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$35M settlement proposed for largest oil field spill in North Dakota history

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saltwater spill update (copy)

Crews work to recover oil from Blacktail Creek north of Williston in 2015 after a pipeline leak released nearly 30 million gallons of saltwater that included some oil.

New evidence shows that the largest oil field spill in North Dakota history was 10 times greater in size than previously thought, the result of a leaky pipeline that released 29 million gallons of contamination over the course of several months in 2014 and 2015.

The U.S. Department of Justice filed criminal charges Thursday against pipeline operator Summit Midstream Partners, which has agreed to pay $35 million in criminal fines and civil penalties related to a lawsuit filed the same day by the federal government and state of North Dakota.

The spill occurred over the course of five months as produced water leaked from a pipeline north of Williston and entered Blacktail Creek, a tributary of the Missouri River. Produced water is highly saturated saltwater that comes up alongside oil and gas at well sites, and the fluid that leaked included contaminants such as oil, chloride, sodium, arsenic and benzene, among others, according to court documents.

“After learning of the pipeline’s rupture, the defendant took no action to notify proper authorities or shut down the line for nearly five months, resulting in the largest inland produced water spill in U.S. history,” said Lawrence Starfield, acting assistant administrator of the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance.

He added that the EPA other federal and state agencies required Summit to clean up contamination caused by the spill, and perform pipeline testing, control room monitoring and third-party auditing.

Days after Summit first reported the spill to state officials, the company told North Dakota regulators and reporters that nearly 3 million gallons spilled. That was based on the volume that spilled during a period of less than two weeks in late 2014 and early 2015, according to court documents.

By the time Summit offered that estimate, the then-vice president of engineering had already conducted an analysis and “found substantial evidence” that more than 29 million gallons had leaked, according to court documents. The leak occurred over a 143-day period.

The higher volume was withheld from a grand jury and from investigators “under a claim of privilege,” according to a joint factual statement signed by both federal lawyers and Summit. Prosecutors later discovered that the company executive had prepared the analysis on his own and that it should not have been claimed as privileged, according to the document.

Summit is pleading guilty to violations of the federal Clean Water Act. It admits in the joint factual statement that it did not immediately notify authorities of the spill as required by law and that statements it made to the state and federal government “were incomplete, misleading, and not responsive to specific requests for information.” The company has also admitted to acting negligently.

“As a company, we have accepted responsibility for the produced water spill at the Blacktail Creek site from the beginning and have been working diligently over the past seven years on efforts to fully remediate the environmental impacts to that area, while also investing heavily in preventative system improvements,” Summit President, CEO and Chairman Heath Deneke said.

The agreement reached between the parties is subject to a 30-day public comment period and court approval.

The spill

The pipeline involved in the spill was a small gathering line, part of a larger pipeline system that serviced 37 oil wells owned by Halcon Resources.

The system was designed to move produced water to a disposal site where it would be injected underground.

Construction on the pipeline began in 2013. The pipe was made of Fiberspar LinePipe, a fiberglass-reinforced material that can be problematic when installed incorrectly, according to a 2015 report from the Energy and Environmental Research Center at the University of North Dakota. The report said a small flaw “can serve as a seed for a catastrophic failure after the line is installed and buried.”

The pipeline manufacturer recommended that one of its representatives be on-site for installations, but several parts of the Summit line were installed without one, including the part of the line where the spill happened, according to court documents. After the line was installed, Summit conducted pressure tests on it in 2014 but not at a high enough pressure as indicated by Fiberspar specifications.

“Pressure tests are intended to ensure that the material has not been damaged in installation and to otherwise confirm the pipe’s integrity,” the civil complaint says.

Inspection reports identified leaks and blowouts in the line and its fittings that required repair. The reports attributed the issues to “faulty pipe” or “faults in the pipe,” as well as to rocks pushing up against the pipe that had damaged it during the installation process, according to the complaint.

It "cannot be known with certainty" that the pipe's weakness was the result of negligent installation, but that "had the potential to be a cause or contributing cause to the blow out," the joint factual statement says.

The pipeline system began accepting produced water in June 2014 but it wasn’t until December that year that the company had “any operational equipment in place specifically designed to detect leaks,” the complaint says.

Pipeline company didn’t use remote sensors before leak

Still, court documents show there were early signs something was wrong.

Summit detected a drop in pressure in August 2014, an indication that there could be a leak.

Emails between employees from October 2014 show that the company had directed workers to drive around looking for leaks. One employee wrote, "Not good. We may want to consider shutting it down."

The company confirmed the leak on Jan. 6, 2015, when a contractor noticed that Blacktail Creek was flowing, yet the rest of the landscape was frozen, according to the joint factual statement. The salty water had a lower freezing point. A Summit worker then tasted the water and found it to be salty.

Summit shut down the pipeline that night and notified the state the next day, according to court documents.

The joint factual statement says Summit employees told authorities that the company's missed opportunities to find and stop the leak were a product of there being too much "noise."

"They explained that Summit's focus was on rapid expansion, and that there were many different priorities such that environmental compliance was not made a top priority," the statement reads.

The response

Studies show that the spill resulted in several environmental problems, including a fish survival rate downstream significantly below that of a site upstream.

Chloride levels in Blacktail Creek were as much as 72 times higher than the expected natural background level.

Data collected by the U.S. Geological Survey in October 2014 on the Little Muddy River downstream of the creek showed the highest chloride and boron concentrations recorded at the station during its 42-year history.

Numerous state and federal agencies have been involved in monitoring and cleaning up the spill. Oil removal wrapped up in May 2015 and groundwater cleanup is ongoing, according to the complaint. The spill impacted 2,700 acres around the creek, and 6 miles of road had to be built to access the site.

Deneke, the Summit executive, said the company has spent $75 million in improvements to its systems and on spill cleanup since 2015. It has new leak detection technology, a centralized control room, monitoring and alarm systems, and it has changed its operating practices and procedures, he said.

The joint factual statement says Summit has spent $50 million on cleanup alone, about $26 million of which was reimbursed by insurance. The company has new owners and leadership.

Deneke said the proposed $35 million settlement was "severe under the circumstances, particularly given our substantial remediation and mitigation efforts to date," but that the company wants to put the matter behind it. It plans to pay the penalties over the course of six years.

The federal government sued Summit on behalf of the EPA and Department of the Interior. North Dakota plaintiffs include the Department of Environmental Quality and the Game and Fish Department.

The Summit pipeline installation was not inspected by North Dakota regulators. The state Industrial Commission had established new rules governing gathering pipelines shortly before the project was installed, but funding for state pipeline inspectors did not become available until after the project was complete, the Department of Mineral Resources said in 2015. 

Inspectors missing from the pipeline puzzle

Summit has since entered into a settlement with the Industrial Commission.

"North Dakota and its federal partners are holding Summit and Meadowlark accountable and making clear that disregard for North Dakota's environmental laws will not be tolerated," North Dakota Attorney General Wayne Stenehjem said, adding that state agencies spent "countless hours investigating and responding to the spill, making this settlement possible."

Reach Amy R. Sisk at 701-250-8252 or


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