Capital Goods: May 2014

Down and dirty
The threat from coal ash is not new, but fate dealt the governor a bad hand when his former employer spilled massive amounts in a river on his watch.

By Scott Mooneyham

When a big story or scandal breaks, political observers look beyond the news and ask the most important question: “Has it got legs?” They want to know if it will have lasting ramifications. If so, to what extent? Operating in an environment where even the fairly trivial (anyone remember the Thom Tillis college-credentials flap?) warrants a day or two of coverage, it’s easy to get caught up in the moment. Politicians and their handlers may view a bump in their road as Mount Mitchell.

But there are peaks that cannot be scaled without puncturing  political dreams. A mountainous upheaval occurred when coal ash started pouring into the Dan River in early February (cover story, April). Fair or not, the political career most imperiled by the spill was that of Pat McCrory. Imagine a screenwriter pitching a script to a Hollywood producer. It’s the story of a governor facing an environmental catastrophe. With his critics nipping at his heels, the feds launch a criminal investigation. “Here’s the kicker,” the writer would reveal. “The governor worked most of his life for the company that caused the disaster.” He’d probably be laughed out of the office, the producer deeming the 
plot too contrived.

Sometimes real life feels that way. McCrory worked nearly 30 years for Charlotte-based Duke Energy Corp., which operated the coal-fired Dan River Steam Plant in Rockingham County. The company shut it down in favor of a gas-turbine one a few years ago. But coal ash, in a 27-acre reservoir next to the river, remained. When a pipe under the pond ruptured, at least 35 million gallons of gray sludge laced with toxic metals leaked into the river.

It’s not obvious that McCrory, at that point, could have done anything different than he did to improve the situation. His environmental chief, John Skvarla, made public assurances and answered questions. Four days after the spill was made public, McCrory was at the site. He formed a task force to study how to deal with other coal-ash ponds around the state, almost all of them on Duke property. After some initial cautiousness, he berated his old employer. In a letter to CEO Lynn Good, the governor wrote “as a state we will not stand by while coal-ash ponds remain a danger due to their proximity to where so many North Carolinians get their drinking water.” On April 16, he proposed legislation to close the lagoons or convert them to landfills.

Of course, he cannot undo the past. The leak had barely been stopped before criticism rained down on a McCrory administration decision to intervene in a lawsuit brought against Duke by environmental groups over coal-ash pollution. The state reached a settlement with the utility that did not require cleaning up the ponds. A federal prosecutor opened a criminal investigation — subpoenaing records and convening a grand jury — into potential coziness between regulators and Duke. Meanwhile, environmentalists and the governor’s political adversaries reminded voters that McCrory and fellow Republicans had embraced legislation to scale back regulation. However, the most damaging past relationship, which McCrory cannot undo, is his own Duke tenure.

This problem isn’t going away. Even if he or his administration isn’t implicated, the probe could drag on for years. If the feds disappear, the coal ash will remain. Besides its threat to rivers, ash in storage lagoons had been leaching toxic metals into the soil and, potentially, into groundwater. Cleaning it up will take years, even after everyone agrees on how to do it.

In his expected campaign for re-election in 2016, McCrory can point out that his Democratic predecessors as governor ignored the environmental danger for decades. His Democratic opponent most likely will be Attorney General 
Roy Cooper, whose deputies represented state regulators in some of the litigation related to coal ash that is being criticized. Even so, McCrory’s response to the Dan River disaster will require the kind of political skill he didn’t demonstrate during his first year in office. He ran and won as a moderate Republican in 2012 — and North Carolina remains a purple state — but has let a conservative legislature paint him into a corner.

Even his call last month for tighter regulation drew fire from critics, who noted it would not require Duke to remove ash from all its sites — which the utility says 
it doesn’t need to do. In a preview of what we’re likely to see in 2016, the New York-based National Resources Defense Council ran television advertising in March that tried to blame the spill on the governor. The ad concludes, “Pat McCrory has coal ash on his hands.” It will take a while to wash it off.

Scott Mooneyham is editor of The Insider, www.insider.com. Email him at smooneyh@ncinsider.com.