Coffeyville Resources has brought in a team of experts to assist with the clean-up and remediation of Coffeyville. The city manager was quoted by The Coffeyville Journal as saying that a fourth of the community’s some 11,000 residents were impacted by the July 1 flood.
The company said its team includes globally-recognized, EPA-certified experts whose experience helped Gulf Coast refineries deal with the disastrous effects of Hurricane Katrina. The team, which is already on the ground and working in the community, includes The O’Brien’s Group, who will manage the overall process, including containment and recovery. In addition, United States Environmental Services, LLC (USES) is providing the operations support, and the Center for Toxicology and Environmental Health (CTEH) will oversee sampling, analysis, and reporting for the operation.
“We deeply care about the health and well being of the citizens of Coffeyville, as well as our own employees, many of whom live in this community,” said Chris Swanberg, Coffeyville Resources vice president of environmental, health and safety. “The companies we’ve hired are among the best in the world. They are directing the recovery operation occurring outside of our refinery.”
The company had already established a toll-free call center where residents could file their claims; it fielded more than 500 calls within a few days of opening. In addition, the claims office will be assisting victims with online filing for FEMA individual assistance.
The company has been immersed in efforts to deal with the flood’s aftermath, and no assessments as to when the plants may come back online were forthcoming last week. “No time table is in place yet,” said Steven Eames, company spokesman, on July 10. “The nitrogen fertilizer plant was generally on higher land and likely could resume operations first.”
Coffeyville CEO Jack Lipinski was quoted in The Coffeyville Journal as saying the company had invested $300 million in the facility this year and that it was not going to walk away. “The refinery was shut down at very, very short notice,” said Lipinski, adding that it normally takes 24 hours at best to shut it down. “We had seven,” he said.
Allegations are now that some 71,000 gallons of crude oil from the refinery mixed with the flood waters, not the 42,000 reported earlier (GM July 9, p. 1). Flood water samples found fecal coliform bacteria at more than 130 times the standard rate, according to the U.S. Environmental Protection Agency, which put out a warning to residents July 6.
Tempers were reported to be heated at a Town Hall meeting July 5, where over 1,000 locals turned out to hear what was being done about the flood.
In the meantime, at least two class action suits have already been filed against Coffeyville Resources and related companies. Danny Dunham v. Coffeyville Resources, filed in U.S. District Court, seeks damages in excess of $75,000 for each class member, and claims that over 200 properties were destroyed by “uncontrolled waterborne poisons.” It was filed by the Wichita firm of Hutton & Hutton. Another class action, Western Plains Alliance LLC v. Coffeyville Resources, was brought in the District Court of Montgomery County. Western Plains is the owner of the local Jump Start convenience store. Robert Sullivan, senior partner of Polsinelli Shalton Flanigan Suelthaus PC, a Midwest-based firm with 300 attorneys, is a Coffeyville native. The suit was brought in conjunction with Scovel, Emert, Heasty & Chubb of Independence, Kan. It also seeks claims of more than $75,000 per class member.
Coffeyville has some $1.25 billion of insurance, according to local reports. Eames told Green Markets that the company has adequate insurance, but that it cannot divulge details of its coverage. June SEC filings indicate the company has a pollution legal liability aggregate limit of $50.0 million, subject to a $1.0 million self-insured retention. This policy covers cleanup costs resulting from pre-existing or new pollution conditions and bodily injury and property damage resulting from pollution conditions. It also includes a $25.0 million business interruption sub-limit, subject to a ten-day waiting period. In addition, it has a financial assurance policy that provides a $4.0 million limit per pollution incident and an $8.0 million aggregate policy limit related specifically to closed RCRA units at the Coffeyville refinery and the Phillipsburg terminal. The filing said that each of these policies contains substantial exclusions, and as such, the company cannot guarantee that it will have coverage for all or any particular liabilities. Note this section does not indicate if this is the extent of the insurance, so the $1.25 billion could be correct.
The owners of Coffeyville Resources (Goldman Sachs and the Kelso Funds) have been seeking to sell $375 million in stock in the company under the name CVR Energy Inc. (GM Archives). The New York Stock Exchange approved the listing June 28, according to a recent SEC filing. As for the status or future of the IPO, Eames told Green Markets that “right now management is focused entirely on recovering our refinery and nitrogen fertilizer plant operations Beyond that, we are in an SEC mandated quiet period, so I cannot comment on the IPO.”
