The Trouble Behind Milltown Dam 

Montana gets ready to wrestle with its biggest, oldest toxic site

In 1856, a penniless, friendless, 14-year-old Irish immigrant stepped off a ship at New York City and began working his way west to make his mark in the new world. Forty-four years later he died, leaving behind a very big mark indeed: a $75 million fortune and the beginnings of what, a century later, would be the largest toxic mess in the United States.

Eight years after Daly’s arrival in the U.S., in the summer of 1864, gold was discovered in a creek a prospector described as looking like a little “silver bow” shimmering in the sunlight. Gold camps were hastily set up and towns of a rough sort were established as miners arrived to try their luck. By the early 1870s, the Silver Bow and Rocker mines were played out, having yielded some $1.5 million in gold. A few years later silver was discovered near Butte and within three short months Butte grew to become the busiest mining town in Montana Territory.

Initially Daly hoped to work the Anaconda as a silver mine. But two years after he purchased the claim he struck copper ore. Though copper would eventually make him fabulously wealthy, the copper discovery came as an unwelcome surprise. There was no way at hand to process the ore, but the gutsy Irishman didn’t let that get in the way. He built a copper smelter near Butte, and by 1895 his Anaconda Copper Mining Company was the world’s largest copper producer.

Meanwhile, Daly’s business and political rival, William Clark, had purchased Butte’s first silver mine and built the first smelter there in 1876. In 1906 and ’07, Clark, copper king and future U.S. senator, built a dam on the Clark Fork River at the confluence with the Blackfoot some 120 river miles downstream from the Butte and Anaconda mines. The dam would run his timber mill in Bonner, and the timber would be used to power his mines in Butte.

Though Daly and Clark were fierce rivals, they had one thing in common: They both used streams to get rid of the metal waste left over from ore processing. Silver Bow Creek, which flows into the headwaters of the Clark Fork River near Warm Springs, served as a handy disposal system for the wastewater generated at the Butte and Anaconda mines.

It has continued to wash downstream, up against the dam and occasionally down the Clark Fork River.

Daly died in Anaconda in 1900, but the company he founded lived on to become an industrial and political powerhouse in Montana for most of the 20th century. The company was joined at the hip by another industrial giant, the Montana Power Company. They came to be called the “Montana twins,” and so closely bound together were the two companies that for many years, up until 1933, one man, John D. Ryan, served simultaneously as president of both.

In 1977, Anaconda Copper, the company that had dominated Montana’s economy and politics for nearly a century, was bought by the Atlantic Richfield Company, or ARCO. Four years later, world copper prices tumbled and ARCO closed down Marcus Daly’s smelter. By 1983, ARCO was out of the mining business altogether.

Meanwhile, about the time that Montanans were reeling from the announcement that the Anaconda Copper Mining Company was no more, Congress established the Comprehensive Environmental Response and Compensation Liability Act. Better known as Superfund, the act was passed in the wake of the Love Canal toxic waste discovery in New York.

The passage of Superfund also coincided with a different discovery made by a Missoula County sanitarian in 1981. He found that four domestic water supply wells in the Milltown area were contaminated with arsenic. Tests of the sediment from the reservoir behind Milltown Dam in 1982 revealed arsenic levels 10 times higher than what the federal government considers safe for drinking water. The presence of arsenic was enough to land the Milltown Dam on the newly created Superfund clean-up list.

The list and the amounts of heavy metals that came to rest behind Milltown Dam over the years is alarming, but perhaps unsurprising in a state where people and corporations once did business without any environmental laws to hamper them: 2,100 tons of arsenic, 13,000 tons of copper, 19,000 tons of zinc, 143,900 tons of iron, 70 tons of cadmium and 9,200 tons of manganese.

Over the two decades that have passed since arsenic was first discovered in Milltown’s water supply, nothing has been done to clean it up. In fact, the situation has become ever more complex. Corporations, Congress and federal agencies have been thrown into the mix in an effort to place responsibility, absolve blame and devise solutions. New federal studies are now in the works, corporate scrambling to get out from under this mess is going on behind closed doors, and Missoulians have developed their own vision of what could be done with the dam and its de facto dump. Then, somehow, and possibly within a year’s time, all of these opinions will be weighed in to seal the fate of America’s biggest toxic site. But what will that fate be? A Confluence of Interests

Today, the tangled web that is the Milltown Dam Superfund site involves not only ARCO, which bears responsibility for cleaning the sediment in the reservoir, and Montana Power, which owns the dam, but the EPA, the Federal Energy Regulatory Commission (FERC), the U.S. Fish and Wildlife Service, which is charged with protecting the threatened bull trout, and, nominally, the state of Montana.

