Norfolk Southern will pay $15 million fine as part of federal settlement in Ohio derailment

The federal government has agreed to a modest $15 million fine for Norfolk Southern for last year’s disastrous derailment in East Palestine, Ohio, and the railroad has pledged to pay more than $300 million to complete efforts to improve safety it announced after the accident and address community health concerns.

The Environmental Protection Agency and the Justice Department announced the settlement Thursday — two days after a federal judge signed off on the railroad’s $600 million class-action settlement with residents whose lives were disrupted. In addition to the civil penalty, Norfolk Southern agreed to reimburse the EPA for an additional $57 million in response costs and created a $25 million health care fund to pay for 20 years of medical exams in the community. The railroad will also pay between $25 million and $30 million for long-term monitoring of drinking and groundwater.

“This settlement is historic in many ways and will begin to make up for some of the harm done to the residents of East Palestine. And that would certainly push the industry in the direction we would like it to go,” said EPA Administrator Michael Regan. “Again, if some of these provisions that we secured and locked in were in place, we might not even be where we are today. ”

Regan said the fine is the largest allowed under the Clean Water Act, and the railroad has agreed to continue paying all cleanup costs.

But the railroad will not face criminal charges, and this latest settlement will add nothing to the roughly $1.7 billion in total costs related to the Norfolk Southern derailment, because the Atlanta-based company was already anticipating those costs.

Many residents of East Palestine feel this deal is not enough for a company that just reported a profit of $527 million in the fourth quarter of last year, even with the costs of the derailment. The railroad’s CEO received $13.4 million in total compensation last year.

“Honestly, no amount can fix this, but it should be at least enough to hurt them a little. I’m sure this won’t hurt your bottom line at all,” said Jami Wallace.

But resident Misti Allison said it’s encouraging to see investigations and lawsuits against the railroad begin to wrap up, and cleanup is expected to be done later this year.

“I think this is a big step, but we will continue to make sure the community is united,” Allison said.

Safety improvements that Norfolk Southern has promised to pursue include the addition of 200 more track detectors to detect mechanical problems. It also promised to invest in more than a dozen advanced inspection portals that use an array of cameras to take hundreds of photos of every train car that passes by. The railroad has estimated these improvements will cost $244 million by 2025.

A bill in Congress that would require Norfolk Southern and the rest of the major freight railroads to make more significant changes has stalled, although the industry has pledged to make improvements on its own.

Norfolk Southern officials said they believe the relatively small size of this settlement reflects how much the railroad has already done, including paying $780 million in cleanup costs and providing $107 million in aid to affected residents and communities.

“We are pleased that we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the needs of the community and our mission to be the gold standard of safety in the rail industry,” said CEO Alan Shaw. our promises and invest in the long-term future of the community.”

After Thursday’s announcement, the only remaining federal investigation is the National Transportation Safety Board’s probe into the cause of the Feb. 3, 2023, derailment. That agency plans to announce its findings about what went wrong that night at a hearing in East Palestine, on June 25th. Republicans in Congress have said they may be willing to look at rail safety reforms following this report.

The NTSB previously said the derailment was likely caused by an overheating bearing that was not detected in time by track detectors the railroad relies on to detect mechanical problems. The NTSB chief also said that the five tank cars filled with vinyl chloride did not need to be opened to prevent an explosion because they were actually beginning to cool down, although the fire continued to burn around them.

The railroad is still working to resolve a lawsuit filed by Ohio against it following the derailment.