BISMARCK — A company responsible for the spill of 29 million gallons of produced fracking water in North Dakota — thought to be the largest such inland spill in history — has agreed to pay $35 million in criminal fines and civil penalties for negligence and a monthslong failure to stop or report the leak.
The settlement from Summit Midstream Partners came Thursday, Aug. 5, after the U.S. Department of Justice filed criminal charges against the company alongside a joint civil complaint with the state of North Dakota.
Summit allowed the spill to stretch on for months in 2014 and 2015. And though they eventually reported a 70,000-barrel spill over a 10-day period to North Dakota regulators, evidence in newly released court records shows the volume of the largest oilfield spill in state history was actually 10 times larger than previously indicated.
Data collected by Summit in August 2014 showed a significant drop in its pipeline's pressure, an indication of a leak. Despite this and other warning signals in the ensuing months, the company continued to run produced water through the pipeline, allowing millions of gallons to be released into the Blacktail Creek near Williston, N.D. over a period lasting 143 days.
The produced water — a highly saturated salt fluid that is byproduct of fracking — contaminated nearby land, groundwater and over 30 miles of Missouri River tributaries, creating a spill zone visible from satellites in space.
“Summit prioritized profits over the environment. The company’s disregard for pipeline safety resulted in pollution of the environment on a massive scale over 143 days,” said Assistant Attorney General Todd Kim, of the DOJ's Environment and Natural Resources Division, in a statement Thursday. "Summit’s conduct was criminal and its failure to immediately report the discharge a felony."
According to court records, Summit continued operating its pipeline in spite of multiple signs of a leak. In October 2014, a Summit construction manager flagged "extreme low pressure in the pipeline," to which a facilities engineer responded: "Not good. We may want to consider shutting it down."
Summit continued running the line anyway.
Court documents show that even when Summit reported its spill to state regulators and media at the time, it had reason to believe its estimates were substantially less than the actual volume spilled.
According to filings, in January 2015, Summit's Vice President of Engineering distributed analysis of the spill to company executives stating the spill totaled more than 700,000 barrels — findings that were not publicized and later withheld from a grand jury and civil investigators.
In a statement Thursday, Summit president and CEO Heath Deneke acknowledged his company's responsibility for the damage and said they have invested close to $75 million in cleanup and safety improvements at the spill site in the years since the incident.
"As a company, we have accepted responsibility for the produced water spill at the Blacktail Creek site from the beginning and have been working diligently over the past seven years on efforts to fully remediate the environmental impacts to the area," he said.
The criminal settlement is pending a court's approval and would total $15 million in federal fines for negligence, failure to stop the spill and a deliberate failure to immediately report the incident. The civil complaint filed by the United States and North Dakota applies to both Summit and affiliate companies Summit Operating Services and Meadowlark Midstream Company LLC.
The three companies agreed to pay $20 million in penalties in a parallel settlement. A majority of the total settlement money is expected to go to the federal government, to be deposited in its Oil Spill Liability Trust Fund, according to court records.
North Dakota expects to receive a $10 million cut of the settlement, with about three quarters apportioned for the state's Department of Environmental Quality and the other quarter for the Industrial Commission, which regulates business in the state.
In 2015, the Industrial Commission fined Summit and Meadowlark $2.4 million for the spill. The company has spent another $50 million to date in cleanup costs under state state's oversight, according to the Department of Justice, and will remain under probation until certain steps are completed to prevent future spills.
In a joint statement with the DOJ, Attorney General Wayne Stenehjem said Thursday's action makes "clear that disregard for North Dakota’s environmental laws will not be tolerated."
Readers can reach Forum reporter Adam Willis, a Report for America corps member, at firstname.lastname@example.org.