07/19/2007

Kolke settlement crumbles

State backs out on agreement

BY SHERI McWHIRTER

smcwhirter@record-eagle.com

GAYLORD — State officials reneged on a settlement with a conservation group and riparian property owners in a case that involves a northern Michigan stream and an energy company's plan to dump wastewater into it.

A tentative settlement agreement fell apart this week among the energy company, the state and plaintiffs in a legal battle over Kolke Creek and a groundwater pollution cleanup project in Otsego County's Hayes Township.

Merit Energy received state approval to daily dump 1.15 million gallons of treated wastewater into the creek, but the Anglers of the Au Sable group and two nearby property owners filed a lawsuit to halt that disposal method.

Judge Dennis Murphy, of the 46th Circuit Trial Court, ruled against the state and Merit, saying their discharge plan would permanently alter and be detrimental to the environment. He later awarded $155,000 in expert witness fees to the plaintiffs.

Now the state and Merit are appealing the judge's ruling and backing out of the $125,000 settlement, negotiated just last week. Both filed appeal claims with the Michigan Court of Appeals on Monday.

Bob McCann, spokesman for the Michigan Department of Environmental Quality, said they don't believe the cleanup project can proceed as the judge ordered. Officials investigated and learned that permits cannot be issued for an alternate method, aerial dispersal on a nearby 40-acre parcel owned by Merit, he said.

"We are left without any other option now, so it throws this back to the point where we're asking the court to take another look at it,” McCann said.

Lansing attorney Charles Barbieri, who represents Merit, could not be reached for comment. Last week he said he could not comment on the case.

The state's decision troubled the plaintiffs.

"The DEQ has shown its true colors. It wants to support and help defend the oil industry to do whatever it wants at the cost of Michigan's pristine trout streams and the environment,” said Rusty Gates, president and founder of Anglers of the Au Sable.

Plaintiff attorney Jim Olson of Traverse City said his clients are not disheartened by the appeal. Rather, "they are more committed than ever to preventing this environmental injustice,” Olson said.