AlcoaSaga Part 3: Alcoa’s record of environmental stewardship inflames passions of its opponents

by Keith Barber

A well funded public relations campaign aimed at influencing public opinion regarding Alcoa’s record of environmental stewardship of Badin Lake and the Yadkin River has served as a central component of the aluminum maker’s efforts to retain control over the water rights to a 38-mile stretch of the Yadkin River for another 50 years.

The people who support a government takeover of Alcoa’s dams want you to believe that the company has not done a good job taking care of the Yadkin River,” reads a flyer recently sent out to Stanly County residents. “But when you see the largely undeveloped shoreline with bald eagles and blue herons soaring overhead, you’ll know the truth: Alcoa has been a responsible steward of these beautiful lakes.” The mailer goes on to say that as part of the re-licensing process, Alcoa Power Generating Inc., a subsidiary of Alcoa, has reached an agreement with the state to invest $240 million to improve water quality and upgrade the company’s four hydroelectric dams on the Yadkin River.However, in September, Alcoa spokesman Mike Belwood announced the company and the NC Department of Environment and Natural Resources had reached an agreement to reduce the bond amount for the hydroelectric dam upgrades — the installation of dissolved oxygen enhancing equipment — from $240 million to $80 million.Belwood made the announcement on the first day of an administrative law hearing involving a lawsuit brought by Stanly County and the Yadkin Riverkeeper against NC DENR for the state agency’s issuance of a water quality certificate as part of Alcoa’s application to the Federal Energy Regulatory Commission for a new 50-year license.On Sept. 10, Administrative Law Judge Joe L. Webster heard arguments from both sides during a hearing for summary judgment.James P. Longest, the lawyer representing the YadkinRiverkeeper, made the case that the NC DENR Division of Water Quality did not perform its duty of protecting the public health when it evaluated the 401water quality certification.

“An [environmental impact statement] was prepared but it was not part of the Division of Water Quality’s decisionmaking process,” Longest said.

Longest, a Duke Law School professor, disputed Alcoa’s claims, contained in their 401 application, that the hydroelectric project did not involve the use of state land or the expenditure of public monies.

“We would assert that the uncontradicted evidence shows that’s not correct,” said Longest. “The bed of the Yadkin River is, in fact, state land; always has been.”

Thomas N. Griffin III, the lawyer for Stanly County, made the argument that there were three “toggle switches” that summed Stanly County’s argument that the NC Division of Water Quality did not perform its constitutional duty to protect the public health.

“The first toggle switch is, Did DWQ review alternatives to the dissolved oxygen enhancement alternatives proposed by Alcoa? Yes or no? Did they do it? The answer is, ‘No,’” Griffin said. “The second toggle switch is with the issuance of a certification. Did the agency allow a situation to exist where there will be continued non-compliance with our state’s water quality standards for many, many years into the future? Yes or no? The answer is, ‘Yes,’ they did. The toggle switch is in the ‘Yes’ position.”

And the third question — whether or not DWQ substantively evaluated the actual ecological impact of all the water quality issues in the Yadkin project — represented the last toggle switch.

“The answer is, ‘No,’ and there’s testimony to that effect,” Griffin said. “You’ve got three answers and in each of those cases, it then goes back to you, Your Honor, to decide what does the law say on those three facts.”

Charles Case, a lawyer for Alcoa, refuted Longest and Griffin’s interpretation of state law, saying that DWQ “got it right.” Case said the 401 water quality certification process effectively gives the state veto power over any project. Case disagreed with Longest and Griffin’s claim that the NC Environmental Policy Act applies to the DWQ’s certification process. One of the reasons NCEPA doesn’t apply is “the project does not have a significant environmental impact,” Case said.

State law dictates that NCEPA may be triggered in a permitting process whenever specific criteria are met. The criteria include the expenditure of public monies or use of public lands, which includes submerged public bottom lands or riverbeds, or if the project has a potential environmental impact “that may result in a potential risk to human health or the environment.”

