort to make the Superfund statute work fairly as well as forcefully." The sludge to be cleaned up contains lead, polyaromatic hydrocarbons, and volatile organic compounds and some carcinogens. In addition to threatening drinking water, the site also posed a threat to forests and wildlife, with trees, birds and animals dying after exposure to the oily soils and sludge spread across the ten acre surface. "Resolving the Arrowhead litigation by sharing responsibility for the cleanup was an appropriate and effective settlement tool," said Valdas V. Adamkus, Regional Administrator, U.S. EPA Region 5. "When the federal and state governments work in partnership with the private sector to achieve environmental benefits, all of us should share the credit." "It took creativity and flexibility to craft a fair deal for all parties," said David L. Lillehaug, United States Attorney for the District of Minnesota. "The people of the State of Minnesota will no doubt welcome the cleanup of the site, but people across the country also should salute the effort to use the Superfund to finance settlements and avoid unecssary litigation." ###