Marathon Oil reaches a $241 million environmental settlement with EPA : NPR

The federal government on Thursday announced a $241.5 million settlement with Marathon Oil Co. over alleged air pollution violations at the company’s oil and gas operations on the Fort Berthold Indian Reservation in North Dakota.

The EPA and Justice Department said the settlement will require Marathon to reduce climate- and health-damaging emissions from those facilities, resulting in a reduction of more than 2.3 million tons of pollution.

“This historic settlement, the largest civil penalty ever for a stationary source violation of the Clean Air Act, will ensure cleaner air for the Fort Berthold Indian Reservation and other North Dakota communities while holding Marathon accountable for its illegal pollution,” said Attorney General Merrick Garland.

Officials for Marathon did not immediately respond to a request for comment. Houston-based Marathon operates 169 wells in North Dakota, where it produces oil and natural gas. Proposed Consent Decree In implementing the settlement, the company did not admit any liability in relation to the allegations but said the two sides had agreed to avoid litigation and serve the public interest.

Spokespeople for the Mandan, Hidatsa and Arikara tribes, which are based on the Fort Berthold Reservation, also did not immediately respond to requests for comment.

Marathon is the nation’s 22nd-largest oil producer based on 2022 data, but it’s also the oil and gas industry’s seventh-largest greenhouse gas emitter, according to the federal agency. Much of the emissions come from flaring, the industry practice of burning waste gases that contain methane, which the EPA says has 25 times the impact on climate change than carbon dioxide. Flaring burns methane and other pollutants, but it’s not completely efficient, so significant amounts are released into the atmosphere, which can pose health hazards to nearby communities, the federal agency said.

The settlement is part of the EPA’s climate change enforcement initiative focused on reducing methane emissions from oil and gas production and landfills.

The plan calls for Marathon to reduce its carbon dioxide emissions by more than 2.25 million tons over the next five years — the equivalent of taking 487,000 cars off the road for a year — and cut emissions of volatile organic compounds that can cause asthma and other respiratory illnesses by about 110,000 tons, officials said.

“This settlement is a major win for the health and future of tribal communities, including the people and families who often suffer from pollution,” said EPA Regional Administrator KC Becker. “As a result of the agreement, Marathon has taken and will continue to take comprehensive steps to comply with regulations and reduce harmful emissions at hundreds of production sources. These investments will improve air quality and reduce respiratory illnesses across the Fort Berthold Indian Reservation and western North Dakota.”

The agency said the case marks the first time it has sued an oil and gas producer for “violating major source discharge permit requirements under the Clean Air Act’s Significant Exacerbation Prevention Program,” and that the $64.5 million civil penalty that Marathon must pay is the largest penalty ever assessed for a “stationary source violation,” which includes facilities such as oil and gas tank systems.

The Justice Department said this is the largest of 12 similar efforts by the Biden administration targeting emissions from the oil and gas industry, and that the penalty is more than double the amount of 11 previous settlements combined.

Marathon also agreed to invest $177 million through the end of the year in major compliance measures that officials say will “significantly reduce” hazardous emissions from 169 existing facilities on state lands and reservations and new facilities to be built in North Dakota.

The settlement is part of a complaint and proposed consent decree formally filed Thursday in federal court in North Dakota. The complaint alleges that Marathon violated the Clean Air Act at about 90 of its facilities, resulting in thousands of tons of illegal pollution. It also alleges that Marathon artificially underestimated emissions to avoid permit requirements.

The consent decree is subject to a 30-day public comment period.

ConocoPhillips said in May it would buy Marathon Oil for about $17.1 billion in a stock-for-stock deal. The deal, worth $22.5 billion including $5.4 billion in debt, comes as energy prices soar and big oil companies are raking in big profits. The deal is expected to close by the end of the year.

In its most recent financial report, Marathon said it made a profit of $297 million for the three months ended March 31 on sales of $1.55 billion.

Thursday’s settlement didn’t seem to spook investors: Marathon shares closed up 1.6% on Thursday and are up about 18% so far this year.