A source within Alcoa Power Generating Inc. told YES! Weekly that the company has experienced problems with at least one of its dams in the Yadkin Hydroelectric Project and those problems could pose a significant environmental and public health risk. The source, who requested anonymity due to concerns about job security, said Alcoa has had a longstanding problem with hydraulic oil and mechanical grease leaching into the Yadkin River.

“I know they’re trying to do everything in their power to keep oil out of the water, but I can tell you that they have let oil get in the water,” the source said. “It’s probably an insignificant amount compared to the amount of water going through there — we’re talking millions and millions of gallons of water so you won’t see a sheen on the water.”

The source explained that within each hydropower turbine there are shafts that contain blades with seals at the bottom.

“Either the seal leaks or gets old and cracks but oil gets out of it,” the source said. “Sometimes you could lose 55 gallons at a time; you have to go back and add oil to it. I don’t know how much damage this oil is doing. It’s not like you dump 55 gallons at one time, but it goes right in the river.”

The source added that the design of the hydropower dam, which was built in the late 1950s, has not been altered to protect seepages of potential toxins into the river.

On one occasion, the source said, APGI workers had to take apart one of the three hydropower units when it malfunctioned and realized the unit had leached nearly 2,000 pounds of grease into the Yadkin River. Once another 2,000 pounds of grease and gallons of oil were added back to the unit, it was “put back identical to the way it was built in 1960.”


Compliance issues

Thomas Griffin warned of NC DENR creating a situation of “continued non-compliance with our state’s water quality standards” by issuing the 401 water quality certification to Alcoa during the court hearing. A letter from Marcia Allocco, a regional supervisor for NC DENR, to Mark Gross, the plant manager for Alcoa’s Badin Works facility, lends credence to Griffin’s words.

In the letter dated May 20, 2010, Allocco informs Gross that a review of Alcoa’s February self-monitoring report reveals a cyanide violation at one of the company’s outfalls.

The company exceeded the amount of cyanide allowed by its permit — 46.6 micrograms per liter — by nearly four times —170 micrograms per liter.

Yadkin Riverkeeper Dean Naujoks pointed out this isn’t the first time this year Alcoa has been cited for leaching cyanide into the Stanly County watershed.

“Poisonous cyanide is now leaching into Badin Lake and into Little Mountain Creek that flows into Lake Tillery from years of Alcoa dumping,” Naujoks said. “The ground water is saturated with it and it will be a problem for years but DENR has done nothing to address this problem.”

Susan Massengale, a spokesperson for the NC Division of Water Quality, said DENR did not take any enforcement action against Alcoa for the February cyanide violation because the company remedied the situation. In a letter to NC DENR, Gross reported that Alcoa diagnosed the problem as the result of a faulty “float switch” within the pumping system. The switch was repaired and a preventative maintenance program was implemented to prevent a future recurrence, Gross said.

Massengale explained that the NC DENR must put its full faith and confidence in companies like Alcoa to perform self-monitoring because the state simply doesn’t have the resources to do independent environmental monitoring.

“We have thousands of these permits,” Massengale said. “The state would not have the resources to go do testing for every single one of these [companies] and all the of parameters they have tested.”

Due in part to the state’s inability to conduct its own independent environmental study of Badin Lake, Stanly County paid John Rodgers, a professor at Clemson University, to analyze contamination of polychlorinated biphenyls, or PCBs, in fish and soil samples taken from Badin Lake near Alcoa’s facility last year. Rodgers linked the PCBs found in fish and soil samples taken from Badin Lake to PCBs produced by Alcoa’s Badin Works facility.

The state issued a fish consumption advisory for Badin last year due to elevated levels of PCBs found in largemouth bass and catfish. Alcoa attempted to block the advisory by filing a legal appeal, but the company’s claim was denied and the warning remains in effect.

PCBs are a probable carcinogen and can cause anemia, acne-like skin conditions, damage to the liver, stomach or thyroid gland, changes in the immune system or reproductive system and behavioral problems, according to the NC Department of Health and Human Services.

The source inside Alcoa who spoke to YES! Weekly said they have never been given the opportunity to speak freely with state or federal environmental regulators about the violations they’ve witnessed inside the company’s hydroelectric dams.

