Well hell

Austin Marshall stands before a hostile crowd at the Crowne Plaza Hotel in Romulus.
The hefty man knows many of the 75 or so people in the room by name. Especially
R.P. Lilly, whom Marshall calls a “formidable” foe.

Lilly smiles and thanks his cordial enemy for the praise. Others are not so polite. Some
curse the vice president of the Birmingham-based Environmental Disposal Systems, which wants to inject up to 50 million gallons of hazardous waste a year into two 4,700-foot-deep wells it has constructed in Romulus on the south side of I-94 between Ecorse and Wick roads. They are the first for-profit hazardous waste wells ever to be built in Michigan.

Marshall, who has been with EDS about seven years, is used to combative crowds.
His half dozen security guards patrol the hotel conference room as Marshall gives a
brief presentation at the July meeting.

The townsfolk have heard it all before; they pelt him with pointed questions. Lilly asks
how the company intends to pump 50 million gallons of waste annually when the hazardous waste wells at an Ohio facility average about 35 million gallons a year.

“What do you know that they don’t know?” asks Lilly, a retired steel-manufacturing manager who lives in New Boston, about two miles from the wells.

Like many residents, Lilly staunchly opposes the deep-injection wells, which have been in the works for more than a decade. Well foes argue that they are not needed since liquid hazardous waste has dramatically decreased in the United States in the past three decades. They also fear that the waste, which is to be injected into an ancient rock formation about a mile beneath the earth’s surface, will eventually contaminate drinking water.

Whether the wells are safe is just part of the controversy.

Residents resent how the company has forced the project on Romulus, along with surrounding communities, which has rejected it nearly since its inception. And they are extremely suspicious of the state Department of Environmental Quality, which regulates such wells, since DEQ ignored its own site-review board, which had advised against the project.

The cast of characters, past and present, involved in the project — one with a tarnished environmental record, another who went to jail — adds to the anxiety.

But casting the largest shadow— and making the Romulus wells a political hot potato — are its financial backers. Public records show that the Detroit Policemen and Firemen Retirement System loaned EDS about $12 million. Before he was elected mayor of Detroit, Kwame Kilpatrick, then a state representative, openly opposed the wells. When he was a legislator, Kilpatrick told his former colleague, state Rep. Raymond Basham, D-Romulus, who is fighting the wells, that he talked to police and fire board pension members about their investment. The board votes on how the more than $3 billion pension fund is invested. But now that he is mayor, Kilpatrick has backed off and stopped returning Basham’s calls.

It’s not clear why. Mayoral spokesperson Jamaine Dickens says that Kilpatrick still opposes the wells, “but since he became mayor he is focusing on the most pressing issues in Detroit, which are balancing the budget and proposing casino agreements.”

Kilpatrick wants the community to contact him and bring him up to speed on the issue, says Dickens.

He says that Basham and his constituents should “contact the appropriate person in the mayor’s office, who is the government liaison to the mayor. At this point that has not occurred.”

That response surprises Basham: “We’ve done all that. There is not anyone in the mayor’s office or on the City Council who does not know that this is my number-one issue. The mayor needs to work with us. Detroit comes to state legislators regularly to bail them out on issues, and we’ve been there for him and he has not been there for us.”

Basham and others also are curious about those who may profit from the wells. Attorney Michael Timmis — a major GOP donor who has ties to the governor — stands to earn millions of dollars if the wells succeed, according to internal EDS documents. Well foes wonder how Timmis got involved and what his role has been. Timmis did not return Metro Times’ phone calls. EDS declined to comment on questions in calls and faxes from Metro Times.

Basham and others believe details of EDS’s relationship with partners are contained in documents that the pension board won’t release. Basham has been in a legal battle with the public body, which was ordered by a Wayne County Circuit Court judge in June to release the records. It has not done so.

Pension board member Mark Knowles says that ruling will be appealed.

So far, no one has made a penny off the wells. Though DEQ has granted EDS a permit, the state must also issue an operating license, which is why Marshall was at the Crowne Plaza Hotel last month. The public meeting was a necessary licensing step. EDS also needs a hazardous waste disposal permit from the U.S. Environmental Protection Agency. If the EPA issues the permit, which it could do within a month, the state will grant the license. The wells could be pumping hazardous waste by the end of the year.

