EPA Struck Secretive Deal Over Toxic Site Leaving $13 Million in BP’s Pocket

Emails show that, at BP’s request, EPA handed control of the Anaconda Copper Mine to Nevada, sidelining tribes and residents who fear they'll never have clean water.

In February, before an invitation-only crowd assembled in near secrecy behind locked gates, Scott Pruitt, then head of the U.S. Environmental Protection Agency, signed over control of one of the nation’s biggest toxic waste sites to the state of Nevada. A blue sky blazed over the 3,400-plus-acre Anaconda Copper Mine near Yerington, Nevada, as Pruitt and Governor Brian Sandoval signed the paperwork. Beaming, they posed for a photograph with proponents of the deal, including John Minge, then the CEO of BP America, and Robert Genovese, then president of Atlantic Richfield Co. (ARCO)—senior representatives of both parties responsible for cleaning the site.

Many locals who watched coverage of the ceremony on TV news that evening, meanwhile, were dismayed by the transfer.

For decades, toxic byproducts of the copper-mining process, including uranium and arsenic, leached into the aquifer below the dormant mine, forming a radioactive plume that extends several miles north from the site toward the lands of the Yerington Paiute Tribe, according to EPA tests. Since the EPA first discovered the plume almost a decade ago, BP has supplied several hundred residents with bottled water because their taps are too dangerous to drink from.

Pruitt, who sued the EPA alongside industry parties 13 times as Oklahoma’s attorney general, portrayed the deal as a victory for Trump administration efforts to shift responsibility for environmental regulation and enforcement to states from the federal government. For their part, the state, ARCO, and BP say the new arrangement will lead to a faster, better cleanup of the aquifer. The Anaconda transfer was, Pruitt said, “a perfect example of cooperative federalism in action.”

It was also a deal struck largely behind closed doors. According to documents Audubon acquired through the Freedom of Information Act, within months of President Donald Trump’s inauguration, Sandoval and Pruitt deputies began meeting in private with BP officials to discuss shifting cleanup oversight from the EPA back to the Nevada Division of Environmental Protection (NDEP). Emails show that BP executives orchestrated the handover, working closely with NDEP and EPA officials. The allies kept the process under wraps and moved quickly, sidelining tribes and residents who say that state officials misled them for decades about the site’s safety, and were too cozy with the mining industry to enforce the cleanup.

The deferral agreement was part of a broader effort by Pruitt to streamline the federal Superfund program, which oversees cleanup of more than 1,300 hazardous waste sites on the National Priorities List (NPL). Many of these projects have been dragging on for decades.

The Anaconda Copper Mine wasn’t on the NPL; it was a proposed Superfund site, poised to be listed at the end of the Obama administration.

Then last spring Pruitt assembled a Superfund Task Force, which selected about two-dozen proposed and existing Superfund sites, including Anaconda, to use as test cases “targeted for immediate, intense action” with the Administrator’s “direct engagement.” The task force apparently kept no records of its deliberations, including why certain sites were selected for the Administrator’s Emphasis List and who made those decisions.

Since Pruitt resigned in July amid mounting ethics investigations, Andrew Wheeler, the acting administrator, has continued Pruitt’s Superfund reform initiative. To date 11 sites, including Anaconda, have been removed from the Administrator’s Emphasis List, and in Fiscal Year 2018 alone all or part of 22 sites were deleted from the Superfund NPL.

While EPA has been striking sites off the lists, ethical questions have cropped up: In September, the EPA’s Office of the Inspector General announced an audit of the Superfund Task Force—its creation and recommendations, including the Emphasis List—to determine if it followed laws and rules.

Whatever the investigation concludes, it’s clear the Anaconda deal was a win for the negotiators. Pruitt crossed the mine off his list. State and local officials avoided the stigma of a Superfund listing, which they feared would hurt the local economy. BP retained some say in how the cleanup will proceed and how company funds will be spent. And ARCO, through legislation and other moves that coincided with the deferral, is being let off the hook for $13 million owed to the EPA for past remediation and could gain ownership of thousands of acres of federal land around the site—further reducing federal involvement at the mine.