“It’s been a game of hide and go seek with Alcoa with their employees for years and years,” the source said. “People from FERC come through there; the state [regulators] come through there. You don’t get a chance to talk to them because company officials escort them. If you talk to them, you’re standing right there with a company person, so what are you going to say?” Alcoa spokesman Mike Belwood defended the company’s record of environmental stewardship.

“Alcoa’s been in business in North Carolina for nearly 100 years and we have a responsible environmental record,” Belwood said. “Over the years, as new information has become available about our operations, we’ve studied the impacts of our emissions and we’ve communicated openly and honestly with regulatory bodies and the public, and we’ve taken appropriate action to address environmental and health issues working very closely with regulators and the community.”

YES! Weekly sent a number of questions toBelwood after gleaning information from publicdocuments from state and federal regulatoryagencies. YES! Weekly asked if Alcoa dumpedPCBs along rail lines adjacent to its BadinWorks facility at any time during the company’s90 years of operation in Stanly County?YES! Weekly also asked the following questions:Does Alcoa implement pre-treatmentmeasures for cyanide before discharging intothe municipal sewage system of Badin andAlbemarle? If so, what measures are beingtaken? In the National Pollution DischargeElimination System permit issued by the NCDWQ, it states that there is cyanide and fluoridepresent in the groundwater seepage fromthe Alcoa-Badin Landfill. It also states thatAlcoa’s plan is to divert the seepage to theBadin wastewater treatment plant by the end of2005. Has this been done? On July 6, Bill O’Rourke, Alcoa’s head ofenvironmental health and safety, spoke to theNC Senate Judiciary II Committee regardingthe company’s record of environmentalstewardship. When Sen. Fletcher Hartsellasked if Alcoa had epidemiological documentsshowing a high incidence of kidneyand/or bladder cancer in the employees at theBadin Works compared to the population as awhole, O’Rourke said, “We do not.” However,YES! Weekly obtained internal Alcoa memosthat reveal a 1996 study involving Alcoaemployees “to determine if certain parts of thealuminum production process increased therisk of our workers for kidney cancer.” YES!Weekly asked: Can you explain the discrepancybetween O’Rourke’s comments and the informationcontained in the Alcoa documents?

alcoa_letter.jpg YES! Weekly also obtained an internal Alcoadocument dated Aug. 21, 1978 regardingemployees’ exposure to coal tar pitch volatiles(CTPV). The memo, composed by RWWrenn, suggests requiring “mandatory respiratoryprotection for those receiving excessiveexposures” to coal tar pitch volatiles and thatthe need to decrease employee exposure toCTPV’s should be self-evident. YES! Weeklyasked: What measures if any did managementat the Badin Works facility take to protect itsemployees from exposure to CTPVs? Canyou e-mail YES! Weekly copies of the relevantdocumentation?And finally, YES! Weekly asked: Is APGIstill disposing of its spent transformer oilthrough the turbine of its dams and into BadinLake? Belwood gave a flat rebuttal to all thequestions submitted by YES! Weekly:“The information you have is nothing morethan the output of a campaign by private interests,lobbyists and politicians to take Alcoa’sprivate property, which the company purchasedand developed with its own funds,” Belwoodsaid. “This kind of government takeover of privateproperty sends a terrible message to anybusiness located in the state or thinking aboutlocating in the state.” Framing the issueFraming the issue as a government takeoverof private property has clearly been part ofAlcoa’s public information campaign. In themailer sent to Stanly County residents, Alcoacharacterized the Rodgers’ study of PCBcontamination as part of the Stanly CountyCommissioners’ plan for a government takeoverof the Yadkin Project. However, in its application for a new50-year license, Alcoa acknowledges Section14 of the Federal Power Act, which “reservesto the United States the right to take over anon-publicly owned project upon expiration ofthe license.”Under federal law, if the US governmenttakes over the Yadkin Project, Alcoa will bereimbursed for its net investment plus “severancedamages.”In the re-license application, Alcoa estimatesits net investment at the four dams at $24.16million. Alcoa also estimates that the power theYadkin Project produces is worth $43.6 millionannually. Alcoa’s 50-year license was granted in 1958and expired two years ago. The company hasbeen operating with a provisional license forthe past two years. Alcoa curtailed its aluminumsmelting operations in 2002 and closedthe facility in 2007.Roger Dick, a banker and community activistin Stanly County, pointed out that the stategovernment intervened on Alcoa’s behalf withthe federal government 50 years ago becausecompany promised to bring 900 permanentjobs to the area. Now the jobs are gone, andAlcoa should return the resource of the YadkinRiver to the people of North Carolina, Dicksaid. “If the state could recapture the resource, it’sa got a double bottom line,” Dick said. “Theycould sell the power at market rates and theyalso get jobs. In other states, industries seek outareas with inexpensive power.” Economists agree that one manufacturingjob adds three to four additional jobs to thelocal economy, Dick said. Stanly County’sunemployment rate is 10.4 percent, significantlyhigher than the state average of 9.1 percent,according to the NC Employment SecurityCommission.

