By Valerie Volcovici and Brad Brooks
WASHINGTON (Reuters) -The head of the U.S. government's environmental agency said on Tuesday that rail operator Norfolk Southern Corp (NYSE:NSC) must "pay for cleaning up the mess" created when a freight train derailment in Ohio released toxic chemicals into the environment.
The comments by the head of the Environmental Protection Agency (EPA) were echoed by President Joe Biden later on Tuesday. "This is their mess. They should clean it up," Biden said on Twitter.
The EPA also ordered that Norfolk Southern officials attend town meetings about the Feb. 3 spill in East Palestine, Ohio. Last week company officials boycotted a meeting, citing concerns for their personal safety, leaving residents angered.
The EPA order requires Norfolk Southern to submit a work plan for EPA approval for the cleanup associated with the derailment. The wreck resulted in a fire that sent clouds of smoke over the town. Thousands of residents had to evacuate while railroad crews drained and burned off toxic chemicals.
"Let me be crystal clear: Norfolk Southern will pay for cleaning up the mess that they created and for trauma they've inflicted on this community," EPA Administrator Michael Regan said during a press conference in East Palestine.
Biden also said on social media that rail companies have successfully lobbied hard in Washington to slow regulations, and he called on Congress to pass new rail safety measures. "This is more than a train derailment or a toxic waste spill - it's years of opposition to safety measures coming home to roost," Biden wrote.
Norfolk Southern said in an emailed statement that it recognizes its responsibility to "thoroughly and safely" clean up the derailment site and pay for it. "We are going to learn from this terrible accident and work with regulators and elected officials to improve railroad safety," it said.
The company last week said it had established an initial $1 million community support fund and on Tuesday said it has distributed $3.4 million in direct financial assistance to more than 2,200 families to cover evacuation costs.
Norfolk Southern shares closed down 1.6% on Tuesday and have slid almost 11% since Feb. 3.
The derailment took place on the border between Ohio and Pennsylvania.
Josh Shapiro, the governor of Pennsylvania and a Democrat, sharply criticized Norfolk Southern for what he called the company's "corporate greed and incompetence" in being responsible for the derailment and for how the company has responded since. The governor said the company has chosen not to work within the "unified command" of government agencies in the clean-up.
"They created confusion in this process," Shapiro said. "They gave us inaccurate information and conflicting modeling data, and they refused to explore or articulate alternative courses of action when we were dealing with the derailment in the early days."
Shapiro was referring to the decision to drain a toxic chemical from rail cars after the wreck and set it on fire, creating a toxic plume of air. Norfolk Southern did not immediately reply to a request for comment on Shapiro's remarks.
EPA issued the order under the federal Comprehensive Environmental Response, Compensation, and Liability Act, which gives it the authority to force parties responsible for pollution to clean it up.
"I know this order cannot undo the nightmare that families in this town have been living, but it will begin to deliver much needed justice for the pain that Norfolk Southern has caused," Regan said.
Although no fatalities or injuries have been reported, residents have been demanding answers about health risks and blaming Norfolk Southern and state and federal officials for a lack of information.
The EPA will require the company to reimburse the agency for any cleaning services it offers residents and businesses. If the EPA is forced to do any clean-up work that the railroad refuses to do, the agency can force Norfolk Southern to pay triple the cost of those operations, Regan said.
Regan said the agency is taking this action now because the situation has moved from the emergency response phase, during which local and state agencies had the lead, to the clean-up phase, when the federal government takes command.
The agency will also create a unified command structure to coordinate the clean-up related efforts alongside the Federal Emergency Management Agency, the Department of Health and Human Services, Ohio EPA, Ohio Emergency Management Agency and the Pennsylvania Department of Environmental Protection, as well as Norfolk Southern.