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

The federal government agreed to a modest $15 million fine for Norfolk Southern over last year’s disastrous derailment in East Palestine, Ohio, and the railroad pledged to pay more than $300 million to support safety improvement efforts that she had announced after the crash that she would complete the project and address the community. health issues.

The Environmental Protection Agency and the Justice Department announced the agreement Thursday — two days after a federal judge signed the $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 establish a $25 million health care fund to pay for 20 years of community medical studies. The railroad will also pay $25 to $30 million for long-term monitoring of drinking water and groundwater.

“This settlement is historic in many ways. And will make up for some of the damage done to the people of East Palestine. And it would absolutely push the industry in the direction we want the industry to go,” said EPA Administrator Michael Regan. “Again, if some of these facilities that we secured and established had been in place, we might not even be where we are today. ”

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

Many residents of eastern Palestine believe this settlement doesn’t do nearly enough for a company that just reported a $527 million profit in the fourth quarter of last year, even with the derailment costs.

“Honestly, no amount of money can ever make up for this, but it should at least be enough to hurt them a little. I am confident this will not hurt their bottom line at all,” said Jami Wallace.

Among the safety improvements Norfolk Southern pledged to make include adding about 200 additional track detectors to detect mechanical problems. It has also pledged to invest in more than a dozen advanced inspection portals that use an array of cameras to take hundreds of photos of every passing train car. The railroad estimates these improvements will cost $244 million through 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, though 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 assistance to residents and affected communities.

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

After Thursday’s announcement, the only remaining federal investigation is the National Transportation Safety Board’s investigation into the cause of the Feb. 3, 2023, derailment. That agency plans to release its conclusions about what went wrong during a crash that evening. hearing in East Palestine on June 25. Republicans in Congress have said they might be willing to look at rail safety reforms after that report.

The NTSB has previously said the derailment was likely caused by an overheated bearing that was not detected in time by the track detectors the railroad relies on to detect mechanical problems. The head of the NTSB also said that the five vinyl chloride-filled tankers did not need to be blown open to prevent an explosion because they actually began to cool even as the fire continued to burn around them.

The railroad is still working on a resolution to the lawsuit Ohio filed against it after the derailment.