Galax, Virginia (Platts)--9May2012/535 pm EDT/2135 GMT

Four environmental groups, including the Sierra Club, filed a federal lawsuit Wednesday against two subsidiaries of eastern US coal producer Alpha Natural Resources, alleging operations in West Virginia are discharging selenium levels above state and federal water-quality standards.

The groups alongside the Sierra Club -- Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy and Coal River Mountain Watch -- are also alleging in the suit that the operations of Marfork Coal and Independence Coal are violating surface mining laws and that a Marfork-operated slurry impoundment is a potential hazard because of possible dam failure.

Selenium is a toxic element that causes reproductive failure and deformities in fish and other forms of aquatic life, and is discharged from many surface coal mining operations across Appalachia, the groups contend.

The groups, represented by attorneys Derek O. Teaney and Joseph M. Lovett of Lewisburg, West Virginia-based Appalachian Mountain Advocates, filed the suit in US District Court for the Southern District of West Virginia at Huntington.

Among other things, the groups are asking in the complaint that the court order that the defendants pay civil penalties of up to $37,500 a day per violation of effluent limits, and to enjoin Independence and Marfork from conducting operations in violation of federal and state water-quality standards spelled out in permits.

Alpha representatives did not immediately respond to requests for comment Wednesday.

Also, the groups expressed fear that the impoundment could fail and cause a catastrophe: "The Brushy Fork Slurry impoundment is the largest of its kind in West Virginia. The impoundment -- which holds 7 billion gallons of coal sludge and waste from nearby coal operations -- is believed to be the largest earthen dam in the Western Hemisphere. ... Workers have raised significant concerns over the dam's size and structural integrity. Many local residents are deeply concerned about their ability to evacuate safely in case of failure."

The Sierra Club and local environmental groups have filed numerous complaints against coal companies in Appalachia in recent years seeking judicial action against alleged water-quality violations, including selenium discharges. In some cases, settlements have been reached in which coal companies have agreed to spend tens of millions of dollars to build facilities to treat discharges.

--Steve Hooks, steve_hooks@platts.com --Edited by Jason Lindquist, jason_lindquist@platts.com