Bluestone Coal Story Archives - West Virginia Public Broadcasting

Residents Along Contaminated Creek Just Want Clean Water

In Pineville, West Virginia, a town of 500, residents filled up the front rows of the county courtroom recently. They came to hear the latest legal update on a battle some have been fighting for generations – securing clean water. Bobby Lee Keen and his wife Patsy attended the hearing. “How come they have people living like they’re in a third world country in the United States of America?” asked Bobby Keen.

“How come they have people living like they’re in a third world country in the United States of America?” asked Bobby Keen.

The Keens have lived in their house for 20 years, but they have never had clean drinking water. They say the only way they can drink the orange water that comes out of the faucet is by using it to make coffee.

Keen said the water quality has gotten worse in the last year, and he and his wife have had stomach issues and rashes. Other residents have reported similar symptoms.

And they’re not sure what could be causing it. Regardless, Keen believes one thing to be true.

“There’s something getting in that water,” he said.

One of the three places along the creek where water started coming out, and with it, a white stringy slime.

*Courtesy of David Stover*

A year ago, down the street from the Keens’ house, water started flowing out of the ground in the middle of a field, forming a pool. All that water led to a mold infestation in a nearby property owner’s house. The water had a rotten egg smell and white stringy slime.

Who Is Responsible?

Just below the surface of that pungent pool is an old mine, previously owned by the now-defunct Pinnacle Mining Company.

The West Virginia Department of Environmental Protection (EPA) tested the water and said that the results indicated that it had been polluted by the abandoned mine.

Nicolas Zegre, a Mountain Hydrologist at West Virginia University (WVU), said holes like the one in Pineville are known as artesian wells. They naturally push water from aquifers to the surface.

“When you start mining, the geologic layers, the below ground layers,” Zegre said. “You’re fundamentally changing how water is going to flow through the earth.”

Now, the pool of smelly, murky water has become a steady stream that flows into Indian Creek.

The DEP ordered Pinnacle to remedy the situation. When Pinnacle failed to act, it took the company to court.

There is one major problem here. Pinnacle Mining Company no longer legally exists. As part of its bankruptcy, the company’s assets and liabilities were sold. But to whom?

“That’s the million dollar question,” Matt Hepler, a scientist with Appalachian Voices, said.

Court documents show Pinnacle was, at least in part, bought by Bluestone Mining Resources and is owned by Gov. Jim Justice. However, Justice said Bluestone is not responsible.

Justice answered this question: “Many people along Indian Creek in Wyoming county are sounding the alarms about water contamination possibly coming from a mine that your company purchased, and now owns. As both the governor and the owner of said company is there anything you are planning on doing for these folks so that they can have clean drinking water?” by saying he is not responsible.

*Photo Credit: WV Governor’s Office*

“I’m all for them having good clean drinking water. But you can’t, you can’t blame me on this one,” Justice said at one of his regular press briefings. “The companies that we have are so distantly involved in this, it’s unbelievable. You know, the DEP is working on the issue.”

Hepler said this fits into a bigger context of the mess that ensues after a coal company goes bankrupt.

“They can’t even figure out, they’re arguing who that new owner is. So they’re not even sure. They’re just pointing fingers at each other,” Hepler said.

Which raises another big picture question.

“Who gets left holding the liability when these coal companies go out?” Hepler asked.

Will The Problem Be Fixed?

In court on April 4, the presiding Wyoming County Judge Derek Swope demanded the companies figure out who is responsible by their next court date in May.

Outside the courthouse, community members said they felt disappointed. Richard Altizer has been delivering water bottles to some of the residents affected by the water crisis. He and others were hoping the courts would have ordered Bluestone and Alpha Metallurgical Resources to cease all operations until they fixed some of the problems associated with Pinnacle’s abandoned mine.

Disappointed residents, some affected by the water crisis, leave the court room.

*Photo Credit: Briana Heaney/West Virginia Public Broadcasting*

“If that judge were to order that mines and the gas companies shut down until that is fixed they’d be out there tomorrow fixing it,” Altizer said.

In their lawsuit, the DEP and the man whose house was flooded, are asking for injunctive relief. They don’t want money for the damaged property or the health issues the water has caused, they only want what has been broken to be fixed. But residents are frustrated by what they say is a year of inaction.

