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

Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division emphasized the responsibility of oil companies to prevent harmful oil spills. He stated that the recent settlement serves as a demonstration that those who fail to fulfill this duty will face legal consequences.

The Justice Department and the Environmental Protection Agency (EPA) made a joint announcement today, disclosing that Holly Energy Partners-Operating L.P. and Osage Pipe Line Company LLC have consented to a payment of $7.4 million in Clean Water Act civil penalties. This agreement aims to resolve claims arising from a pipeline rupture and crude oil spill from the Osage pipeline onto the land owned by members of the Sac and Fox Nation in Oklahoma. In addition to the financial penalties, the settlement mandates both companies to carry out cleanup and remediation efforts in the affected area. Furthermore, they are required to implement additional measures to proactively prevent and prepare for potential future spills.

Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division emphasized the responsibility of oil companies to prevent harmful oil spills. He stated that the recent settlement serves as a demonstration that those who fail to fulfill this duty will face legal consequences. He also expressed gratitude for the Sac and Fox Nation's consistent involvement in monitoring the cleanup efforts and their commitment to being responsible stewards of their lands.

“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 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.”

U.S. Attorney Robert J. Troester for the Western District of Oklahoma stressed the significance of safeguarding Oklahoma's natural resources for future generations. He reaffirmed his office's dedication to environmental justice by ensuring that those accountable for oil spills take the necessary actions to remediate and rectify the impacts on communities and tribal partners.

Administrator Dr. Earthea Nance of EPA Region 6 acknowledged the Sac and Fox Nation as a valuable partner in conserving and protecting the environment and natural resources. She mentioned the close collaboration between the EPA and the Nation during the response and cleanup of the Osage Pipeline spill. Dr. Nance emphasized that the settlement reached is a crucial step in holding the company responsible for the impacts on Skull Creek and other potential consequences.

“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 Administrator Dr. Earthea Nance of EPA Region 6. “Today’s settlement is an important step in holding the company accountable for the impacts to Skull Creek and other potential effects.”

The U.S. District Court for the Western District of Oklahoma received the complaint filed by the United States, along with the notice of lodging a proposed consent decree, in order to resolve the case. According to the complaint, the two Dallas-based companies are held responsible under the Clean Water Act for the crude oil spill that took place on July 8, 2022. Osage Pipe Line Company owns a 135-mile-long pipeline with a diameter of 20 inches, which is used to transport crude oil from a tank farm in Cushing, Oklahoma, to the HollyFrontier refinery in El Dorado, Kansas. The operator of the pipeline is Holly Energy Partners-Operating.

The complaint states that the spill occurred when a section of the pipeline ruptured near Skull Creek, approximately five miles north of Cushing. After the discharge point, Skull Creek flows for about three more miles before joining the Cimarron River. At the time of the rupture, the pipeline was in operation and released approximately 300,000 gallons (7,110 barrels) of crude oil into the creek. The area where the rupture occurred, as well as the downstream parcel through which the creek passes, are both allotment lands owned by members of the Sac and Fox Nation.

Following the rupture and spill, the companies, along with 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 incident. The companies are currently engaged in cleanup efforts at Skull Creek under the supervision of the EPA. The pipeline has been put back into operation at a reduced pressure, with PHMSA overseeing the corrective actions. The Sac and Fox Nation has deployed tribal monitors to oversee the companies' work at the spill site and monitor any potential impacts on natural and cultural resources.

In addition to the payment of civil penalties outlined in the proposed consent decree, the companies will also be obligated to complete the cleanup and remediation of the affected area. Furthermore, they will need to enhance their pipeline integrity management program, provide additional training for control room operators, and expand their efforts to notify Tribal governments with land interests within the pipeline's footprint in the event of a spill. It is important to note that these penalties and remedial measures are separate from the costs already incurred by the companies for the oil spill cleanup.

Under Section 311(b) of the Clean Water Act, it is illegal to discharge oil or hazardous substances into 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 if it poses a potential harm to the environment or public health.

The penalties for this particular spill will be deposited into the federal Oil Spill Liability Trust Fund, which is managed by the National Pollution Funds Center. This fund is utilized to finance federal response activities and provide compensation to victims for damages resulting from oil or hazardous substance discharges or the threat thereof.

The consent decree has been filed by the Justice Department's Environmental Enforcement Section with the U.S. District Court for the Western District of Oklahoma. It is currently open for a 30-day public comment period and will undergo court review and approval. For those interested, a copy of the proposed consent decree can be accessed on the Justice Department's website at www.justice.gov/enrd/consent-decrees.

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