Shell Oil, Army to pay $35 million for contamination

By Todd Hartman | The Rocky Mountain News | May 29, 2008

Shell Oil Co. and the Army have agreed to a settlement with Colorado worth $35 million to compensate for decades of environmental contamination linked to chemical weapons and pesticides manufacturing at the Rocky Mountain Arsenal.

The agreement, announced Thursday by state Attorney General John Suthers, ends a lawsuit filed in 1983 over damage to wildlife, soil and groundwater at the 27-square-mile arsenal, an area once considered one of the most polluted spots in the country.

The legal settlement for environmental damages is distinct from a long-running Superfund cleanup of the site, in Adams County northeast of Denver. That work began in the 1980s and is scheduled for completion in 2010. Shell and the Army have spent $2.1 billion removing contaminated soils and scouring polluted groundwater, among other projects.

Under federal environmental laws, polluters can be sued for "natural resource damages" as well as cleanup costs. In the case of the arsenal, Colorado found the work of Shell and the Army killed thousands of birds, contaminated large plumes of underground water, acres of soil and rendered some prairie dogs so toxic they had to be killed by wildlife managers so eagles wouldn't eat them and die of the poison.

The site has been troubling for people, as well. In the late 1980s, Shell agreed to buy five Adams County homes where polluted groundwater bubbled up into yards, tainted drinking water and contaminated livestock. Cleanup workers over the years have stumbled on unexploded bomblets and traces of blistering agents in the air.

The settlement includes $21 million from Shell Oil, $1 million of which involves a land donation of 100 acres near Commerce City. The other $14 million comes from the Army, including a credit of $6.6 million for an already-completed water-treatment plant.

Money will go toward a variety of projects on or near the arsenal site. Part of the money - $10 million from Shell - will be used for projects in the Northeast Greenway Corridor. That's an evolving beltway of open space and trails linking Denver, Brighton, Aurora and Commerce City, with the arsenal as a hub.

Attempts to settle the case had failed over two decades until lawmakers in 2005 began allocating more than $2 million to the attorney general's office to launch a court fight.

Preparation included moving a longtime regulator at the Colorado health department into the AG's office to conduct detailed reviews of how many animals and birds were poisoned by material littering the site.

That might have been enough to get Shell and the Army to the negotiating table. But the deal is also good for Colorado, state officials said, as it saves potentially millions of additional dollars needed for a court fight with an uncertain result.

"Today is the end of a long road," said U.S. Sen. Ken Salazar, who had also worked on settling the case during his tenure as state attorney general from 1998 through 2004. "And it's been a tough road."

Deal at a glance

Natural resource damages $17.4 million total

*Shell Oil pays $10 million Army pays $7.4 million

Northeast Greenway Corridor work

*$10 million (Shell)

Land donation

(First Creek corridor) $1 million (Shell)

Completed water treatment plant

*$6.6 million (Army)

Where it will be spent

* Improving wildlife habitat and stream corridors on or near the arsenal; no specific projects yet.

* Trails, open space and other amenities in the northeast metro area.