The technology

Deep-injection wells were first constructed in the 1940s to dispose of oil, gas and salt brine. The federal government didn’t start regulating them until the 1970s. Michigan developed its regulatory program in 1972.

Currently, there are five active hazardous-waste wells in the state. All are private, owned and operated by the companies that produce the waste. EDS’s facility would be the first in the state to profit by disposing of other people’s waste, including customers from other states and Canada. If the EPA approves the permit, the company will be allowed to take all types of hazardous refuse except for nuclear and low-level radioactive waste.

Each of the wells would inject contaminants about 5,000 feet below the earth’s surface into the Mt. Simon formation, mostly sandstone that is at least 550 million years old.

The Mt. Simon formation stretches from Wisconsin to Georgia to New York. Its depth and width vary. The theory is that billions of gallons of waste can be injected into the rock and remain there for thousands of years. In fact, to receive a federal permit to inject hazardous waste, an operator must prove that the contaminants will not migrate for 10,000 years.

Bob Whiteside of Houston, Texas, has constructed deep-injection wells for 30 years. Some call him the nation’s foremost expert.

Whiteside believes that deep-injection wells are the safest way to dispose of liquid hazardous waste. The concept is simple, he says: Waste is treated to remove solid material so that it won’t clog the well. It is then pumped down a mile-long steel shaft that is cemented into the rock formations.

Whiteside’s company tracks the number and types of wells operating in the United States for the Groundwater Protection Council, a nonprofit group made up of regulators and industry representatives. There are 121 wells nationwide. Of those, only 15 are commercial wells that accept waste from paying customers. It costs between 2 cents and 40 cents a gallon to dispose of liquid hazardous waste in wells. Wastewater treatment of hazardous liquid costs between 50 cents and $4 a gallon, according to Whiteside.

He says about 94 percent of the hazardous waste injected into wells in the United States is pumped into private wells; the other 6 percent goes into commercial wells.

In 1972, he says, more than 13 billion gallons of hazardous liquid waste were injected into disposal wells in this country. Waste-reduction programs have trimmed that total to about 9 billion gallons today.

The only commercial waste wells in the Midwest are located in Vickery, Ohio, about 75 miles from Detroit. Those wells, owned by Waste Management Technologies, pump about 35 million gallons of waste annually into the Mt. Simon formation. About 40 percent of the waste injected in the facility’s four active wells comes from Ohio, the rest is from all over the United States and Canada.

Plant manger Steve Lonneman says his permit allows him to dispose of up to 126 million gallons a year.

He says there have been no problems at the Vickery plant in the 13 years he has been there.

But there were problems that predated Lonneman. An employee reported that the company had accepted waste that its permit did not allow. State and federal regulators and the company agreed to shut down the facility and asked Whiteside to inspect the wells in 1983. He says there were some flaws with the wells, but nothing that endangered the public.

However, citizens sued over noxious odors, apparently from open lagoons that held the waste until it was injected.

Separate lawsuits filed by state and federal regulators produced a settlement with the company, which resulted in $30 million in well upgrades and other costs.

Ray Vugrinovich, a DEQ geologist who helps monitor Michigan’s waste wells, says Michigan’s five wells have been operating since about 1975 without any evidence of groundwater contamination or other environmental problems.

Florida has not been so lucky. Suzie Ruhl, president emerita of the Legal Environmental Assistance Foundation in Florida, has tracked waste wells for 20 years. She says the EPA has documented that waste from three Florida facilities had reached drinking water.

“It was a confirmation of our concern,” says Ruhl.

There was no clear evidence that the tainted water harmed anyone. But Ruhl says it’s difficult to trace an ailment to a particular well and its waste. The EPA’s response to contaminated drinking water was not to shut down the wells, but to propose changing long-standing environmental rules that would legalize the migration of injected waste into the drinking water, she says.