Compounding the problem of clean-up is the fact that the Milltown Dam sits at the terminus of a large, complex and interconnected Superfund site which includes the Butte and Anaconda mines, the Berkley Pit, the upper Clark Fork River and Silver Bow Creek—places which for many decades weren’t so much towns or rivers, but rather, as one Montana historian has noted, “corporate assets”—dumping grounds for Anaconda Copper. The many polluted sites are geographically connected but are so politically complex that they’ve been broken up into individual Superfund sites, the Milltown Dam being but one. The Superfund solutions to the Berkley Pit, et al, will have a direct bearing on the health of the lower stretch of the Clark Fork River.

Tracy Stone-Manning, executive director of the Clark Fork Coalition, is concerned that splitting the massive clean-up effort into different projects, though understandable given the immensity of the problem, may result in a piecemeal plan that doesn’t tie all the pieces together. “Our concern is that they won’t [tie it together],” she says. “We have a systemic problem and we have to make sure EPA addresses the systemic problem.”

The Clark Fork Coalition and the Missoula County Board of Commissioners have made it clear they want the dam and the contaminated sediment behind it removed. But is sediment removal technically possible? Russ Forba, the EPA’s project manager for Milltown Dam, says it is. Mechanical and hydrological dredging of the river can be done, he says. The sediment would then have to be put in a repository somewhere in Missoula County; it cannot be transported to a hazardous waste site out-of-state. At least two sites, possibly more, have been identified as potential repositories where the sediment would be dumped into a lined landfill.

Removing the sediment from the lower reservoir area, combined with removal of the dam, is the Clark Fork Coalition’s preference. ARCO, which is owned by BP Amoco, would bear the cost of what the EPA refers to as Alternative 7A, estimated at anywhere between $93 million and $196 million. Despite BP Amoco’s 2000 profits of $12 billion, ARCO is balking at removing the sediment.

Sandy Stash is ARCO’s vice president. “We don’t think that remedy fits the Superfund criteria at all,” she says. Dredging would only stir up the metals, making the river and reservoir even more toxic than they are now, she says. Better to let sleeping metals lie. Besides, she adds, sediment removal would take years, perhaps decades to complete. “You’re talking about a multi-decade project,” Stash notes. “When you look at the long-term and short-term risks, I don’t think people have thought through where that material would be moved.”

A related problem is the fate of the dam itself. Montana Power holds an extension on its federal license to operate the dam. That extension is scheduled to expire at the end of this year, according to the Clark Fork Coalition. If the EPA decides that the dam should not be removed as part of the clean-up process, then it will be up to the Federal Energy Regulation Commission (FERC) to decide if the dam should be decommissioned, and if so, how. That re-licensing process would take place next year.

Montana Power Company, which at this point bears no responsibility for clean-up, nevertheless wants to get rid of what surely is the company’s number-one liability. To that end, Montana Power, which sold its generating plants, is now in the process of offloading Milltown Dam onto NorthWestern, a Sioux Falls, S.D., company that has agreed to take the dam as a condition of its purchase of Montana Power’s transmission lines.

Montana Power spokesman Cort Freeman says the deal with NorthWestern “is moving along just fine. We just need approval from the FERC.”

NorthWestern doesn’t need the dam to go with the transmission lines, Freeman says, but the dam is a liability Montana Power doesn’t want, and if NorthWestern wants the transmission lines, it must also take the Milltown Dam. “You take the bad with the good,” as he puts it.

It’s a liability no one wants, but NorthWestern and its stockholders are willing to take it on. Company spokesman Paul Wyche says NorthWestern stockholders have been informed that the company plans on buying into the nation’s largest Superfund site. “We have advised them, and we’ve fully advised our board and members of Wall Street,” he says. “Of course, we have to do that by law. That’s not optional.”

Meanwhile, Montana Power’s Freeman and ARCO’s Stash, neither of whom want to see their companies stuck with any part of this huge mess, have seen a silver lining in the dark cloud that is the Milltown Dam. The energy crisis sweeping California and parts of the West may breathe new life into the aging dam, and both Stash and Freeman are now talking up the dam as a possible energy supplier.

Freeman dismisses the significance of the dam sale to NorthWestern as “a small part of the overall transaction.” But he adds that the problems caused by utility deregulation in California and Montana have elevated the dam’s importance in the West’s overall energy picture.

And it’s changed the dynamics of the Superfund clean up, says Stash. “The picture of this situation has changed drastically over the last year,” she says. “I don’t think we should be underplaying [the dam’s] importance to the grid.”

