Alcoa 2013 Annual Report Download - page 139

In October 2012, the EPA selected a proposed remedy from the alternatives included in the June 2012 Analysis of
Alternatives Report and released a Proposed Remedial Action Plan (PRAP). The alternative selected by the EPA
recommends capping PCB contaminated sediments with concentration in excess of one part per million in the main
channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one
part per million. This alternative will result in additional estimated costs above that of the alternative recommended by
Alcoa in the June 2012 Analysis of Alternatives Report. As a result, Alcoa increased the reserve associated with the
Grasse River by an additional $128 in 2012 to reflect such additional estimated costs of the EPA’s proposed remedy.
The PRAP was open for public comment until November 29, 2012.
The EPA completed its review of the comments received in early 2013 and, on April 5, 2013, issued a final Record of
Decision (ROD). The ROD is consistent with the PRAP issued in October 2012, which reflected the EPA’s selection of
a remediation alternative estimated to cost $243. No further adjustment to the reserve associated with Grasse River was
necessary due to the EPA’s selected alternative as this amount was previously fully accrued. At December 31, 2013
and 2012, the reserve balance associated with this matter was $241 and $243, respectively. Alcoa is in the planning and
design phase, which is expected to take approximately two to three years, followed by the actual remediation fieldwork
that is expected to take approximately four years. The majority of the project funding is expected to be spent between
2016 and 2020.
Sherwin, TX—In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part
of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing
environmental conditions, as well as a pro rata share of the final closure of the active bauxite residue waste disposal
areas (known as the Copano facility). Alcoa’s share of the closure costs is proportional to the total period of operation
of the active waste disposal areas.
In 2012, Alcoa received a technical analysis of the closure plan for the active waste disposal areas and an operating
plan for the Copano facility from Sherwin Alumina Company, both of which were needed in order to develop a closure
cost estimate, including an assessment of Alcoa’s potential liability. It was determined that the most probable course of
action would result in a smaller liability than originally reserved due to new information related to the amount of
storage capacity in the waste disposal areas and revised assumptions regarding Alcoa’s share of the obligation based on
the operating plan provided by Sherwin. As such, Alcoa reduced the reserve associated with Sherwin by $30 in 2012.
At December 31, 2013 and 2012, the reserve balance associated with Sherwin was $35 and $36, respectively.
Approximately half of the project funding is expected to be spent between 2014 and 2019. The remainder is not
expected to be spent in the foreseeable future as it is dependent upon the operating life of the active waste disposal
areas.
East St. Louis, IL—In response to questions regarding environmental conditions at the former East St. Louis
operations, Alcoa and the City of East St. Louis, the owner of the site, entered into an administrative order with the
EPA in December 2002 to perform a remedial investigation and feasibility study of an area used for the disposal of
bauxite residue from historic alumina refining operations. A draft feasibility study was submitted to the EPA in April
2005. The feasibility study included remedial alternatives that ranged from no further action to significant grading,
stabilization, and water management of the bauxite residue disposal areas. As a result, Alcoa increased the
environmental reserve for this location by $15 in 2005.
In April 2012, in response to comments from the EPA and other stakeholders, Alcoa submitted a revised feasibility
study to the EPA, which soon thereafter issued a PRAP identifying a soil cover as the EPA’s recommended alternative.
Based on this recommendation, Alcoa submitted a detailed design and cost estimate for implementation of the remedy.
A draft consent decree was issued in May 2012 by the EPA and all parties are actively engaged in negotiating a final
consent decree and statement of work. As a result, Alcoa increased the reserve associated with East St. Louis by $14 in
2012 to reflect the necessary costs for this remedy.
On July 30, 2012, the EPA issued a ROD for this matter and Alcoa began the process of bidding and contracting for the
construction work. The ultimate outcome of negotiations and the bidding of the construction work could result in
additional liability. On November 1, 2013, the Department of Justice lodged a consent decree on behalf of the EPA for
123