Norfolk Southern to Pay U.S. $310 Million for East Palestine Accident

Norfolk Southern has agreed to pay more than $310 million to settle claims and cover costs stemming from the February 2023 derailment of a freight train carrying hazardous materials in an Ohio town, the federal government said on Thursday.

The Department of Justice and the Environmental Protection Agency said the settlement, which still needs to be approved by a federal court, requires Norfolk Southern to improve rail safety and pay for cleanup costs and health and environmental monitoring in and around East Palestine, Ohio, where the accident happened.

On a Friday night in early February last year, 38 rail cars on a Norfolk Southern train derailed, 11 of which were carrying hazard materials like vinyl chloride, a chemical used to make plastics. Days later, emergency responders, fearing an explosion, decided to release and burn vinyl chloride from derailed cars, sending vast plumes of dark smoke over the town. Hundreds of residents were evacuated and life in East Palestine was upended for months. There were no deaths.

Michael S. Regan, the administrator of the E.P.A., said in a statement that the settlement ensured that the cleanup would be paid for by the company and help prevent similar disasters.

“No community should have to experience the trauma inflicted upon the residents of East Palestine,” Mr. Regan said.

The biggest part of the settlement is an estimated $235 million to cover past and future costs relating to the environmental cleanup. About $15 million is a civil penalty related to claims that the railroad violated the Clean Water Act.

“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,” Alan H. Shaw, chief executive of Norfolk Southern, said in a statement.

The company said that it had already set aside money to cover the costs of the settlement. Overall, it expects to pay $1.7 billion, a sum that includes a $600 million settlement of a class-action suit brought by residents and businesses that was announced last month.

The accident highlighted the dangers that freight trains pose and shined a harsh light on the rail industry’s safety practices. Investigators believe the Norfolk Southern train derailed after a wheel bearing overheated.

Last year, federal lawmakers introduced a bill to bolster railway safety that included a requirement for more detectors to identify abnormally hot bearings and issue warnings to railroad employees. But the legislation has not advanced in Congress amid stiff opposition from the industry and lawmakers who support it.

The company’s settlement with the Justice Department and E.P.A. does not clear away all regulatory and legal challenges faced by Norfolk Southern.

The state attorneys general for Ohio and Pennsylvania are still scrutinizing the company and next month the National Transportation Safety Board will release its final report on the accident, which is expected to include recommendations for new safety regulations.

Before the accident, Norfolk Southern’s safety record had been deteriorating. But its accident rate improved markedly last year while those of other large U.S. freight railroads worsened.

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Kim browne

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