The Associated Press and The Daily Inter Lake

BNSF Railway is responsible for cleaning up pollution at the Evergreen site of a former oil refinery, a state judge ruled in a decision that could hit the company with a cleanup bill estimated at $32.5 million.

The decision by District Judge Jeffrey Sherlock of Helena came in the first Superfund hazardous-waste case that the Montana Department of Environmental Quality had taken to trial.

The ruling Thursday defines how BNSF or other parties with stakes in Superfund sites are responsible for cleanup, Department of Environmental Quality lawyer Cynthia Brooks said.

"I'd hope this [ruling] means responsible parties like BNSF will recognize the liability, and rather than choose to deny it they will accept that liability, clean up the site quickly and not draw the process out," she said.

BNSF on Thursday indicated strong disagreement with the ruling. The company said it already has spent $5 million on cleanup and "never owned or leased the refinery property."

In a statement, railroad spokesman Gus Melonas said that "BNSF is reviewing the decision and is considering its options in light of the [Montana] court's reliance on a 'related] case presently pending before the U.S. Supreme Court. BNSF is committed to being a good corporate citizen. It has worked and will continue to work closely with Montana Department of Environmental Quality to perform remediation."

The state and BNSF went to trial last March over whether the railroad is responsible for cleanup of the 57-acre property used for an oil refinery from the 1920s to 1963. Soil and groundwater are polluted from the dumping of petroleum products, dioxin and other hazardous material, according to court records.

The site is between Whitefish Stage Road and U.S. 2 just north of the Knife River gravel pit. The property stretches east from the old Kalispell Pole and Timber Co. location to Office Max on U.S. 2.

The polluted area includes the Reliance Refinery site, the former Kalispell Post and Timber Co. yard and the former Yale Oil yard, which has been cleaned up by Exxon Mobil under a settlement agreement. The court previously ruled that BNSF is liable for cleanup at the timber yard site, which is near the Stillwater River.

Sherlock said that BNSF shares at least some of the responsibility for the pollution at the Reliance Refinery site because its rail cars transported oil within the site to where it was dumped on the ground. The railroad also "owned or operated part of the facility where the hazardous or deleterious substances were disposed of," he wrote.

Under Superfund law, a 'responsible party" such as BNSF can be found liable for the entire cleanup at a site, even if it only shared in the ownership or actions that contributed to the pollution.

Brooks said BNSF has denied responsibility for the Reliance Refinery site for 14 years.

The company has done cleanup on part of the property, but the state estimates $32.5 million worth of work remains to remove polluted soil and cleanse polluted groundwater.

"We don't want the taxpayer to have to pay to clean up these sites," Brooks said.

Actual on-the-ground cleanup might not begin until 2010, state officials said last summer.

Parts of the site could take one year to clean up, other parts could take up to 10 years, and some spots are expected to take longer, the state's plan said.

The cleanup work will consist of tilling soil so oxygen can break down some contaminants, using chemical oxidants for the same purpose, injecting neutralizing chemicals into the ground, and removing contaminated soil - some to be reburied in safer spots on the site and some to be taken to special landfills or incinerators elsewhere.

After each segment is cleaned up, it will become available for some type of development.

Kalispell Pole and Timber spilled and leaked petroleum, dioxins and wood preservatives containing pentachlorophenol from 1973 to 1990. Reliance leaked petroleum and lead from 1924 into the 1960s. Yale leaked petroleum from 1938 to 1978.

The aquifer in that area extends from 15 feet below the ground's surface to 120 feet deep.

State calculations estimate that:

n 189,000 cubic yards of soil are contaminated.

n 54 million gallons of groundwater are contaminated in the upper aquifer.

n 2.5 million gallons of groundwater are contaminated in the lower aquifer.

n 190,000 gallons of contaminant are floating on top of the aquifer.

n 3,126 cubic yards of contaminated sludge are on the site.

The state previously named seven companies and agencies - former owners and users of the site - as legally required to help pay for the cleanup.

The Montana Department of Natural Resources and Conservation, Exxon Mobil Corp., Swank Enterprises, Kalispell Pole and Timber, Montana Mokko Inc. and Klingler Lumber Co. earlier signed agreements to help pay.

The state's share at one time was calculated at $7.7 million. The rest is supposed to come from the legally liable private businesses.

The state environmental agency looked at cleanup plans with price tags ranging from $4.6 million to $121 million. All the plans that would cost less than $32 million would not clean up the site to meet the state's legal obligations and standards, state officials said last year.