To many residents affected by the toxic plume, the loss of federal oversight is alarming. They fear the state won’t force ARCO to fully restore the aquifer. They fear they’ll be drinking bottled water indefinitely.

ARCO landed "the weakest regulator in the house,” says Dietrick McGinnis, an environmental consultant working for the Yerington Paiute Tribe, whose 99 households must use bottled water. “It’s now going to be very tough to get ARCO to shoulder its full responsibility.”

Acentury ago, miners began working vast swaths of a Nevada valley to access copper. In 1941, the Anaconda Copper Mining Company purchased a site about 70 miles southeast of Reno and struck the rich Yerington deposit—a discovery that made the Anaconda mine, briefly, the most productive in the state. Miners poured sulfuric acid over crushed bedrock and scrap iron to extract copper, exposing other compounds, including uranium, in the process. Between 1953 and 1978, it produced some 1.75 billion pounds of copper.

In 1977, ARCO purchased the Anaconda Copper Mining Company and, with it, properties throughout the West, including the Yerington mine. The following year it shut down the Anaconda operation when copper prices fell. No active mining has taken place there for decades, though several companies reprocessed old mine tailings to extract metals in the 1980s and '90s. Nevertheless, ARCO is liable for the cleanup because it owned the site in 1980, when the Superfund law was enacted. When BP bought ARCO in 2000, it became indirectly liable for any contamination at all ARCO-owned mines.

The first evidence of toxic waste at Anaconda was documented as early as 1982, when NDEP found ARCO had been discharging pollutants improperly. Three years later, the state agency directed ARCO to install a pump-back-well system to prevent contaminated groundwater from migrating offsite. (Two decades later it was shut down after EPA tests revealed it was having no impact.)

Peggy Pauly and her husband moved to Yerington from California in 1989 when he became the pastor at a local church. The couple bought a two-acre home site tucked up against the north end of the Anaconda Copper Mine with a great view of the mountains. They dug a well for drinking water, built a three-bedroom house, and adopted two daughters. “[The realtors] told us everything was safe,” she says.

No mining was underway when Pauly moved in, but the damage had already been done. Old mine tailings contained uranium, a byproduct of copper processing, and the radioactive waste was initially dumped into unlined ponds. From there, it leached into groundwater—the same groundwater that Pauly’s well tapped.

Pauly had no clue her well water had dangerously high uranium levels, which can increase cancer risk and damage kidneys, according to the EPA; if the NDEP knew, it didn’t publicize the information. She and other residents might never have found out if it weren’t for the tenacity of unidentified officials with the U.S. Bureau of Land Management (BLM), which oversees federal land that comprises almost half of the near-3,500-acre site.

In 2003, increasingly concerned about contamination at the mine, BLM sent a contractor to comb through a trove of Anaconda records at the University of Wyoming in Laramie. Among them was an alarming 15-page commercial study from 1976 that estimated 50,000 pounds of uranium oxide could be extracted annually from the mine’s tailings and sold for fuel in nuclear reactors.

BLM also hired Earle Dixon, a uranium expert who had worked at a major Nevada nuclear testing site. The reaction of his Geiger counter when he walked around the Anaconda site in 2003 spurred Dixon to hire a contractor to conduct soil tests, which confirmed high levels of radioactivity.

BLM announced the results in a public teleconference in summer 2004, causing uproar in town. Residents were outraged that it took a federal agency to finally test for widespread pollution at the mine. On the other side, state regulatory officials were irritated that BLM conducted tests without their knowledge; Dixon says he was fired after they complained to his bosses. Dixon, who later won a wrongful termination suit under the federal whistleblower protection statute, described to Audubon the mindset that led to his firing: “We don’t want to believe that the site is a big problem. We don't want to believe that this uranium is not natural,” that it was a mining byproduct.

“Nevada regulators are very, very protective of the mining industry,” says Dixon, who is now working with McGinnis in the interest of the Yerington Paiute Tribe. It’s called the Silver State for a reason.

