RICHMOND, Va. (WRIC) — The coal empire owned by the family of West Virginia Gov. Jim Justice could be on the hook for up to $1.2 billion in fines in Virginia. According to a new court filing from the commonwealth, the companies in question continue to violate a cleanup deal over oil spills at eight Virginia mining sites.

Blackstone Energy Ltd., a Roanoke-based company run by Justice’s son, James “Jay” Justice III, reached an agreement with the State Water Control Board in 2020 to resolve “certain violations of State Water Control Law” on unauthorized oil discharges.

The consent order came after the Virginia Department of Environmental Quality found an estimated 5,200 gallons of oil spilled at eight mining sites operated by the company and its subsidiaries in Lee, Wise and Tazewell counties.

Blackstone Energy Vice President Stephen W. Ball signed the order on July 28, 2020, agreeing to several conditions with set deadlines to remediate the land, including excavating impacted soils at the sites and submitting samples showing it has been removed.

But a recent court filing on July 28 in Richmond Circuit Court from the Virginia attorney general’s office and state Department of Environmental Quality claims Blackstone Energy and its subsidiaries never completed the requirements in the order, leaving them open to daily fines for each alleged violation dating back to 2020.

Three years later, Virginia wants a judge to weigh in

The case has been turned over to the office of Virginia Attorney General Jason Miyares, DEQ spokesperson Irina Calos told 8News, “to enforce compliance” with the 2020 consent order’s conditions.

Virginia’s court filing — a “rule to show cause” — seeks to force Blackstone Energy to present to a judge why it is not in violation of the 2020 order and open to potential fines.

In the filing, Virginia pointed to a section of the state code that sets a daily fine of up to $32,500 for each violation, arguing that Blackstone Energy could be on the hook for eight $32,500 fines per day dating as far back as Oct. 1, 2020.

“DEQ has requested that the judge consider additional penalties due to Blackstone’s noncompliance, and the statute authorizes a court to issue a penalty up to that amount for noncompliance with a Consent Order,” Calos wrote in an Aug. 10 email.

An 8News calculation of the daily fines for the alleged violations shows the potential total fine for Blackstone Energy and its subsidiaries at over $1.2 billion ($1,266,200,000) as of Aug. 16.

8News’ attempts to reach Blackstone Energy for this report, including multiple calls and voice messages, were unsuccessful.

Ball, who also serves as general counsel for several of the Justice family’s companies, did not respond to emails seeking an interview or comment for this story. Spokespeople for Gov. Justice did not respond to an email seeking comment from his family’s business.

What led to the cleanup deal with Blackstone Energy?

A&G Coal Corp mining sites in the 2020 consent order between Blackstone Energy and the State Water Control Board. (Map: 8News’ Dean Mirshahi)

A transformer oil spill at a Wise County mine run by A&G Coal Corporation, a Blackstone Energy subsidiary, was reported to the Virginia Department of Environmental Quality on April 26, 2019, according to the consent order.

This led to a series of DEQ visits at eight mining sites run by Blackstone Energy’s subsidiaries A&G Coal Corp., Sigmon Coal Company, Inc. and Black River Coal, LLC between April 29, 2019, and Sept. 24, 2019. These visits took place in Lee, Wise and Tazewell counties.

Virginia State Corporation Commission records online show Sigmon Coal, Black River Coal and Virginia Fuel Corp are inactive companies. James C. Justice III and Jillean L. Justice, the governor’s daughter, were listed as A&G Coal’s presidents in the company’s latest annual report to the commission last November.

Sigmon Coal Company mining sites in the 2020 consent order between Blackstone Energy and the State Water Control Board. (Map: 8News’ Dean Mirshahi)

During the visits, which sometimes included staff from the Virginia Department of Mines, Minerals and Energy and Department of Emergency Management, DEQ staff performed field tests and saw overturned transformers, oil spilled on the ground and copper removed, according to the 2020 order.  

