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Environmental and safety record
From 1999 to 2003, Koch Industries was assessed "more than $400 million in fines, penalties and judgments." [27]
[ edit] Pipeline accidents Koch Industries was fined $35 million for 300 alleged pipeline spills across six states from 1990 to 1997, adding up to 3 million US gallons (11,000 m3) of oil. The US Government had originally proposed fining Koch $71 million to $214 million in penalties for violations of the Clean Water Act by those spills. [28]
Koch's Sterling butane pipeline had a leak in Lively, Texas, on August 24, 1996. Two teenagers on the way to report the leak drove into the unseen butane cloud, and were killed when the gas exploded and burned. The National Transportation Safety Board concluded that severe external pipeline corrosion was the cause of the failure, and recommended to Koch to improve corrosion evaluation procedures. Although Koch distributed pamphlets about safety around the pipelines, they failed to maintain an up-to-date mailing list. Only 5 out of 45 residences in the area of the accident had received pamphlets. The families of the dead had not. [29] [30]
In 1999, a Texas jury found that negligence had led to the rupture of the Koch pipeline that fueled the explosion killing the two teenagers, and awarded a $296 million verdict — "the largest compensatory damages judgment in a wrongful death case against a corporation in U.S. history". [27]
In a statement released in 2010, Koch Industries responded to the criticisms in Jane Mayer's article in The New Yorker, “ Covert Operations: The Billionaire Brothers Who are Waging a War Against Obama,”
The August, 1996 pipeline accident in Texas was a tragedy. Koch accepted responsibility immediately for the incident, which is the only event of its kind in the company’s history. The thorough review conducted of this pipeline the year before the accident did not uncover any issues that posed a foreseeable threat to public safety. The bacteria-induced corrosion that caused the accident acted more quickly to damage this pipeline than had ever been documented by any industry expert. Koch’s cooperative efforts to identify the source and cause of this problem so that this knowledge could be shared throughout industry were praised by the National Transportation Safety Board, which did a two-year investigation into this incident. [31]
[ edit] Pollution and resource fines In March 1999, Koch Petroleum Group, a Koch Industries subsidiary, pled guilty to charges that it had negligently dumped hundreds of thousands of gallons of aviation fuel into wetlands near the Mississippi River from its refinery in Rosemount, Minnesota, and that it had also illegally dumped a million gallons of high- ammonia wastewater onto the ground and into the Mississippi River. Koch Petroleum paid the Dakota County Park System a $6 million fine and $2 million in remediation costs, and was ordered to serve three years of probation. [32]
In 1999, a federal jury found that Koch Industries had stolen oil from government and American Indian lands, had lied about its purchases more than 24,000 times, and was fined $553,504. [33]
In January 2000, a Koch Industries subsidiary, Koch Pipeline, agreed to a $35 million settlement with the U.S. Justice Department and the State of Texas. This settlement, including a $30 million civil fine, was incurred for the firm's three hundred oil spills in Texas and five other states going back to 1990. [34] [35] [36] The spills resulted in more than 3 million US gallons (11,000 m3) of crude oil leaking into ponds, lakes, streams and coastal waters. [37]
In 2001, the company reached two settlements with the government. In April, the company reached a $20 million settlement in exchange for admitting to covering up environmental violations at its refinery in Corpus Christi, Texas. [38] [39] That May, Koch Industries paid $25 million to the federal government to settle a federal lawsuit that found the company had improperly taken more oil than it had paid for from federal and Indian land. [33] [40]
In June 2003, the US Commerce Department fined Koch Industries subsidiary Flint Hill Resources a $200,000 civil penalty. The fine settled charges that the company exported crude petroleum from the US to Canada without proper US government authorization. The Commerce Department’s Bureau of Industry and Security said from July 1997 to March 1999, Koch Petroleum (later called Flint Hill Resources) committed 40 violations of Export Administration Regulations. [41]
In 2006, Koch Industries’ subsidiary Flint Hill Resources was fined nearly $16,000 by the EPA for 10 separate violations of the Clean Air Act at its Alaska oil refinery facilities, and required to spend another $60,000 on safety equipment needed to help prevent future violations. [42]
In 2007, Koch Nitrogen's plant in Enid, Oklahoma, was listed as the third highest company releasing toxic chemicals in Oklahoma, according to the EPA, ranking behind Perma-Fix Environmental Services in Tulsa and Weyerhaeuser Co. in Valliant. [43] The facility produces about 10% of the US national production of anhydrous ammonia, as well as urea and UAN. [44]
In 2010, Koch Industries was ranked 10th on the list of top US corporate air polluters, the "Toxic 100 Air Polluters", by the Political Economic Research Institute at the University of Massachusetts Amherst. [45]
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