Jim Sickles, EPA’s Anaconda project manager at the time, echoes Dixon’s concerns about state regulators. “The Nevada folks always felt, ‘Gee whiz, the companies are our buddies, and they’ll help us clean up because they’re good corporate citizens,’ ” says Sickles, who worked for ARCO as a uranium-mining expert in the 1970s.

But “every time you tried to do something, it wasn’t just you arguing with the mining company’s lawyers,” he says. “They would make a call to the state and all of a sudden the state would say, ‘Oh, you’re being too hard on the mining company.’ ”

In late 2004, however, after the uranium revelation, NDEP said it didn’t have the resources to lead the Anaconda cleanup. That’s when the agency asked the federal government to take over.

After several years of monitoring the site, in 2009 the EPA tested the water in wells within and adjacent to the Anaconda mine. ARCO and BP argued that low levels of uranium occur naturally in Nevada’s soil, and it would be impossible to prove that mining caused its presence in the water. But EPA found that uranium levels were more than 100 times naturally occurring levels, and that 79 percent of wells north of the site had dangerously high levels of uranium or arsenic. The agency also discovered evidence of a radioactive plume with elevated levels of uranium, thorium, arsenic, and other toxins in the aquifer, extending down hundreds of feet and reaching as far as three miles north of the site.

Directly above that plume lie farm fields, settlements, and the lands of the Yerington Paiute Tribe. In 2011, 700 past and current residents living around the site sued ARCO for intentionally concealing the extent of the pollution. In 2013, the company reached a $19.5 million settlement with the plaintiffs, but didn’t admit guilt. The tribe has a separate lawsuit pending against ARCO and BP.

To Pauly, it was clear that EPA should direct the cleanup, especially the aquifer restoration. “Every time EPA did more monitoring they found more contamination,” she says. “NDEP dropped the ball.”

But there was a hitch. While the agency was technically in charge of the mine, it had limited funds and limited authority to coax ARCO to fund remediation because Anaconda wasn’t on the Superfund NPL.

So Pauly launched a campaign to add Anaconda to the NPL, joining forces with ongoing efforts led by the Yerington and Walker River Pauite tribes since 2000. She formed the Yerington Community Action Group and made public and media appearances to educate people about the dangers of the mine.

Campaigning wasn’t easy. Nevadans, she says, tend to trust the mining industry more than the federal government; to many, EPA is a dirty word. State political leaders and residents not directly affected by the contamination argued that listing the site would stigmatize the entire community and might hurt sales of local farm products. “I had people tell me I should move to Tahoe and hug a tree,” Pauly says. Undeterred, the campaigners forged ahead.

Their persistence paid off. In December 2015, the Obama administration proposed adding the Anaconda mine to the NPL. Again, EPA faced a stumbling block: By political custom, it needed Governor Sandoval’s approval, something he’d long refused to give. In March 2016, he finally agreed. Six months later, shortly before the presidential election, EPA put Anaconda on a glide path to being listed despite protests from ARCO and BP, which still wanted the state to control the cleanup.

For Pauly and her allies, it was a Hallelujah moment. “We thought everything was in line,” she says. “It was getting done.”

Their jubilation didn’t last long. Within a month of Trump’s inauguration, EPA paused actions to add Anaconda to the Superfund priority list. A year later, Pruitt joined Sandoval at the mine to announce the federal deferral and celebrate Anaconda’s return to state control.

Watching TV news reports of the signing ceremony was “like a blow to head,” Pauly says. She and others directly affected by the contamination say they had no real say in the deferral agreement.

“They have not worked with us at all,” says Laurie Thom, chair of the Yerington Paiute Tribe, whose reservation lies two miles north of the site.

The deferral process required the state to take certain steps, including seeking public comment. NDEP held three public roundtables between May and August of 2017, dutifully logging participants’ concerns. Opponents, however, believe the meetings were held to check a box needed to clear the way for the deferral. Pauly and others felt that the decision to turn the site back over to the state had already been made. “It was like a steamroller,” she says.

Documents Audubon acquired through the Freedom of Information Act support their suspicions.