“Now that the mine gets to operate, and the gas wells keep doing what they’re doing, everything’s hunky-dory with the poor people down here. And it’s frustrating,” Altizer said. “But like I said, we still got legal rights.”

The community is considering a class action lawsuit.

Richard Altizer has been delivering water bottles to community members paid for through crowd funding sites and city officials.

*Photo Credit: Briana Heaney/West Virginia Public Broadcasting*

Is The Water Toxic?

In the meantime, the question looms, is the water safe?

Grace Denver, an expert on water and its connection to people’s lives, works at WVU’s Center For Resilient Communities. She affirmed what residents have been saying about their everyday use of the water from contaminated wells.

“That can result in huge GI issues, skin rashes,” Denver said. “It can even lead to longer-term things like cancer and things like that.”

Patsy Keen brought photos with her to court in hoping to show someone involved in the legal process what the water was doing to her skin while she was routinely showering in it.

*Photo Credit: Briana Heaney/West Virginia Public Broadcasting*

Even though the DEP found the mine was the source of the contamination, it said the water quality passes all mine reclamation standards. But members of the community are skeptical. Terry Fletcher, with the DEP, said the agency is doing everything within its power to take on the issue.

“I know, there’s been kind of a narrative pushed out there that we’re only testing for one to two, three to four things when we’re testing for dozens and dozens of parameters,” Fletcher said.

But Hepler from Appalachian Voices said the tests that the department has done so far might not show the true water condition.

“Now when you test the water column, which is just to say test the water without any of that slime in it,” Hepler said. “The water has been coming back fine, according to West Virginia DEP standards.”

Hapler believes the water does pass mine reclamation standards, as well as Clean Water Act standards, but he said that even still that doesn’t translate to the water being safe.

And there is another set of data that is being ignored, said WVU’s Grace Denver.

“Community members are experts of their own lives,” Denver said. “And so I think like their lived experience of knowing, like recognizing the smell, noticing the color change in their community, and recognizing also if any rashes are appearing, or if they’re feeling funky, I think that is scientific knowledge. And I think that we should be taking these observations from the community a lot more seriously.”

For Bobby Keen, whose faucet still has orange water coming out, he said he isn’t angry at anyone, he just wants his family and community to have access to safe water.

**Editor’s Note: A previous version of this story said even though the DEP found the mine was the source of the contamination, it said the water quality passes all mine reclamation standards. It has been changed to: Even though the DEP found the mine was the source of what residents believe is contaminated water, it says the water quality passes all state water quality standards.

Justice Coal Company Ordered To Surrender Helicopter In 72 Hours

The sale of the 2009 Bell helicopter, valued at $1.5 million, would help to partially settle a $10 million debt Bluestone Resources owes to a Caribbean investment firm.

A federal judge in Virginia has ordered one of Gov. Jim Justice’s coal companies to surrender a helicopter to a third party in Texas.

The sale of the 2009 Bell helicopter, valued at $1.5 million, would help to partially settle a $10 million debt Bluestone Resources owes to a Caribbean investment firm.

In his Friday order, Judge Robert S. Ballou of the U.S. District Court for the Western District of Virginia, gave Bluestone 72 hours to turn over the helicopter to Heli-X of Colleyville, Texas.

If Bluestone fails to do so, U.S. Marshals would seize the helicopter.

Bluestone, based in Roanoke, Virginia, is one of numerous companies owned by the Justice family that owe vast sums of money to their creditors.

There are multiple cases involving Justice’s companies in the Western District of Virginia.

Last month, 1st Source Bank, of South Bend, Indiana, sued Bluestone in the court, charging breach of contract and seeking $4.5 million in damages.

The complaint accuses Bluestone of defaulting on loan agreements and also seeks attorney’s fees and possession of collateral.

According to the complaint, that collateral consists of “equipment owned by Bluestone Coal” and three properties that are part of the Wintergreen Ski Resort near Charlottesville, Virginia.

Another federal judge in Roanoke late last month held Southern Coal in civil contempt. That Justice company failed to reimburse a Charleston insurance company for more than $500,000 in workers’ compensation payments.

Judge Elizabeth Dillon gave Southern Coal seven days to repay BrickStreet Mutual Insurance. After that, the court will impose a $2,500 daily penalty on Southern Coal until it complies.

