NS Agrees to Resolve Federal Derailment Claims, Investigations

(Norfolk Southern Photograph)

Norfolk Southern (NS) on May 23 reported reaching an agreement on a consent decree with the U.S. Department of Justice (DOJ), U.S. Environmental Protection Agency (EPA), and U.S. Department of the Interior (DOI) “to resolve all their claims and investigations” arising from the Feb. 3, 2023, derailment in East Palestine, Ohio.

Under the agreement, which is subject to court approvals, NS said it will “formalize several commitments to address environmental remediation, health monitoring, and rail safety,” including:

• “Paying a $15 million civil penalty and reimbursing the EPA for its full response expenses, which are approximately $57 million through Nov. 30, 2023, as well as subsequent response costs.
• “In addition to completing clean-up of the derailment site, implementing several environmental remediation projects to address pre-existing pollution and to improve water quality in the region. This is estimated to cost $7 million.
• “Continuing monitoring of groundwater and surface water bodies estimated to cost $10 million to $15 million. Additionally, a drinking water monitoring program will be established, which is estimated to cost $15 million over 10 years.
• “Establishing a $25 million Community Health Program that will provide medical exams and mental health services for the community and first responders for up to 20 years.
• “$244 million to be spent on safety initiatives through 2025, as part of the company’s Six Point Safety Plan and investments in safety infrastructure, technology, and training.”

The financial impacts associated with the above, NS reported, “have either been previously estimated as part of the total $1.7 billion recognized in response to the incident through March 31, 2024, or are included as part of the company’s ongoing financial outlook, including those surrounding capital expenditures and overall 2024 outlook.” The Class I said it “continues to pursue insurance reimbursements and third-party claims.”

Additionally, NS said at the core of its response “are significant investments that have been realized to date,” including:

• “Approximately $780 million in environmental response and remediation costs.
• “A recently announced $600 million class action settlement, which along with the community health program under the consent decree with DOJ and EPA, fulfills Norfolk Southern’s promise to address long-term healthcare for residents of East Palestine and surrounding areas.
• “Direct financial support and commitments of $107 million to the community through its Family Assistance Center and investments in the citizens, businesses, and life of the East Palestine and surrounding Ohio and Pennsylvania communities.”

“From Day One, it was important for Norfolk Southern to make things right for the residents of East Palestine and the surrounding areas,” NS President and CEO Alan H. Shaw said. “We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community’s needs and our mission to be the gold standard of safety in the rail industry. We will continue keeping our promises and are invested in the community’s future for the long-haul.”