Much of the real work of the deferral agreement appears to have been undocumented, but a flurry of emails sent leading up to the announcement in February show close coordination between EPA, the state, and BP officials. The emails also reveal how EPA sidelined the tribe and other opponents.

One email, for instance, shows that in July 2017 in Washington, D.C., Robert Genovese, former ARCO president and former BP president for global remediation management, and Robert Miner, head of state and local affairs for BP, met with Albert “Kell” Kelly, Pruitt’s former business financier who was then head of the Superfund Task Force now under investigation by the EPA watchdog. (Kelly resigned on May 1, 2018.) They discussed several toxic sites that BP inherited when it bought ARCO, including Anaconda, Silver Bow Creek—home to the Berkeley Pit, where in 2016 thousands of Snow Geese were poisoned—and Leviathan on the California-Nevada border. Communities living near those sites weren’t privy to that conversation, and no public records were made.

In early December 2017, a lawyer representing ARCO emailed representatives of the Nevada Attorney General’s office, NDEP, EPA, and BP (including Genovese) with requested revisions to a draft deferral agreement. One of six main disagreements was that the draft agreement required “substantial participation” by the tribes in any actions off their reservation. (The Anaconda site is not part of the reservation, however the contaminated aquifer lies beneath their land and is their drinking water source.) The language was removed from the final agreement. 

“BP continues to seek any means possible to deprive the Tribe of its rights to protect its cultural and natural resources,” says McGinnis, the Yerington Paiute Tribe’s environmental consultant, in response to the email. “The law is clear that those resources are not exclusive to the reservation.”

The same email, sent on December 4, describes an upcoming two-day meeting, on December 6 and 7, with NDEP and EPA leadership to discuss the deferral agreement. “Atlantic Richfield’s representatives, including senior management, have cleared their schedules for these meetings on both days,” the lawyer wrote, “which we expect will be conducted as three-way discussions among the parties”—with no other stakeholders.

On January 25, just two weeks before the signing ceremony, leaders of the Yerington and Walker River Paiute tribes were summoned to EPA’s San Francisco offices to discuss the deferral. The next day, Alexis Strauss, EPA’s top regional official, emailed BP’s Genovese about the meeting. “The Tribal chairmen understand we are on a path to deferral, and will likely seek consultation with the Administrator, having earlier requested consultations with Governor Sandoval,” she wrote. Neither Pruitt or Sandoval met with them. “We did not invite comment on the . . . deferral agreement,” Strauss added.

EPA had hoped the tribes would sign a memorandum of understanding in connection with the deferral—official proof of their involvement. Strauss warned Genovese that the tribes were unlikely to sign the document. They didn’t.

The ceremony preparations were shrouded in secrecy, with one senior EPA official instructing another in an email, “I want to make sure this detailed agenda is kept close/not broadcast internally, and on a need-to-know basis.”

Thom, chair of the Yerington Paiute tribe, emailed EPA officials the day of the event, a Monday, noting she hadn’t been notified of the signing ceremony until late the previous week. Her frustration and anger at what she saw as disrespect for the tribe and “strong-arming” was clear: “A photo Op for a deferral announcement that we are not in agreement with; before all thresholds have been satisfied and before true consultation; falls short of EPA’s Trust Responsibility to the Tribe.”

Under federal law, Native American tribes are sovereign. While the government technically holds legal title to their lands, “federal trust responsibility” requires consulting with tribes to protect their land interests.

Strauss forwarded Thom’s email to her EPA bosses, adding, “Not unexpected but the tone is unfortunate.” 

After signing the agreement February 5, Sandoval spoke. “This is a landmark day for those who have worked to accomplish a path toward achieving our shared goal of cleaning up the mine site,” he said. “I am grateful for the trust of the EPA to defer management of the process to Nevada and the incredible partnership with Atlantic Richfield Company.”

BP wins more from the deal than a possibly friendlier regulator. In negotiating the deferral, the Trump EPA appears to have let ARCO off the hook for millions of taxpayer dollars it owed the agency. ARCO owed $28 million for remediation work EPA had done at the mine, according to an accounting the EPA press office provided Audubon. Before the deferral signing, ARCO paid $8 million and EPA waived $4 million. That left a $16 million tab. On April 24, EPA finalized a settlement in which ARCO paid an additional $3 million—leaving $13 million of taxpayer money in ARCO and BP’s pocket.

