The company responsible for North Dakota’s largest saltwater spill will pay $35 million in criminal fines and civil penalties under the terms of a criminal and civil settlement with North Dakota and the U.S. government.
Summit Midstream’s 2014-15 spill near Blacktail Dam discharged more than 700,000 barrels of produced water, contaminating land, groundwater, and more than 30 miles of tributaries to the Missouri River. North Dakota’s produced water is 13 times saltier than sea water and contains a number of additional contaminants such as ammonia, aluminum, arsenic, boron, copper, nickel, selenium, zinc, barium, benzene, thallium, and others. It is toxic to plants, animals and people, alike.
Summit’s brine spill was so large, it was visible in photographs taken by satellites orbiting the earth. It’s now believed to be the largest inland spill in history, as well as North Dakota’s largest.
The Department of Justice filed criminal charges under the Clean Water Act against Summit Midstream late in the afternoon on Thursday Aug. 5, and the United States and state of North Dakota filed companion civil complaints against them and subsidiary Meadowlark Midstream over violations of the Clean Water Act and North Dakota water pollution control laws.
According to court documents, the company knew it had a problem as early as Aug. 17, 2014, when real-time pressure data collected by Summit showed a significant pressure drop, indicative of a rupture. Despite that, it continued to operate the line.
Two months later in October, a construction manager noted continued extreme low pressure on the line, and a facilities engineer suggested the company might want to consider shutting it down.
But Summit continued to operate the pipeline.
In November, a third-party operator for the injection well at the end of the pipeline told Summit that 115,000 barrels of produced water were missing for the month of October. That’s about 3,700 missing barrels of produced water per day.
Summit didn’t respond to that, and continued to operate the pipeline.
The company followed up again in December, confirming the accuracy of their injection well meters and informing Summit that the discrepancy had grown larger, to 4,900 barrels per day.
It was not until Jan. 6, 2015, however, that a Summit employee finally walked the line and identified the rupture.
“Summit’s negligence included the design, construction and operation of the Marmon Water Gathering System pipeline, as well as the negligent failure to find and stop the spill after learning of objective signs of a leak,” according to a factual admission signed by the company and filed in court. Summit started pipeline operations without meters at both ends of the pipeline to conduct “line balancing” or otherwise having a reliable leak detection system in place.
“Even after the company learned of major drops in pressure and volume – objective signs of a leak – the company negligently continued operations and thus caused millions of additional gallons to be discharged into U.S. waters without learning the cause or pausing operations,” according to the Joint Factual Statement.
Summit has further admitted that it knowingly failed to share all relevant information regarding the volume and duration of the spill and that its reports to federal and state authorities “were incomplete and misleading,” in papers filed in court. Summit eventually reported 70,000 barrels over a 10-day period despite an internal analysis showing the discharge was more than 700,000 barrels over 143 days.
“Summit prioritized profits over the environment,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The company’s disregard for pipeline safety resulted in pollution of the environment on a massive scale over 143 days. Summit’s conduct was criminal and its failure to immediately report the discharge a felony. This resolution holds the company financially accountable, requires enhanced compliance measures to prevent future spills, and provides compensation for North Dakota’s damaged natural resources.”
Under terms of the proposed plea agreement, Summit is to serve three years of probation, in which comprehensive remedial measures are required.
If the court accepts the plea agreement, Summit will pay $15 million in federal criminal fines for negligently causing the continuous spill, failing to stop it and deliberately failing to make an immediate report as required.
Under the proposed civil settlement, Summit, Meadowlark, and a third related company, Summit Operating Services Company LLC, will pay $20 million in civil penalties, perform comprehensive injunctive relief, clean up the contamination caused by the spill and pay $1.25 million in natural resource damages to resolve the civil case.
“North Dakota and its federal partners are holding Summit and Meadowlark accountable and making clear that disregard for North Dakota’s environmental laws will not be tolerated,” said North Dakota Attorney General Wayne Stenehjem. “The North Dakota Department of Environmental Quality, Game and Fish Department, and Industrial Commission staff spent countless hours investigating and responding to the spill, making this settlement possible.”
The civil settlement further requires Summit and Meadowlark to take concrete steps to prevent future discharges, including stringent pipeline installation, operation, and testing requirements; a centralized computational pipeline monitoring system; spill response planning and countermeasures; an environmental management system; and data management and training measures. Independent third-party audits are required to ensure that certain injunctive measures are properly developed and implemented.
The measures were made a condition of Summit’s probation in the proposed criminal plea agreement. The companies have also agreed to enter into a related administrative settlement with the North Dakota Industrial Commission.
Summit has so far spent more than $50 million to clean up the spill under state oversight, and its efforts are expected to continue for years to come.
The company’s president Heath Deneke said Summit has worked “diligently” over the past seven years to fully remediate the site, and has since invested heavily in preventative system improvements, including state-of-the-art leak detection technology and centralized control room monitoring and alarm system. It has also implemented significant changes to operating practices and procedures. He also suggested the penalties are too high, in light of the company’s efforts since then to clean up the spill.
“Since discovering the spill in 2015, we have invested about $75 million on these overall system improvements and environmental remediation measures at the Blacktail Creek site,” he said. “The Global Settlement is an important final step to fully resolve the ongoing government investigations and legal matters. While we consider the overall monetary settlement penalties as severe under the circumstances, particularly given our substantial remediation and mitigation efforts to date, we believe that putting this matter behind us with manageable payment terms over the next six years is in the best interest of all of Summit’s stakeholders and employees. We look forward to completing the remaining steps to making this settlement effective, implementing our remaining obligations efficiently and transparently, and bringing closure to the unfortunate incident.”
The criminal case is being prosecuted by Senior Litigation Counsel Richard A. Udell, Senior Trial Attorney Christopher J. Costantini, Trial Attorneys Stephen J. Foster and Erica H. Pencak of the Environmental Crimes Section of the Department of Justice’s Environment and Natural Resource Division (ENRD), and Assistant U.S. Attorney Gary Delorme. The federal civil case is being handled by Senior Attorney Laura A. Thoms and Trial Attorney Devon A. Ahearn of the Environmental Enforcement Section of ENRD. The state civil case is being handled by Assistant Attorney General Margaret I. Olson of the North Dakota Office of Attorney General.
The criminal investigation was conducted by EPA’s Criminal Investigations Division. EPA’s Office of Enforcement and Compliance Assurance, EPA Region 8, the North Dakota Department of Environmental Quality, the North Dakota Industrial Commission, the U.S. Fish and Wildlife Service, the U.S. Department of Interior, and the North Dakota Department of Game and Fish provided assistance to both the criminal and civil investigations.