Marathon Oil’s Mega Penalty: $241.5 Million Settlement Aims to Clean Up Emissions and Save Lives

Marathon Oil reached a $241.5 million settlement with the EPA over a violation of air quality standards on a North Dakota Reservation. The company will need to pay penalties and invest in future compliance measures to make sure local residents have cleaner air and a healthier environment.

EPA Settlement

Last week, Marathon Oil reached a $241.5 million settlement with the Environmental Protection Agency (EPA.) The violations were focused on air quality at specific operations in North Dakota.

Violations Addressed

Specifically at the Fort Berthold Indian Reservation, the EPA is holding Marathon accountable for its illegal emissions and pollution. Many of its emissions come from burning waste gasses, which is called flaring, and releases pollutants into the atmosphere.

Original Complaint

The original complaint and degree that was filed alleges that Marathon violated the Clean Air Act at nearly 90 different facilities. It also claims that the company submitted fake emissions estimates in order to avoid meeting permit requirements.

Communal Impact

The impact of these processes on the surrounding air quality trickles into health impacts on the nearby communities. Locals, including natives living on the reservation, would be directly affected by these practices.

Seventh-Largest Emitter

Despite only ranking 22nd in terms of national oil production, the company places seventh in emitting greenhouse gas emissions within the oil and gas industries.

Largest Civil Penalty

This settlement stands out because it’s “the largest ever civil penalty for violations of the Clean Air Act at stationary sources,” according to the Attorney General. The direct penalty cost is $64.5 million.

Future Compliance Investments

The rest of the $177 million in the settlement requires Marathon to invest in future compliance measures. By the end of the year, the company needs to reduce its emissions and fall-in-line with air quality standards.

Environmental Plans

The settlement will result in the reduction of over 2.3 million tons of pollutants. This is the equivalent of removing 487,000 cards from the road for one year.

Health Benefits

The outcome of these improvements should be a reduction of nearly 110,000 tons of organic compounds in the air. With increasing air quality should follow a reduction in respiratory diseases in nearby communities.

Focus on Fort Berthold Reservation

The Fort Berthold Indian Reservation specifically will see major improvements in their air quality and health. As many oil operations take place on reservation land, it often leaves Native populations most at-risk for associated health problems.

Accountability Measures (quote)

According to the EPA’s regional administrator, “This settlement is a major win for the health and future of our Tribal communities, including people and families who are often overburdened by pollution.”

EPA’s Initiative

The EPA’s new initiative has been to reduce methane and other harmful emissions that come from oil and gas production. This effort walks the political line between allowing gas production to continue, but setting up accountability measures.

Legal Framework

The Clean Air Act’s Prevention of Significant Deterioration program set the framework for this settlement. It targets the major emission sources around the country.

Marathon’s Response

Marathon Oil has agreed to a proposed consent decree with the settlement in order to avoid litigation and serve the public interest, but has not admitted to liability.

Public Comment Period

This decree is subject to a 30-day public comment period, where the community can give their input on the settlement.

Future Plans

Marathon will not only need to pay the fines, but will also make plans to meet the compliance requirements across its current and new facilities in North Dakota.

Investors Remain Stable

Despite the recent settlement, Marathon’s stock has remained strong. Even on the day of the announcement, the company was up 1.6% in stock value.

Financial Reporting

Marathon Oil shows not only high-valued stocks, but also significant earnings. The company earned $297 million in a three-month period earlier this year, indicating that the company will still remain strong despite the settlement costs.

Community Leaders Support

Many leaders within the community have reacted positively to the settlement. They believe that the agreement will have positive impacts on community public health and the environment.

Biden Administration Actions

The Biden administration has had many similar settlements against the oil and gas industry. This recent agreement is representative of a larger push toward requiring big oil companies to address their public impacts.

Industry Message

This settlement will indicate to other oil companies that they need to comply with environmental regulations. The risk could be both financial costs and reputational ones.

Step Toward Cleaner Air

This Marathon Oil and EPA settlement marks a step toward better air quality and public health provisions in North Dakota.

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