Freeman suggests that the dam, which generates 3.2 megawatts of electricity, could supply, say, St. Patrick Hospital or Smurfit-Stone Container with enough energy to suit their power needs. “This dam is in primo shape,” Freeman says, noting that it saw significant improvements in 1987 and ’89. “What if St. Pat’s wanted to buy power from that plant and keep costs down to the community? What if Stone Container says, ‘We’ll buy power [from the dam] and keep 40 jobs?’”

Freeman and Stash both say that their companies have been approached by various unnamed third parties interested in taking over operation of the dam. Freeman says he doesn’t know the identity of the parties, but hints that ARCO, Montana Power or both might pay another company to take the dam off their hands. For her part, Stash says she knows the identities of the interested parties, but declined to name them, other than to say they are from Montana and from outside the state.

For his part, the Clark Fork Coalition’s conservation director and staff attorney Clifford scoffs at the notion that a third party would ever take over operation of the Milltown Dam given the facts: It holds back a Superfund site like no other, it cannot possibly produce enough energy to make it profitable to someone, and it leaks. The bottom line is, he says, that both companies are desperate to offload the dam. “Imagine a $100 million dam [construction] project,” he says. “They’d be jumping all over it.” Water Over the Dam

Then there is the pike problem. The low water level on the upstream side of the dam has created the right conditions for the proliferation of pike, an aggressive, predatory species of fish that outcompete trout. If the dam is allowed to stay in place as part of the EPA’s clean-up plan, the dam must still be upgraded to meet the feds’ high hazard criteria. It also would have to include fish ladders to help trout get to their upstream spawning grounds. But as Clifford points out, fish ladders will do little good if young trout have to run the “pike gauntlet” at the reservoir to get from their spawning grounds to the mainstem downstream. Young trout, he says, have been found in the bellies of pike. And on top of that, he adds, is the fact that any federally mandated upgrades would not address the leaks to the dam that were recently identified. “There’s another whole set of impacts just because the dam is there,” he says.

Stone-Manning criticizes the idea of leaving the dam in place—particularly one specific proposal to modify the dam with a “pneumatic crest” or a rubber dam to manage ice flows—as deeply flawed. For her, the plan inspires memories of the dam’s most recent near-disaster: In the winter of 1996, when a huge ice jam was bearing down on the old dam, panicked Montana Power officials ordered an emergency drawdown of the reservoir in an effort to stop the ice flow; the contaminated water that flowed through the dam and downstream sent copper and zinc levels soaring.

“Let’s play ’96 all over again and there’s an ice jam coming down the Clark Fork and the owners have a $12 million pneumatic crest at risk,” Stone-Manning says. Montana Power, or whoever the dam’s owners may be, won’t risk their investment, but would likely do what Montana Power did in the same situation five years ago—draw down the reservoir and let the metal-laden sediment wash down the Clark Fork.

And, she adds, there is no such thing as a “no action” alternative, which the EPA lists as Alternative 1, “because there are other players involved.”

Though all fingers are pointing at ARCO, do Montanans bear any of the responsibility for cleaning up the legacy left to us? Generations of Montanans, after all, benefited from the jobs created by the Anaconda and Butte mines. And Americans in general use the metal products produced by those mines. Should the clean-up costs be shared by ARCO and the people of Montana? Stone-Manning thinks about the question. “I think ARCO bears the brunt of the clean-up,” she says. “But pragmatically speaking, it might make some sense to come up with creative solutions.”

The Clark Fork Coalition backs what is probably the most creative solution to come out of the Milltown Dam problem: The Two Rivers Restoration and Development Project, developed by Missoula County Environmental Health Supervisor Peter Nielsen. The project calls for removing the dam and sediment to create a whitewater park with riverside trails and fishing pools.

Says Stone-Manning: “Our vision for Milltown extends beyond Superfund clean-up. We think the potential for the confluence of these rivers is so much greater than that. BP Amoco and ARCO say they’re all for the environment. Well, step up to the plate.”

The idea of a riverside park has the endorsement of the Missoula County Commissioners, but, curiously, not of the Bonner Development Group, which wants the dam and sediment left in place. Bruce Hall, executive director of the Group, is reluctant to go on the record about his group’s position on the possibility of dam removal because, he says, he’s been misrepresented by the press. But he was willing to take a chance with the Independent.

The Bonner Development Group has worked for years to develop its community, and has had some notable successes. The Town Pump complex, which includes a restaurant and bank on Interstate 90 were all brought to Bonner by the Group. But despite what appears to be an economic success, the three buildings provide only a fraction of the town’s tax base. The Milltown Dam, on the other hand, accounts for 15 percent of the taxes that support the Bonner School District—nearly $200,000 a year—a healthy amount for a small school district. When Champion International owned the Bonner mill, the company provided 46 percent of the town’s tax base. When Stimson bought the mill, he says, the new company successfully protested those taxes, bringing their share down to 22 percent of the overall tax base.

