Violations of environmental laws carry substantial risk of fines for violations, whether or not the violation was negligent. On August 5, a cleanup crew of Region 8 of the US Environmental Protection Agency breached a debris dam at the Gold King Mine. This is a major environmental event. Public and agricultural use of downstream waters has stopped as communities have declared states of emergency.
If a private entity had been responsible for it, EPA and the Department of Justice would seek substantial fines and penalties, and perhaps file criminal charges, especially for its delayed an incompetent reporting. Suppose EPA were subject to fines and penalties. How large might they be?
The scope of EPA’s liability as a private entity is difficult to understate.
First, the size of the blowout is large, and much larger than EPA originally said it was. On August 7, the Agency reported 1 million gallons spilled (Sec 18.104.22.168). EPA subsequently confirmed that the blowout exceeded 3 million gallons. The revised figure came from the U.S. Geological Service, not EPA.
Second, the scale of potential environmental damage and adverse effects on human health is vast. Mine waste containing heavy metals spilled into Cement Creek, which flows south to merge with the Animas River in Silverton, Colorado. The Animas flows south through Durango to meet the San Juan River in Farmington, New Mexico. The San juan is a majority tributary of the Colorado River before the Colorado empties into Lake Powell.
Third, EPA apparently delayed reporting the blowout to state and local officials. It was four days before Colorado Gov. Hickenlooper declared a state of emergency, by which time the blowout had already crossed the New Mexico border. New Mexico Gov. Martinez did likewise, and chastised the EPA:
“I had the chance to see the blowout with my own eyes. It is absolutely devastating, and I am heartbroken by this environmental catastrophe,” Governor Martinez said. “As I’ve said before, I am very concerned by EPA’s lack of communication and inability to provide accurate information. One day, the blowout is 1 million gallons. The next, it’s 3 million. New Mexicans deserve answers we can rely on.”
Fourth, EPA appears to have been slow to collect data and update reports. The most recent addition to the list of incident documents is dated August 10, but that document is dated August 7 and it includes the incorrect 1 million gallon figure for the magnitude of the blowout. As for data, only a few observations are reported in a format (PDF of s spreadsheet) that makes analytical use impractical. Background concentrations are not included.
For a similarly situated private entity, each of these factors would argue in favor of fines and penalties of increasing severity. The only mitigating factor in EPA’s favor is it did not deny liability — the Agency published links to Standard Form 95, which injured parties must complete to file damage claims against the government under the Federal Tort Claims Act.
While the FCTA generally imposes the same liability on the federal government as a private party would bear, there are important limitations. And liability claims that the government pays come from the Treasury Department’s Judgment Fund, not from EPA. So, as a matter of economics, the Agency has a substantially weaker financial incentive to avoid liability than it would face as a private entity.
Finally, liability for damages is not the same thing as fines and penalties for misconduct. Congress included them in environmental laws to deter undesirable behavior, but parties exempt from fines and penalties cannot be thereby deterred.