Justice is a Republican candidate for the U.S. Senate.

Justice Coal Company Must Pay Miner’s Health Premiums, Court Rules

U.S. District Judge Frank Volk ruled last week that Bluestone Coal owes a retired miner and his spouse six years of unpaid health care premiums.

A federal judge has ruled that one of Gov. Jim Justice’s coal companies is liable for health care premiums for a retired miner.

U.S. District Judge Frank Volk ruled last week that Bluestone Coal owes a retired miner and his spouse six years of unpaid health care premiums.

Volk, in an opinion filed in the U.S. District Court for the Southern District of West Virginia, gave the parties 30 days to reach an agreement on a settlement.

Bluestone owed about $100,000 in premium payments for Kenny and Patsy Dowell as of last September. The company must also pay interest and liquidated damages equal to 20 percent of the principal.

Bluestone is one of the numerous coal companies owned by the Justice family. Other Justice companies have been ordered to pay back loans and civil penalties in recent months.

In March, Bluestone Resources was found to be in default on an $861,000 loan from an Elkins bank. In December, Bluestone Coke was ordered to pay $925,000 to address air pollution violations in Birmingham, Alabama.

Gov. Justice Acknowledges Responsibility For $700 Million In Unpaid Business Loans

West Virginia Gov. Jim Justice has acknowledged that he owes $700 million in loans that have yet to be paid by one of his coal companies.

The governor fielded questions about the outstanding loans Tuesday during his COVID-19 briefing, following a report that indicated his responsibility for the debt.

The Wall Street Journal reported Sunday that Justice’s Bluestone Coal Corp. had taken out loans from Greensill Capital in 2018. The lending company recently went bankrupt, leaving a Swiss bank that bought the debt trying to recoup the funds.

Bluestone and Credit Suisse are reportedly now in talks about repayment, according to The Wall Street Journal. Bluestone has also sued Greensill for fraud in federal court.

Justice said Tuesday he had not read The Wall Street Journal’s report, but acknowledged he had been briefed on what was contained in the story.

The governor said Bluestone’s loans “have always been personally guaranteed” and that he and his businesses were not at fault. He repeatedly called Greensill a “bad actor” and says the debts are a “burden” on his family but that they are working to repay.

“It is a burden on our family beyond belief. And we’ll have to deal with it and everything,” Justice said. “But, you see, that’s something that we’ll have to deal with as a family and everything. It’s tough, it is really tough.”

Justice also pointed out that a Russian company had once owned Bluestone, saying that the coal operator had “melted down to nothing” before he had bought it back in 2015. Justice reportedly bought Bluestone for less than 1 percent of the price he’d originally sold it in 2009.

“It closed and left reclamation liabilities like crazy. They absolutely left liabilities to the unions, you know — there were pension obligations to the unions,” Justice said. “They left absolute tax liabilities, you know, whether it be to Wyoming County or McDowell County — and they left all kinds of obligations to vendors.”

Forbes had listed Justice as a billionaire, but the business magazine reported in April he was worth $440 million.

Judge Rules Justice-Controlled Coal Company Liable For Pollution Violations At W.Va. Mine

A federal judge has ruled a coal company owned by the family of West Virginia Gov. Jim Justice is liable for more than 3,000 violations of federal clean water standards stemming from pollution discharged from a coal mine in southern West Virginia.

In a motion issued Monday, U.S. District Judge David Faber ruled Bluestone Coal Corporation discharged selenium at the Red Fox Surface Mine in McDowell County many times at levels above its permitted allowances from July 2018 to March 2020. Selenium is a chemical element found in coal that accumulates in the body and has been linked to growth deformities and reproductive failure in fish.

Data submitted by the company to regulators showed 60 violations of its monthly average limit for

selenium and 78 violations of its daily maximum limit for selenium. Under the Clean Water Act, each violation of a monthly average limit is treated as a violation for every day in the month in which the violation occurred, rather than as a single violation for that month. In total, Faber found Bluestone was liable for 3,033 days of violations of the Clean Water Act.

Faber also ruled that the company violated its permit under the federal Surface Mining Control and Reclamation Act 183 times.

The lawsuit was brought by four environmental groups — the Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy, Appalachian Voices and the Sierra Club — under the citizen suit provision of the Clean Water Act.

