Lincoln mill CEO would lead early cleanup efforts under EPA’s proposed deal

April 17--PORTLAND, Maine -- The CEO of the shuttered Lincoln Paper and Tissue mill would oversee some of the initial environmental cleanup at the site under a proposed deal with federal regulators.

The draft agreement from the Environmental Protection Agency lays out plans for mill CEO Keith Van Scotter to oversee contractors removing radioactive materials, asbestos and other hazardous waste from the site.

The proposal calls for removing a range of hazardous chemicals from the property, including waste oil, papermaking chemicals, asbestos and radioactive materials, including cesium-137 and krypton-85, used in industrial sensors.

If the plan gets EPA's formal endorsement, it will then go to a bankruptcy judge. Once approved by a judge, it calls for the company to complete the initial cleanup within 180 days.

The EPA estimates the initial work will cost about $250,000, based on quotes from local contractors. That's a tiny fraction of the at least $70 million that the EPA estimates the entire job with cost, primarily because of the need for remediation along the Penobscot River.

In addition to $10 million for upland and other areas (p. 4)

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The EPA made that estimate more than a year ago based on a study of the site conducted from 1999 to 2003. A state report concluded late last year that asbestos cleanup alone will cost around $16 million at the bankrupt mill's 38 buildings.

Before asking a bankruptcy court to approve the settlement, the EPA said it will ask for public comments on the proposed deal.

Beyond the cleanup, the settlement could also deliver money to an EPA fund set aside to pay for remediation work. Town officials in March signaled support for designating the property as a federal Superfund cleanup site, but federal officials have not yet proposed its listing, according to the EPA's website.

If the initial cleanup work costs less than $400,000, the bankruptcy estate for the mill would give the difference to the EPA. The agency also reserves a $1.5 million unsecured claim, meaning that it would be in line with that batch of creditors for any payouts.

And if the bankruptcy estate is able to recover more than $500,000, the deal calls for the EPA to get 25 percent of that excess amount, up to $225,000. The EPA would also get half of any insurance payments for environmental cleanup, in excess of $400,000.

The EPA will also get a $50,000 account the bankrupt mill set aside for the Maine Department of Environmental Protection. In a court filing last week, the EPA wrote that regulators have not yet spent any of the $50,000 fund.

Last year, the agency estimated that updating its earlier study of the site would cost up to $675,000 and that a full investigation of the site to come up with a remediation plan would cost $7 million to $8 million.

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