The consent order states 26 transformers at seven of the sites were vandalized, leading “an estimated 5,000 gallons of transformer oil” to spill. The Department of Environmental Quality estimated that an additional 200 gallons spilled at the eighth mining site in Tazewell County, where staff found copper removed from six transformers and stained soil in the area.

Blackstone Energy reported vandalism at one site and submitted documentation of reporting vandalism of three transformers that took place in February 2019 “to the Lee County Sheriff’s Department,” the order states.

Multiple attempts to reach the Lee County Sheriff’s Office for this report — including calls and emails — about any vandalism reported by Blackstone Energy or its subsidiaries during this time were unsuccessful.  

Black River Coal mining site in the 2020 consent order between Blackstone Energy and the State Water Control Board. (Map: 8News’ Dean Mirshahi)

The agreement’s requirements and deadlines

The State Water Control Board in 2020 concluded Blackstone Energy violated state law after the site visits and a review of DEQ files.

The board found the state Department of Environmental Quality didn’t issue permits to the company “for the unauthorized discharges of oil into or upon state waters, lands, or storm drain systems within the Commonwealth.”

The consent order required Blackstone Energy to admit to the allegations from the state, pay a $20,350 fine and complete the following steps:

  • Excavate all impacted soils at each site no later than 30 days after execution of the order (deadline: Oct. 31, 2020).
  • Collect confirmatory samples from each excavation to demonstrate complete removal of all impacted soils at each site and excavate additional soils and collect new confirmatory samples if necessary, no later than 90 days after execution of the order (deadline: Dec. 30, 2020).
  • Submit all sampling analytical results for all sites to DEQ no later than 105 days after execution of the order (deadline: Jan. 14, 2021).
  • Provide manifests and tipping receipts to demonstrate proper disposal of all impacted soils/media generated no later than 150 days after execution of the order (deadline: Feb. 28, 2021).
  • Unless otherwise specified in this Order, Blackstone Energy Ltd. shall submit all requirements of the order (deadline: Oct. 1, 2020).

The Virginia Department of Environmental Quality said Blackstone Energy paid the initial $20,350 fine, but the state claims in its court petition that the company never completed the order’s requirements and could be open to “fines as high as $32,500 per fine, per day.”

“Deterrence can only happen if there is accountability through severe punishment,” Tim Cywinski, spokesperson for the Sierra Club’s Virginia chapter, said in a statement. “Blackstone has demonstrated an utter disregard for the health of our communities.”

Ball outlined Blackstone Energy’s progress with the consent order in an April 13, 2021, letter to DEQ, claiming that two sites were ready to be tested but that cleanup at three others was not complete and more work needed to be done.

“The Company appreciates your Department’s patience as we continue to maneuver weather and manpower-related delays preventing the Company from timely finishing its obligations under the Consent Order,” Ball wrote in the letter obtained by 8News.

But in a follow-up letter, DEQ wrote to Ball that Blackstone Energy’s progress report did not “provide planned completion dates for the outstanding cleanup activities.”

What happens next?

A Virginia court will ultimately decide whether Blackstone Energy will have to pay any additional fines and the total amount, a spokesperson for the attorney general’s office explained to 8News. While fines could total up to $1.2 billion, the court will decide if the company pays more or less.

The Justice family’s coal companies — which were taken over by Gov. Justice’s family when he took office in 2017 — have faced lawsuits over unpaid fines for alleged mining violations, claims of failing to promptly clean up mining sites in Virginia and violating settlement conditions.

Three environmental groups sued A&G Coal Corporation over the company’s reclamation efforts at three large surface coal mines in Wise County, reaching a settlement in January on the cleanup requirements and deadlines.

Matt Hepler, an environmental scientist with Appalachian Voices, one of the groups that sued, did not comment directly on Blackstone Energy in a phone interview with 8News. But he said that delays in cleaning up mining sites could lead to “erosion issues” and nearby waters filling up with sediment.

“Their [Blackstone Energy] record reflects a belief that they have a free pass to pollute,” Cywinski added. “So it’s not unreasonable to expect our oversight agencies to pursue the harshest penalties at their disposal.”