U.S. Water News Online
WASHINGTON -- Koch Industries Inc., will pay the largest
civil fine ever imposed on a company under any federal environmental
law to resolve claims related to more than 300 oil spills from its
pipelines and oil facilities in six states, the Justice Department
and the U.S. EPA has announced. A settlement recently filed requires
Koch, the second-largest privately held company in the United States,
to pay a $30 million civil penalty, improve its leak-prevention
programs, and spend $5 million on environmental projects.
"This record civil penalty sends a clear message to those who
transport hazardous materials: You cannot endanger public health or
the environment," said Attorney General Janet Reno. "We will not let
you foul our water and spoil our land by breaking the law."
The settlement filed in U.S. District Court in Houston resolves
two lawsuits in Houston and Tulsa, Okla., which charge that Koch
illegally discharged crude oil and petroleum products in Texas,
Oklahoma, Kansas, Missouri, Louisiana, and Alabama. The State of
Texas joined the United States in suing Koch, and the $30 million
penalty will be divided equally between Texas and the federal
"Today's landmark fine against Koch Industries for egregious
violations of the Clean Water Act sends a strong message that those
who try to profit from polluting our environment will pay the price,"
said EPA Administrator Carol M. Browner. "It is another sign of the
Clinton-Gore Administration's strong commitment to protecting our
communities from environmental threats."
Koch Industries, headquartered in Wichita, Kan., owns and operates
extensive underground and above-ground pipelines that transport crude
oil and related products in the Midwest. Most of the spills at issue
in the settlement occurred in Oklahoma, Texas, and Kansas. In one
case, almost 100,000 gallons of oil was spilled in Texas and caused a
12-mile oil slick on Nueces Bay and Corpus Christi Bay.
Complaints filed in 1995 and 1997 allege that Koch unlawfully
allowed some 3 million gallons of crude oil and related products to
leak from its pipelines into ponds, lakes, rivers and streams, or
onto adjacent shorelines, from 1990 to 1997. Most of the spills were
caused by corrosion of pipelines in rural areas. The governments
allege that Koch could have prevented the corrosion by proper
operation and maintenance.
Under the settlement, Koch must assess the condition of 2,500
miles of pipeline that it currently operates and repair any defects.
The settlement also requires Koch to implement an improved
leak-prevention and detection program, a maintenance and inspection
program, and a training program aimed at preventing leaks from the
company's pipelines. The company also must hire an independent
auditor to audit Koch annually for at least three years and report to
the federal government and Texas on whether the company is meeting
the requirements of the settlement and applicable laws.
In addition to changing its operations, Koch also must spend a
total of $5 million on environmental projects in the states most
affected by its illegal discharges:
Koch must pay $15 million of the $30 million penalty into the
federal government's Oil Spill Liability Trust Fund, created in 1990
following the Exxon Valdez incident in Alaska. The fund helps pay for
damages, cleanup costs, and some operation expenses related to oil
Oil spills can pose a serious threat to human health and the
environment. According to the EPA, one pint of oil released into the
water can spread and cover one acre of water surface area and can
seriously damage an aquatic habitat. It can take years for an
ecosystem to recover from damage caused by an oil spill.
Return to the
U.S. Water News' Archives page
Return to the U.S. Water
Use a comma to separate e-mail addresses:
Hi, I thought you might like to read this article.