Norfolk Southern Bashed for ‘Incompetence’ as EPA Leads Cleanup

Biden administration and state officials on Tuesday cranked up the heat on Norfolk Southern Corp. for its handling of the fiery freight train derailment in Ohio, as federal authorities took control of cleanup operations and two state governors raised the specter of prosecutions in conjunction with the disaster.

Watch: The Ohio train derailment could cost Norfolk Southern millions of dollars.

Source: Bloomberg

Under a formal order issued by the Environmental Protection Agency, the company will be required to conduct cleanup operations in accordance with an EPA work plan and pay for the remediation costs. The company has two days to respond to the directive, which marks the federal government’s strongest move yet to address the disaster.

“It is my view that Norfolk Southern wasn’t going to do this out of the goodness of their own heart. There’s not a lot of goodness in there,” Pennsylvania Governor Josh Shapiro said at a news conference. “They needed to be compelled to act.”

In an emailed statement Tuesday, Norfolk Southern said it is “committed to thoroughly and safely cleaning the site,” while “reimbursing residents for the disruption this has caused in their lives.”

“We are going to learn from this terrible accident and work with regulators and elected officials to improve railroad safety,” the company said.

Norfolk Southern has come under withering criticism for its management of the incident, which began when a freight train derailed near the Ohio-Pennsylvania border on Feb. 3. After toxic chemicals including vinyl chloride were released at the site and local residents were briefly evacuated, there have have been lingering complaints of animal deaths, headaches and other ailments.

Both Shapiro, a Democrat, and Ohio Republican Governor Mike DeWine, said their state attorneys general are reviewing the matter, potentially raising the prospect of criminal charges. DeWine said his attorney general “will take whatever action Ohio law allows him to take.” And Shapiro said Pennsylvania’s Department of Environmental Protection had sent a criminal referral to the state’s acting attorney general.

“In the face of Norfolk Southern’s arrogance and incompetence, I want you to know that we are fighting back,” Shapiro said. “We stand with the good people of Pennsylvania and Ohio, and we stand with them against this corporate greed and incompetence.”

Under the new EPA order, Norfolk Southern is obligated to follow an agency-approved work plan in conducting cleanup and remediation operations — and if it fails to do so, the company could be forced to pay triple the costs. The directive also compels the company to participate in public meetings at EPA’s request and post information online.

“In no way, shape or form will Norfolk Southern get off the hook for the mess that they created,” EPA Administrator Michael Regan said, calling the order one of the agency’s “strongest authorities to hold a company accountable for jeopardizing a community’s health and safety.”

Regan’s Tuesday visit to East Palestine, Ohio — where he and DeWine sipped water from local supplies in a show of confidence — comes amid criticism of the Biden administration’s response to the disaster, including its deployment of agency heads to the site. Transportation Secretary Pete Buttigieg has vowedto strengthen regulation of high-hazard flammable trains in the aftermath of the accident. Meanwhile, President Joe Biden is under pressure to visit.

Norfolk Southern said it already has committed more than $6 million to East Palestine, including $3.8 million in direct financial assistance to more than 2,400 families.

Shares of the company fell 1.6% as of 2:44 p.m. in New York trading.

To contact the reporter on this story:
Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story:
Simon Casey at scasey4@bloomberg.net

Sophie Caronello

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