In other words, says Hall, Bonner, especially the Bonner School District, cannot afford to lose the dam.

“If you remove the dam, you remove 15 percent of the tax base to the schools,” he says. “So it would be a little counterproductive to support a plan that would hurt this community economically.”

The Two Rivers plan has other weaknesses as well, Hall says. A whitewater park probably wouldn’t attract as many people as a “flat water” riverside park, he posits. And Missoula County Commissioners have not said how such a huge project would be funded. “I don’t know that there’s any notion of how this will be paid for,” Hall observes.

More important to the people of Bonner, he adds, is the concern that restoration dollars would likely flow into Missoula and its schools, not into Bonner.

Though Hall says his Group will not take a position on sediment removal, he sounds suspicious about that aspect of the clean-up project as well. Sediment removal could take 10 to 20 years, he says. That’s a long time for Bonner to go without a replacement tax of some sort. In any case, he says, “that’s not our decision.”

The Bonner Development Group has received $240,300 from ARCO in the form of corporate grants, but Hall says the company is not calling the shots for the Bonner Development Group. “The only way I can assess that is, we were up and running for a year and half before we ever received money from ARCO,” he notes. Plus, the Group also has received money from other entities, including state and federal agencies, but ARCO has given more than any other contributor—$183,300 more than its second-largest donor, the state of Montana.

“I don’t know how you assess those values,” he says. “There are guiding forces, and these guiding forces are not any more directed by corporate forces.”

Hall says his organization is also put off by the fact that “special groups” have developed the clean-up and restoration plans without the presence of the other “key players”—namely, Montana Power, ARCO and the EPA. He emphasizes that Missoula County cannot develop a restoration plan for the Milltown Dam without the involvement of corporate and federal agencies.

The EPA is in the process of developing a final set of alternatives for the Milltown Dam. That report should be released this month. The public will then have an opportunity to comment. Stone-Manning calls the public comment period the most important time frame in the entire process, because from those public comments will come the proposal, which, possibly by the end of the year, will yield the official Record of Decision—the final word on the fate of the Milltown Dam.

“If Missoula is quiet, [the EPA] will think, ‘Well, they like our idea.’ That’s when they need to hear from us,” she says. “I think when more people are informed, that’s when they’ll say it’s not a job well done until the dam is removed. Do we let nature hold sway, or do we have something to say about it?”

The Milltown Shuffle

The alternatives, and how we got stuck with them

Superfund mandates the rehabilitation of hazardous waste sites with federal money if the Potentially Responsible Parties—or PRPs in Environmental Protection Agency lingo—can’t be located, or no longer exist. If the PRPs can be found, they must pay for the clean-up themselves.

Though the Montana Power Company has owned the Milltown Dam since 1929, the company is off the hook. Russ Forba, the EPA’s project manager for Milltown Dam, says simply that Montana Power is exempt from liability. The EPA’s attorney, Henry Elsen, points out that Congress amended the Superfund law in 1986 so that a holder of a federal dam license could not be identified as a PRP. But the Clark Fork Coalition’s conservation director and staff attorney Matt Clifford is more to the point: The 1986 amendment was not a blanket amnesty for any federal dam license holder that also just happened to be a Superfund site; it was done specifically to absolve the Montana Power Company—holder of the license for Milltown Dam—from any liability. The amendment was passed at the request of Montana’s congressional delegation.

That leaves ARCO holding the bag for the clean-up—if, indeed, there ever is one. Alternative 1: No further action Cost: $5.4 million to $16.6 million Alternative 2: Modification of dam and operational practices Cost: $7.3 million to $19.3 million Alternative 3A: Erosion/scour protection Cost: $16 million to $43.5 million Alternative 3B: Modification of dam and operational practices with channelization Cost: $43.9 million to $91.1 million Alternative 4: Periodic sediment removal Cost: $31.2 million to $69.2 million Alternative 5: Dam removal, partial sediment removal with channelization Cost: $57.6 million to $152.7 million Alternative 6A: Total sediment removal (lower reservoir area) Cost: $85.9 million to $187.5 million Alternative 6B: Total sediment removal (entire reservoir area) Cost: $139.3 million to $298.7 million Alternative 7A: Dam removal and total sediment removal (lower reservoir area) Cost: $93.2 million to $196 million Alternative 7B: Dam removal and total sediment removal (entire reservoir area)Cost: $148.6 million to $325.2 million

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