“That just proves the point that this was a bit of a financial giveaway,” McGinnis says.

ARCO might get another windfall out of the deal. Last March, Rep. Mark Amodei (R-NV), introduced legislation in Congress that would give ARCO 2,062 acres of federal BLM land on and around the site. “BP came in and asked us to introduce a bill,” Amodei told the Reno Gazette Journal. “This was a chance to allow the cleanup to go forward in a private context instead of a federal one.” In other words, to prevent the feds from meddling.

It’s not uncommon for federal land to be transferred to a company remediating a toxic waste site, says Lynda Deschambault, a former EPA remedial project manager who didn’t comment specifically on Anaconda. It simplifies the project bureaucratically by taking BLM out of the picture.

The Yerington Paiute tribe blasted Amodei’s bill, saying it would deny them access to traditional tribal land and cultural sites. “The only party that benefits from the public land offering in [the bill] H.R. 5347 is the foreign corporation, BP,” wrote tribal chairwoman Thom in testimony submitted to the House Committee on Natural Resources on July 17. “The United States loses valuable land and gains nothing.”

Greg Lovato, head of NDEP, bristles at the notion his agency isn’t up to overseeing the cleanup.  “You can’t point to an example of one mistake an agency may have made decades ago and say that means deferral doesn't make sense,” he says, referring to when NDEP previously managed the site, before EPA took over in 2004. “It’s an entirely new team that hasn’t inherited the motives of the agency in the past, with more resources and a major commitment from Atlantic Richfield.” Charges the state is cozy with ARCO are a “slur,” adds Lovato, who worked as an engineer for the NDEP’s regional office until 2006.

Under the deferral agreement, ARCO is responsible for the lion’s share of the cost of the cleanup. So far the company has spent $100 million. Lovato says it will take at least another $100 million to finish the job; some estimates peg complete aquifer restoration at $1 billion. Nobody knows the final price tag because it depends, in part, on the extent to which the aquifer is remediated.

ARCO has agreed to shell out an estimated $30 million to $40 million to complete the first of three cleanup phases by 2024. During the first phase, NDEP is to conduct a health-risk assessment. To date, no studies have been undertaken to determine if illnesses, including cancer, and deaths that residents attribute to mine waste are actually linked to it. The state will also assess the feasibility of remediating groundwater during this period.

“Before you can say how long restoration of the aquifer will take, you need to define what level you’re going to clean it down to and how that’s going to be done,” Lovato says. “That hasn’t been determined yet.”

Jason Ryan, director of U.S. media affairs for BP, noted in an email that NDEP will evaluate “various options for groundwater.” Then the state “will decide on the appropriate remedy for groundwater” based on “best available science and will be consistent with regulations.”

Residents living above the contaminated aquifer worry that the state’s assessment, which includes budget estimates, will conclude that the plume will cleanse itself eventually over many decades or more, and therefore pumping and treating the water wouldn’t be worth the expense. Despite the uncertainty around the timeline, the state and ARCO estimate that the third phase will be complete by 2029.

“Our concern is that now that it’s back in the hands of the state and Atlantic Richfield, that they’re going to want to do as little as possible,” Pauly says. “They’re not going to spend the money it would take to really clean it.”

After all, affected residents are already on bottled water, paid for by BP, and many of their wells have been capped. So the state might decide that the appropriate course of action is to simply monitor the groundwater while the contamination decays and disperses naturally over decades or centuries.

Pauly has had enough. After watching the deferral signing on TV, she wrote an email to her allies: “I’m done.” She disbanded the Yerington Community Action Group.

While the opposition has lost one its fiercest fighters, tribal leaders continue to protest the deal. In newspaper reports and Congressional testimony, they keep pushing in the hopes that, once again, the political tides will turn in their favor and the aquifer, their land’s drinking source, will be fully restored.


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