The proposed rules have not been finalized. Ruhl says the government must encourage waste reduction and recycling programs so that fewer deep wells are needed.

Winona, Texas, also had problems with hazardous waste wells. Buoyed by $6 million in public funds, Gibraltar Chemical Resources built a plant and the wells in Winona in 1983. In its 14 years, the operation racked up 740 errant emissions and 400 notices of violations.

“Our wells took in most kinds of chemicals,” says Phyllis Glazer, who was instrumental in initiating a lawsuit that shut down the facility in 1997. “They can eat through rock and the steel tanks that hold them.”

After the facility and wells opened in the small community, residents developed mysterious ailments, including birth defects, skin rashes, breathing disorders and cancer. Women had miscarriages and farm animals had spontaneous abortions, Glazer says.

Although the facility closed, the wells are now used to clean up the site’s contaminated groundwater.

Winona residents and employees of the facility sued under a nuisance law because of the odor.

“People who lost children got less than the cost to bury them,” says Glazer.

The players

R.P. Lilly has been tenaciously fighting the EDS project since he first learned about it in 1993. The next year, Lilly found a box on the hood of his wife’s car that contained a severed bobcat head along with a note ordering him to back off, or “next time we will deliver your wife’s or one of your grandchildren’s heads.”

The incident, which caught the attention of national media and the FBI, did not scare the 67-year-old grandfather. In fact, threats only deepened his resolve.

He has collected about 30 boxes of documents, many of which come from the Detroit Policemen and Firemen Retirement System. But the public body stopped releasing records to Lilly a few years ago.

“They said I was using them against them,” says Lilly, who would share the documents with reporters. That practice produced some juicy stories, including one that disclosed how EDS president Doug Wicklund initially partnered with John Runko, who was expected to help finance the wells and market them. Runko has a poor environmental record. More than a decade ago, an Oakland County landfill he owned leaked chemicals into groundwater. Taxpayers were stuck with about $17 million in cleanup costs

Although the Wicklund-Runko partnership dissolved in 1991, Runko’s former wife, Kristine, is listed as one of the top five shareholders in the project, according to EDS’s 1999 disclosure statement.

In 1993, Jeffrey Eagan became a general partner with Wicklund. They borrowed money — $5 million initially — from the Detroit Policemen and Firemen Retirement System. About four years later, Eagan pleaded guilty to defrauding a Michigan company’s meat packing pension fund of $2.5 million; former Tigers pitcher Denny McClain also was indicted in the case. Eagan received a 15-month sentence. Though he is no longer a partner, Eagan is a guarantor of the loan from the retirement system.

EDS asked injection-well guru Bob Whiteside to be part of the well project, but he declined.

“Deep wells are not cheap,” he says. “The vast majority of hazardous wells are owned by Fortune 500 companies.”

Whiteside says the cost to get a permit, build a well and the facilities to store and treat the waste can be as high as $17 million.

“That does not include staff, so you are talking an awesome amount of investment,” he says.

EDS won’t make any money without customers. So far EDS
doesn’t have any contracts, according to Marshall.

Whiteside says waste producers are particular about where they inject it because they remain liable for the waste even after it is disposed of. Companies want to be assured that the well owner can cover their liability costs in case they are sued for contamination, says Whiteside.

Does EDS have that kind of money? That depends on the Detroit Policemen and Firemen Retirement System, whose loans to EDS have grown to $12 million, at a 17 percent annual interest rate. A 1999 agreement between EDS and the retirement system says that the interest rate goes up 1 percent for every additional $1 million borrowed.

David Littman, chief economist for Comerica Bank, says the 17 percent interest rate is “prohibitively high. We are having to restructure in the banking industry so interest rates are less than half of that.” He says the rate is akin to a “junk bond.”

“To pay back the loan, they will have to take the mean stuff,” Lilly says of EDS. He fears that the
company will take waste that it shouldn’t.

The Ohio wells already present EDS with stiff competition.

And two commercial wastewater treatment plants in Detroit also treat waste for a fee, extracting hazardous chemicals and putting the water back into the sewerage system.