If the state does not recapture the water rights to the Yadkin, it will add to the state’s growing budget deficit, and place a greater burden on all North Carolina taxpayers.

“The hidden tax is the wealth of the river being taken from us quietly and subtly,” Dick said. “We’re losing all the industry that would like to come here and use this cheap energy resource. It’s shameful for people to be struggling financially and to be so rich in natural resources.”

The Alcoa source that spoke to YES! Weekly said if Alcoa is granted another 50-year license, Stanly County will wind up on the short end of the stick.

“The county’s not going to get anything out of it,” the source said. “[Alcoa] is going to send their money to Iceland; they’re going to send it to Saudi Arabia to build plants there. Our superintendent has made that comment on several occasions. I don’t want to hear about what they’re doing in Saudi Arabia; I want to see the jobs come to the United States.”

In 2007, Alcoa officially opened Fjarda’l, an aluminum smelter at Reydarfjordur in eastern Iceland, according to the company’s website. The project represents Alcoa’s first new primary aluminum facility in 20 years. Alcoa is also building aluminum smelting facilities in Saudi Arabia and in the Amazon.

Alcoa’s lawyers have worked as interveners and helped frame NC DENR’s defense in the 401 water quality certification case, which Naujoks views as a significant conflict of interest.

“It is troubling DENR continues to work side by side with Alcoa in this case, the polluter they are supposed to regulate,” Naujoks said. “In my opinion this is a major conflict of interest. They seemingly can not do anything to Alcoa because they don’t want to give the appearance they are at odds with Alcoa.”

Massengale denied there is a conflict of interest in Alcoa’s lawyers working in tandem with the NC DENR’s lawyers.

“Say you see a car accident and you are asked to come to court to testify on the conditions that surrounded that event and you decided to drive 65 in a 35, you’re still going to get a ticket for speeding,” Massengale said. “In the same way, the NPDES permit program is separate from this 401 water quality certification that’s being discussed. I think we certainly have the ability to enforce clean-water regulations and through our permitting program while some other action is being discussed in this other venue.”


Helen Hammonds watched her husband, William, fight for every breath as he was dying of cancer. An avid angler, Helen said William often enjoyed fishing at Badin Lake and eating his daily catch. Then one day, William was told he had a rare form of non-Hodgkins lymphoma.

“When we asked the oncologist why he got this particular type of cancer, ‘Was it something he had done or something he could have avoided?’ And she said, ‘No it was nothing that you did. This type of mutation is caused by a type of environmental toxin,’” Hammonds recalled.

Hammonds said William’s blood tests revealed four specific congeners, or identifying markers, that could be traced to Alcoa’s aluminum smelting operations. Helen said she contacted NC Sen. Stan Bingham, who put her in touch with Sen. Fletcher Hartsell. Helen was shown Rodgers’ study, which revealed a link between the PCBs found in William’s blood and those discharged into the water supply by Alcoa’s Badin Works operation.

“You could’ve knocked me over with a feather when they said they were the exact same PCBs, had the same congeners, the same identification as the ones at Badin Lake that belong

to Alcoa,” Hammonds said. “So am I angry? Oh Lord yes, I’m angry because my husband clawed for every breath. He fought hard and he lost.