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Koch Industries, Inc. Oil Spills Settlement


Koch Industries to Pay Record Fine for Oil Spills in Six States

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 announced. A settlement filed on January 13, 2000 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.

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 government.

Koch Industries, headquartered in Wichita, Kansas., 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.

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.

The 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.

Civil Enforcement | Cleanup Enforcement | Criminal Enforcement

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