Last month, Faber rejected Bluestone’s request to have the lawsuit dismissed. The company argued a 2016 settlement deal reached with the Environmental Protection Agency precluded environmental groups from suing over the selenium pollution.

In his opinion, Faber noted enforcement under the Clean Water Act is set up to be simple, and Bluestone’s own data showed repeated violations.

If and how much Bluestone should pay for violating the Clean Water Act, as well as if they will be required to install selenium treatment systems at the mine, will be decided at trial.

According to the document, the company has already paid $278,000 in penalties for selenium violations at the mine occurring from July 2018 to June 30, 2019.

Environmental groups are seeking additional penalties for the selenium pollution. In previous court filings, the groups estimate the maximum civil penalty under the Clean Water Act for Bluestone’s violations could top $160 million.

A request for comment from Bluestone or its lawyers listed on the court docket was not immediately returned. In a response filed with the court, Bluestone’s lawyers argued a pending modification to its pollution discharge permit by the West Virginia Department of Environmental Protection, if it had been in place, would have placed three of the four places where selenium is entering the environment into compliance.

The company further argued the levels of selenium being leaked from the mine “show there was no harm to the aquatic life under DEP’s standards.”

Federal Judge Rules Citizen Lawsuit Can Proceed Against Justice Family-Run Coal Companies

A federal judge has denied a request by coal companies owned by the family of West Virginia Gov. Jim Justice to dismiss a lawsuit over selenium violations at a southern West Virginia coal mine.

The Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy, Appalachian Voices and the Sierra Club in sued Bluestone Coal Corporation in August 2019, using the citizen lawsuit provision of the Clean Water Act.

The groups alleged that the Justice companies were discharging selenium at the Red Fox Surface Mine in McDowell County at levels that violated federal mining permits. Selenium, a chemical element found in coal that bioaccumulates, has been linked to growth deformities and reproductive failure in fish.

According to court documents Bluestone reported 107 violations since July 2018 — 42 violations of its average selenium limits and 65 violations of its maximum selenium limits. The company paid $278,000 in fines. But environmental groups argued the company should be subject to millions more in civil penalties.

Bluestone and its affiliates, including Red Fox’s operator Southern Coal Corporation, disagreed. They urged the court to dismiss the lawsuit, arguing that the Justice coal companies are being monitored by federal environmental regulators under a 2016 agreement.

Between 2009 and 2014, 27 Justice coal companies accumulated more than 23,000 water pollution violations at mines in West Virginia, Virginia, Tennessee, Kentucky and Alabama. The companies reached a settlement deal with the Environmental Protection Agency that included a $900,000 civil penalty and an agreement to implement an estimated $5 million in pollution control measures.

The deal also required the Justice companies to provide quarterly pollution reports to regulators. Selenium was not a pollutant covered under the agreement, court documents note.

Bluestone argued that because of the 2016 agreement with the EPA, also known as a consent decree, environmental groups could not bring a citizen lawsuit against them over the selenium pollution. They argued the lawsuit “would create undue interference” with the federal deal.

In his opinion issued Wednesday, U.S. District Court Judge David Faber disagreed. In his 29-page ruling, he sided with environmental groups and questioned whether the 2016 EPA agreement did enough to prevent the Justice coal companies from polluting.

The company “continues to be in consistent non-compliance with the terms of its selenium permits despite facing these general penalties for violations and repeat violations,” wrote Faber, who sits on the bench of the U.S. District Court in the Southern District of West Virginia.

The consent decree’s penalties, he continued, “have not remove[d] or neutralize[d] the economic incentive to violate” the environmental regulations related to selenium.

A request for comment from Bluestone or its lawyers listed on the court docket was not immediately returned.

Environmental groups are seeking additional penalties for the selenium pollution. In court filings, the groups estimate the maximum civil penalty under the Clean Water Act for Bluestone’s violations could top $160 million.

In an emailed statement, Vivian Stockman, executive director of the Ohio Valley Environmental Coalition praised the court’s decision to allow the case to proceed.

“The opinion underscores why it is so important to maintain fair and impartial courts as an independent branch of government,” she said. “Not even our billionaire governor is above the law and his businesses must be held accountable for polluting our waters.”