Pipeline Company Pays $35 Million to Settle Criminal and Civil Environmental Violations for Inland Spill of Oil Drilling Generated Water

In a significant environmental crime enforcement action, the Justice Department resolved criminal charges under the Clean Water Act against Summit Midstream Partners LLC, a North Dakota pipeline company that discharged 29 million gallons of water of produced water from its pipeline near Williston, North Dakota.

In addition to the criminal resolution, the United States and the States of North Dakota resolved civil charges against Summit Midstream and a related company, Meadowlark Midstream, involving violations of the Clean Water Act and North Dakota water pollution control laws.  In this parallel enforcement action, Summit Midstream agreed to pay a total of $35 million in criminal fines and civil penalties.  Approximately $15 million of the $35 million total constitutes the criminal fines.

Produced water is the waste product of hydraulic fracturing.  Summit Midstream discharged more than 700,000 barrels of produced water that contaminated land, groundwater and over 30 miles of tributaries of the Missouri River.  The spill is the largest inland spill in history and was visible in photographs taken by satellites orbiting the earth.

The Justice Department outlined the factual basis for the enforcement action that demonstrated that the spill occurred over a 143-day period before being discovered.  The factual timeline demonstrates that Summit Midstream continued pumping produced water through the pipeline in 2014 to 2015 despite multiple warning signs that the line had ruptured.

Starting on August 17, 2014, Summit collected real-time pressure data that showed a significant pressure drop, indicating that a rupture had occurred.  Almost two months later, on October 14, 2014, Summit’s construction manager raised a concern about “extreme low pressure on the pipeline.”  The facilities manager responded: “Not good.  We may want to consider shutting it down.”  Summit continued to operate the pipeline and made no attempt to determine if a rupture had actually occurred.

On November 4, 2014, a third-party operator of the injection well at the end of the pipeline informed Summit that 115,000 barrels (4,830,000 gallons) of produced water were missing for the month of October, which is approximately 3,700 barrels (155,400 gallons) per day.

On three separate occasions thereafter, on December 3, 10 and 16, 2014, the third-party operator followed up with Summit about the produced water discrepancy because it received no response to its previous notifications and inquiries.  The third-party operator confirmed the accuracy of its meters and informed Summit that the discrepancy had increased to 4,900 barrels per day.

Finally, on January 6, 2015, a Summit employee walked the line and identified the rupture.

The 700,000 barrel discharge of produced water contained crude oil, chloride, sodium, ammonia, aluminum, arsenic, boron, copper, nickel, selenium, zinc, barium, benzene and thallium among the contaminants.  Produced water is toxic toplants, fish and other aquatic wildlife.  It is also harmful to humans.

The government cited Summit’s negligence in the design, construction and operation of its pipeline system, as well as the negligent failure to locate and stop the spill after learning of red flags indicating a leak.  Summit failed to install meters at both ends of the pipeline to conduct “line balancing” or to maintain any other reliable leak detection system.  Even after learning of significant pressure drops and decreases in volume, Summit failed to act and continued operating thereby causing the discharge of millions of additional gallons of produced water into United States waters.

Summit also acknowledged that it knowingly did not share all relevant information regarding the volume and duration of the spill and that its reports to federal and state regulators were “incomplete and misleading.”

Under the plea agreement, Summit will serve a three-year term of probation and will be required to implement comprehensive remedial measures. Under the civil settlement, Summit and Meadowlark, and a related company will pay $20 million in civil penalties, perform comprehensive relief, clean up the contamination and pay $1.25 million in natural resource damages.  Summit has spent over $50 million as of this date to clean up the spill. 

Remediation efforts are projected to continue over the next several years.  Summit and Meadowlark are required to take affirmative steps to prevent future discharges, including stringent pipeline installation, operation and testing requirements; centralized pipeline monitoring systems; spill response planning and countermeasures; and data management and training measures.  Summit also has to have independent third-party audits conducted each year to ensure that the relief and remediation are properly carried out.

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