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Oil Companies to Pay $7.4 Million in Civil Penalties to Resolve U.S. Claims for Pipeline Spill on Allotted Tribal Land

Oil Companies to Pay $7.4 Million in Civil Penalties to Resolve U.S. Claims for Pipeline Spill on Allotted Tribal Land

Clean Water Act Settlement Addresses July 2022 Crude Oil Pipeline Rupture into Oklahoma’s Skull Creek

WASHINGTON (Jan. 30, 2024) – Today, the Environmental Protection Agency (EPA) and Justice Department announced that Holly Energy Partners-Operating L.P. and Osage Pipe Line Company LLC have agreed to pay $7.4 million in Clean Water Act civil penalties and implement corrective measures to settle claims stemming from a pipeline rupture and crude oil spill from the Osage pipeline onto land owned by members of the Sac and Fox Nation in Oklahoma. In addition to payment of the civil penalties, the settlement requires that the two companies complete the cleanup and remediation of the impacted area and take additional steps to prepare for and prevent future spills.

“The pipeline spill in this case dumped nearly 300,000 gallons of crude oil, contaminating Skull Creek and severely hampering water quality and the aquatic environment in the creek,” said Assistant Administrator David M. Uhlmann of EPA’s Office of Enforcement and Compliance Assurance. “EPA and its federal partners are requiring the oil companies who caused the spill to restore Skull Creek, operate safely, and take steps to prevent future spills.”

“Oil companies have a responsibility to prevent harmful oil spills, and today’s settlement demonstrates that those who violate this duty will be held accountable under the law,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “We appreciate the Sac and Fox Nation’s steady involvement in monitoring the cleanup efforts for environmental, natural resource, and cultural resource impacts and respect the Nation’s efforts to be caring stewards of lands owned by its members.

“The Sac and Fox Nation is a strong partner in conserving and protecting the environment and natural resources. EPA worked closely with the Nation to keep its environmental staff and leadership updated during the response and cleanup of the Osage Pipeline spill,” said EPA Region 6 Administrator Dr. Earthea Nance. “Today’s settlement is an important step in holding the company accountable for the impacts to Skull Creek and other potential effects.”

“Safeguarding Oklahoma’s natural resources is of the utmost importance for future generations,” said U.S. Attorney Robert J. Troester for the Western District of Oklahoma. “My office remains committed to furthering environmental justice by ensuring those responsible for oil spills remediate and rectify the impacts to our communities and tribal partners.”

The United States filed its Complaint today in the U.S. District Court for the Western District of Oklahoma along with the notice of lodging of a Consent Decree to resolve the case. In the Complaint, the United States alleges that the two related Dallas-based companies are liable under the Clean Water Act for the crude oil spill that occurred on July 8, 2022. Osage Pipe Line Company owns the 135-mile-long, 20-inch-diameter pipeline that transports crude oil from a tank farm in Cushing, Oklahoma, to the HollyFrontier refinery in El Dorado, Kansas. Holly Energy Partners-Operating is the operator of the pipeline.

The Complaint alleges the spill occurred when a segment of the pipeline ruptured adjacent to Skull Creek about five miles north of Cushing. From the point of the discharge, Skull Creek flows about three more miles before entering the Cimarron River. The pipeline was operating at the time of the rupture and discharged about 300,000 gallons (7,110 barrels) of crude oil into the creek. The land where the rupture occurred, and the adjacent downstream parcel that the creek runs through, are both allotment lands owned by members of the Sac and Fox Nation.

The companies, the EPA, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), the Department of the Interior’s Bureau of Indian Affairs, and the Sac and Fox Nation responded to the rupture and spill. The companies are continuing cleanup work in Skull Creek under the oversight of the EPA, and the pipeline was returned to operation at reduced pressure under the oversight of PHMSA through its corrective action authority. The Sac and Fox Nation deployed tribal monitors to observe the companies’ work at the spill site and monitor for impacts to natural and cultural resources.

In addition to payment of the civil penalties in the Consent Decree, the companies will be required to complete the cleanup and remediation of the impacted area, improve their pipeline integrity management program, provide additional training for all their control room operators, and expand their spill notification efforts for tribal governments with land interests within the footprint of the pipeline. The penalties and remedial measures required by the Consent Decree are in addition to the costs the companies have incurred to clean up the oil spill.

Section 311(b) of the Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the navigable waters of the United States or adjoining shorelines, the contiguous zone, or in connection with activities under the Outer Continental Shelf Lands Act in quantities that may be harmful to the environment or public health. The penalties for this spill will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Funds Center. The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate victims for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances.

The Justice Department’s Environmental Enforcement Section lodged the consent decree with the U.S. District Court for the Western District of Oklahoma. The proposed Consent Decree is subject to a 30-day public comment period and court review and approval. A copy of the Consent Decree is available on the Department of Justice website.


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