The Environmental Protection Agency and its contractors may have to pay millions of dollars in damages after mistakingly releasing toxic sludge that tainted a Colorado river, preventing its use by ranchers and residents.

Mustard-colored water continued to leak Monday from the long-abandoned Gold King Mine in Silverton, Colorado, and into the Animas River, after the EPA said it “unexpectedly triggered” a Aug. 5 blowout. The agency set up a claims process for losses from the 3 million gallons that leaked, three times more than initially estimated.

While the Clean Water Act and environmental rules often exempt federal agencies and clean-up personnel from legal liability, such protections are voided for negligence, or if the clean-up crew triggers a new pollution release.

“It’s certainly a black eye for the EPA,” said Thaddeus Lightfoot, a partner at Dorsey & Whitney in Minneapolis who often represents industry clients facing action by the agency. “If EPA causes this kind of release, they need to be held responsible, just as a private party would be.”

Acidic water burst from the mine as EPA officials dug open the mine portal to investigate the build up of contamination at Gold King. Data released by the agency showed the water contained elevated levels of lead, arsenic and magnesium, all harmful to humans and the environment. The river flows south and into the San Juan River in New Mexico and eventually to Lake Powell.

Navajo Emergency

Federal, state and local officials closed the Animas and San Juan rivers to fishing and boating, and barred water withdrawals for ranching or residential use. The rivers will be closed until at least Aug. 17, local EPA Administrator Shaun McGrath said Monday.

“We’ll have an independent investigation to find out what happened,” McGrath said on a conference call. “We’ll be taking steps in the future to make sure this doesn’t happen again.”

Some water systems on the Navajo Nation, which is south of Colorado, shut intake systems on the San Juan River, according to the Associated Press. Navajo President Russell Begaye said the tribe is frustrated with the EPA, and he threatened to take legal action, AP reported.

Toxic Chemicals

The EPA, through its Superfund program, has investigated the toxic chemicals in water and soil around abandoned mines near Silverton, in the mountains of southwest Colorado. Water quality has worsened in the Animas River since 2008, with higher levels of heavy metals that make it toxic to most trout.

Costs for such river contamination can exceed $100 million in U.S. fines and remediation.

After a Duke Energy Corp. coal-disposal pond sprung a leak and contaminated North Carolina’s Dan River last year, the company pleaded guilty and agreed to spend $34 million on river and wetlands projects nearby and pay a $68 million criminal fine.

In Colorado, the EPA was preparing to install a drainage pipe from the Gold King Mine, as part of a project to cap a nearby mine. Of about 200 mines, local environmental groups identified about 30 that need work, said Peter Butler, a co- coordinator of the Animas River Stakeholders Group.

“They made some mistakes,” Butler said of the EPA. “It would have behooved them to talk to more people before they got in there.”

Claims Process

EPA has apologized and said businesses or residents facing personal injury or property damage could file a claim for “damage caused by U.S. government actions.”

“Although EPA’s regulations state that the EPA has six months to resolve a claim, the agency will make every effort to respond to Gold King Mine spill claims as soon as possible,” the agency said on its website.

Following the spill, the local sheriff’s office on Aug. 6 closed the river to swimming, kayaking and rafting. EPA advised downriver farmers and cities to close water intakes, and some officials said a lack of irrigation water could cause hardships.

McGrath said the initial increase in levels of metals and sediment in the water appeared to be waning, but it was unclear how long it would be until the river returned to its pre-blowout level of cleanliness.