John Cannon, president of Dynecol Inc., one of the Detroit commercial wastewater treatment facilities, says two other treatment operations in southeast Michigan closed in the past decade because there was not enough liquid waste to sustain them.

EDS is posting a $27,600 surety bond to cover the costs of plugging each of the wells in the event something goes wrong, according to the EPA. The state requires only $25,000. But Whiteside says it would cost far more — $350,000 and another $10,000 a year to monitor it.

A lot of cash

Anthony Soave — who was in the waste business for decades before he sold his company, City Management Corp., a few years ago for an undisclosed amount — is expected to get 6 percent of the well royalties for 15 years, according to EDS documents. Soave was brought into the project in 1992 to treat and store the waste. Although EDS has since constructed its own storage and treatment facilities, Soave would still get his 6 percent cut, which could amount to about $2 million over a 15-year period, according to EDS’s 1999 business plan. Fred Marx, spokesman for Soave Enterprises, LLC, confirmed that Soave stands to get 6 percent, but says he has no involvement in the wells and did not invest in them.

“He has no management or oversight in the project,” says Marx.

It’s not clear why Soave would get a return on a company in which he has made no investment or has no involvement.

But what most astounds Lilly is the huge sum attorney Michael Timmis’ Detroit law firm, Timmis & Inman, PLLC, would receive if EDS makes the profits it projects. In exchange for legal services, EDS has agreed to pay Timmis $4 million to $12 million over a 15-year period, according to EDS documents.

Lilly wonders how the law firm, which entered into an agreement with EDS just five years ago, cut such a sweet deal. It is especially curious, he contends, since two other law firms, Beier Howlett and Fredrick Hoops, which have been shepherding the company through legal battles for about seven years, are slated to get no more than $500,000 and $200,000, respectively.

“They have been doing all the legwork but get chump change compared to Timmis,” says Lilly.

Lilly’s theory is that Timmis, who has close ties to the governor, lobbied Engler to have the project approved by DEQ. There is no evidence to support the theory. Timmis contributed thousands of dollars to Engler, was an honorary chair of his 1997 gala fund-raiser and was appointed by the governor to Wayne State University’s Board of Governors in 1991 for a four-year term.

Timmis did not return Metro Times’ calls.

Matt Resch, the governor’s deputy press secretary, says that Lilly is wrong. “The process of the DEQ, when it comes to permitting any project for whatever purpose, DEQ employees are professionals, they are not Engler appointees,” Resch says. “They take their jobs very seriously. They are not governed by politics.”

Lilly suspects Timmis’ role might be spelled out in the documents the pension board has refused to release. So does state Rep. Basham.

When Basham requested documents, the pension board told him it was not a public body and that the records were privileged. State Attorney General Jennifer Granholm issued an opinion stating that the retirement system is a public body and that the records must be turned over. But the pension board refused. Basham then sued the retirement system in Wayne County Circuit Court.

Wayne County Circuit Court Judge Cynthia Stephens ruled last month that the retirement system is a public body and that Basham is entitled to the documents. He still has not received a single document.

Pension board attorney Ronald Zajac says he does not discuss pending litigation. Pension board member Mark Knowles, who is also the president of Local 344 International Association of Fire Fighters, says the ruling will be appealed because the pension board is not a public body, but “an investment house.”

He adds that the wells are safe. “There ain’t no way we would jeopardize anyone’s well-being,” says Knowles. “We spend our lives protecting people. We are not going to pollute for some bucks.”

Denial denied

In 1999, EDS applied for a permit to construct a hazardous treatment and storage facility on site. The permit requires that a site-review board determine if it should be granted. Before Engler became governor, site-review board rulings were binding. But early in his administration he made them advisory.

The board set up to review the EDS permit was the first one employed under Engler’s reign; considering what transpired, it had no impact on the process.

For months the board reviewed EDS’s permit application, other related documents, and listened to testimony from both EDS and those who opposed the wells project.

“Everyone gave it their best shot,” says Romulus City Councilwoman Debbie Romak, who was elected to the council in 1995 on an anti-well platform.

