Marathon Oil reaches $241.5M settlement of North Dakota Clean Air Act violations

Natural gas is flared from oil and gas facilities at Fort Berthold in August 2021. The U.S. Department of Justice and the Environmental Protection Agency announced a settlement July 11, 2024, regarding Marathon Oil Clean Air Act violations on the Fort Berthold Reservation. (Photo provided by Environmental Protection Agency)

The U.S. Department of Justice and the Environmental Protection Agency announced Thursday a $241.5 million settlement with Marathon Oil for violations of the Clean Air Act on North Dakota’s Fort Berthold Reservation.

The settlement, which includes a civil penalty of $64.5 million, is the largest ever for Clean Air Act violations at stationary sources such as oil and gas tank systems, the Department of Justice said in a news release.

The agreement also requires Marathon Oil to spend an estimated $177 million on compliance measures to reduce emissions from over 200 facilities in North Dakota.

Marathon was accused of Clean Air Act violations at oil and gas facilities that resulted in “thousands of tons of illegal pollution, including volatile organic compounds and carbon monoxide, which can contribute to asthma and increase susceptibility to respiratory illnesses,” the press release states . A complaint also alleges that Marathon facilities released large quantities of greenhouse gases, including methane, contributing to climate change.

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The departments said Marathon is the 22nd largest producer of oil based on 2022 data but is the seventh largest emitter of greenhouse gas emissions in the oil and gas industry. The agencies attributed a lot of the emissions to flaring, or the burning off of natural gas, a common practice during North Dakota’s Bakken development due to inadequate pipeline and gas processing facilities.

“ We are pleased that the settlement resolves this issue without litigation and includes mitigation measures that are consistent with our existing voluntary emissions reduction efforts,” a Marathon Oil spokesperson said in a statement.

North Dakota oil and gas operators have significantly reduced natural gas flaring in compliance with state gas capture regulations. Flaring was at a high of 36% statewide in 2011.

Operators flared 5% of natural gas produced in April, according to the state Oil and Gas Division. Flaring on Fort Berthold, which used to be higher than the rest of the state due to lagging infrastructure development, was down to 3% in April, state figures show .

The improvements Marathon promises to make under the agreement will reduce carbon dioxide emissions by 2.25 million tons over the next five years, Attorney General Merrick Garland said in a statement. That is the equivalent of taking 487,000 cars off the road for one year, the agencies said.

“The Justice Department will continue to vigorously enforce our environmental laws to protect the health of the American people,” Garland said.

The complaint also alleges failure to comply with storage tank design, operation and maintenance requirements at 66 oil facilities at Fort Berthold. The settlement requires Marathon to obtain permits for existing facilities at Fort Berthold as well as new ones.

The agreement also requires auditor checks on Marathon permit applications and ongoing audits of emissions. The company must temporarily stop production if facility-wide emissions limits are exceeded or flares are not operating properly.

Marathon also will purchase two infrared cameras for use by the Mandan, Hidatsa and Arikara Nation during facility inspections.

Mark Fox, chair of the Mandan, Hidatsa and Arikara Nation, said in a statement Friday he is glad a settlement was reached and he expects it will benefit Fort Berthold.

“Protecting MHA lands, water, and air quality is very important to us,” Fox said.

The complaint and the proposed consent decree were filed by the Justice Department’s Environmental Enforcement Section. The proposed consent decree is subject to a 30-day public comment period. The federal civil penalty would go to the U.S. Treasury, according to the Department of Justice.

Marathon Oil is being acquired by ConocoPhillips in a deal that is expected to close by the end of the year. The compliance requirements are expected to continue to apply even if the facilities are under new ownership, the Department of Justice said.

A Marathon spokesperson said the settlement is not expected to have an impact on the merger. Over 70% of the cost associated with the settlement has already been incurred or was included in Marathon’s budget announced for 2024, according to the spokesperson.

The North Dakota Department of Environmental Quality was aware a settlement between Marathon and the EPA was in progress but was not part of the litigation, spokeswoman Jennifer Skjod said Thursday. The EPA enforces the Clean Air Act on tribal lands.

This story has been updated with additional reporting, including a statement from MHA Chairman Mark Fox and Marathon Oil.

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