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environment New Owner of Freedom Industries Must Face Fallout of West Virginia Chemical Spill BY STEVEN MUFSON, WASHINGTON POST It took just one week for Pennsylvania coal mining executive Cliff Forrest, the new owner of Freedom Industries, to discover that one of the six-decade-old storage tanks he had acquired at the end of December was leaking a toxic chemical into the Elk River that supplies water to more than 300,000 West Virginians. And overnight, an obscure corner of the chemical and coal business became headline news. It's not a sexy business. The chemical that leaked is used in a process called "froth flotation." Basically, it creates bubbles that attract fine coal particles. Add a quart of the chemical to a 1,000-gallon-a-minute slurry of coal in the cleansing separation process, and coal mining companies can skim off the particles, dry them and sell them as fuel. It's been a pretty good business niche. Freedom Industries buys and stores chemicals from companies including Eastman Chemical, an international $12 billion business, and Georgia Pacific Chemicals, a unit of the Koch brothers' Georgia Pacific, one of the world's paper product giants. Then Freedom Industries sells to companies such as Alpha Natural Resources, one of the country's biggest coal producers. More than 100 plants in West Virginia use froth flotation. Forrest, through another firm he owns, paid roughly $20 million to acquire Freedom Industries and orchestrate its December 31 merger with four tiny distribution, blending and storage firms that act as middle men between big chemical and big coal companies, 30 www.coalage.com according to a person close to the company but not authorized to speak for it. He added that Forrest just "had the misfortune of buying a plant just before all hell broke loose." Ever since, Freedom Industries has battened down the hatches. It issued a statement on January 10, the day after the spill was discovered, and nothing since. Chief executive Gary Southern, suffering from pneumonia, made one brief and awkward appearance sipping from a water bottle before TV cameras. Two days later, Charles Ryan, the crisis public relations firm Freedom Industries hired, decided it would not represent the company. Newspapers have scoured state records to learn about the company but have found slim pickings apart from the criminal record of a long-departed executive. Crisis management experts said the public reaction of Freedom Industries is not unusual but not a model either. "Mostly what organizations do in these kinds of moments is duck," said Davia Temin, a New York-based media specialist and crisis manager. "They do not come forward. They do not put their CEO forward. And they do not work out of the playbook of good crisis management, probably because they don't have anything good to say." Temin said such companies "go underground, though unfortunately in this case their underground is toxic." And if they're truly avoiding the spotlight, then "tomorrow you will no longer be Freedom Industries, it will be Liberty Industries or Apple Pie Industries." Old Problems In Charleston, critics say that Freedom Industries may have new owners, but it has old problems that needed fixing. The facility, perched on a steep bank of the Elk River, has 13 tanks built in the 1940s and 1950s, said Daniel Horowitz, a spokesman for the federal Chemical Safety Board. The site was formerly used by Pennzoil/Quaker State as a gasoline and diesel terminal. The 35,000- gallon tank that leaked is about 20-ft high and sits on a concrete pad surrounded by dirt. Encircling that tank and some others is a cinder block containment wall with visible cracks in it, Horowitz added. A state Department of Environmental Protection official said the agency found that a clear liquid, thicker than water but not as thick as syrup, had pooled in a roughly 40-ft square and was flowing through a crack in the base of the cinder block wall. The person close to Freedom Industries, which has hired two contractors to help with the cleanup, said the company has emptied the tank and looked inside. He said the bottom of the tank had been pushed inward, suggesting damage from water underneath that froze in the unusually harsh cold earlier that week. He added, however, "there are many, many additional pieces of information needed before anyone knows why the tank failed." That's not stopping the plaintiffs' attorneys, who have already filed lawsuits against Freedom Industries for negligence. They have also named Eastman Chemical, the manufacturer of the licorice-smelling chemical that leaked, and the West Virginia American Water Corp., which kept its intake pipe open and earlier failed to heed recommendations from the state to move a water intake pipe located about a mile and a half downstream from the chemical storage tank site. "It's got broader implications than West Virginia," said Kevin Thompson, a lawyer who filed a class-action suit in federal court against the three companies on Monday, January 13. "There are so many chemicals out there that are not properly characterized. It's only after they dump it in our water and it smells like licorice that we know about it. If it didn't smell like licorice, we wouldn't even know." Many Players Untangling the corporate who's who is complicated. January 2014