In a 5-4 vote, the review panel recommended that the permit be denied. The review board stated that the risk of accidents involving waste-hauling vehicles was too high. It also concluded that Romulus’ volunteer fire department lacked staff, training and equipment to handle hazardous-waste emergencies. The board stated that there is overwhelming evidence that the wells are not needed since there is already a huge surplus of hazardous waste disposal capacity in the region.

“The evidence was undisputed and admitted to by EDS,” according to the review board’s statement.

But Russell Harding, DEQ’s director, ignored the board’s recommendation and issued the permit. It marked the first time ever that a site-review board determination was ignored.

“The MDEQ possibly considered our rejection, but it didn’t have any effect on them,” says Wayne County Commissioner Edward Boike Jr., who served on the board and voted to deny EDS the permit.

The public was outraged by Harding’s decision. Some, including Romak, claim that Harding had made up his mind long before the review board issued its opinion — and before EDS officially applied for the permit. Romak says Harding told the Romulus City Council in a private meeting that he intended to issue the permit to EDS regardless of what the site-review board decided. When Romak went to the press, Harding said that his statement was taken out of context.

But Basham also says that Harding told him — before EDS even applied for the permit — that he planned to issue it regardless of the site-review board’s recommendation. “He said, ‘Cut your best deal because it’s going to happen,’” says Basham about Harding.

Where’s Kilpatrick?

Wayne County and the cities of Romulus and Taylor have sued the state for issuing the permit. They argue that building a hazardous-waste facility on wetlands is illegal.They also say that the DEQ was required to establish rules that take into consideration the location, capacity and need for the waste wells, which it didn’t do, says attorney Neil Silver, who represents Taylor. Wayne County Circuit Court Judge Amy Hathaway dismissed the case last year, but the Michigan Court of Appeals agreed to hear it. No date has been set. Some, like Romak, are not optimistic that the lawsuit will be successful.

She says she’s also lost hope in Kilpatrick, whom she feels has abandoned the community.

Basham says that before be was elected mayor, Kilpatrick attended town hall meetings and vowed to help shut down the wells. He has the power to at least pressure the pension board to stop funding the project since the mayor appoints three voting members to the 17-member board, which has 11 voting members. Detroit Councilwoman Alberta Tinsley-Talabi is also a voting member who recently replaced former Council President Gil Hill. One seat on the board is reserved for a council member. Tinsley-Talabi did not return Metro Times’ calls.

Pension board members vote on how their $3.6 billion in assets is invested.

“If the money goes, the wells go,” says Basham.

But Kilpatrick has not said or done anything about the wells since he was elected mayor.

Last month, U.S. Rep. John Dingell, who represents Romulus, wrote Kilpatrick a letter in an attempt to get him to act. “Last year you stood with me and our fellow state representatives from this region in opposition to the proposed EDS hazardous waste deep injection well, and I hope you will join me in sending a strong signal that the legitimate concerns of our region’s citizens, as validated by the DEQ’s own Site Review Board, must not be ignored,” Dingell wrote.”

Dingell also contacted U.S. Secretary of State Colin Powell in April to determine if pumping the hazardous waste into the ground violates environmental treaties between the United States and Canada. That investigation is under way.

At the meeting last month, Romak and others questioned Marshall about how the hazardous waste injected in the well would be affected by another company’s bid to extract salt brine from the Mt. Simon formation less than a mile away. Marshall didn’t know. Sun Pipeline, which stores liquid propane in caverns beneath the earth, applied for a permit to extract brine from the Mt. Simon rock after EDS was granted its permit.

Romak and others hoped that Sun Pipeline might throw a monkey wrench in EDS’s plans. However, Sun Pipline’s permit was denied by the DEQ, which said salt-brine extraction would make it impossible to inject hazardous waste. Sun Pipeline says it will appeal the decision in Wayne County Circuit Court.

In the meantime, the City of Romulus will not provide EDS electricity until the legal action it took against the company is resolved, says Romak.

She hopes that will drag out until after the November election.

“I’m holding out for a new governor who cares about the people,” says Romak.

Ann Mullen is a Metro Times staff writer. E-mail [email protected]
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