US announces record oil and gas pollution penalty against Marathon Oil

By Nichola Groom

(Reuters) – U.S. officials on Thursday announced a $241 million settlement with Marathon Oil (NYSE:) over alleged air pollution violations at dozens of the company’s oil and gas facilities on a North Dakota Indian reservation, saying it was part of an ongoing crackdown.

The settlement includes a record penalty and environmental equipment upgrades. President Joe Biden’s administration has ratcheted up enforcement in the oil and gas sector to fight climate change and to counter pollution, particularly in poor and minority communities.

“The Marathon settlement represents a great advance in our efforts to address climate change through enforcement action,” Todd Kim, assistant attorney general with the Department of Justice’s environment and natural resources division, said in an interview.

The deal applies to years of alleged excessive volatile organic compound and methane emissions from wells, piping and storage tanks on the Fort Berthold Indian Reservation, home of the Mandan, Hidatsa and Arikara Nation, at the center of the huge Bakken oil formation.

It is the administration’s 12th targeting of the oil and gas sector emissions, but by far its largest.

“This settlement is historic, and it is a game changer,” Kim said.

Under the deal, Marathon will pay a $64.5 million penalty, the largest ever for violations of the Clean Air Act from stationary sources, according to the Environmental Protection Agency and the Department of Justice, which jointly filed the settlement in federal court in North Dakota on Thursday.

That penalty is more than double the combined total of the administration’s 11 previous oil and gas Clean Air Act settlements, officials said.

Still, it is dwarfed by Marathon’s earnings, which were $1.55 billion last year.

The company will also invest an estimated $177 million to bring its facilities into compliance with the law. That work will slash 2.25 million tons of carbon dioxide emissions over the next five years, about the equivalent of removing 487,000 cars off the road for a year.

The settlement is subject to a 30-day public comment period before it can be finalized.

The government’s complaint alleged that Marathon, which is being acquired by ConocoPhillips (NYSE:) in a $22.5 billion deal that has yet to be finalized, failed to obtain required permits for its facilities.

Marathon did not immediately respond to a request for comment.

The stepped-up enforcement effort is in line with Biden’s goal to reduce emissions of methane, a potent global warming gas that leaks from drill sites and pipelines, and with the vow to tackle pollution from oil and gas operations close to poor communities.

A representative for the MHA Nation did not immediately respond to a request for comment.