Texas co. to pay $2.4M penalty for ND oil terminal violation

BISMARCK, N.D. (AP) — A Texas company and its subsidiaries will pay a $2.4 million penalty to resolve alleged violations of the Clean Air Act for a crude oil transloading facility the companies formerly owned and operated on the Fort Berthold Indian Reservation in North Dakota, the U.S. Environmental Protection Agency said Tuesday.

The EPA said the penalties are against US Development Group, LLC, and two subsidiaries. The agency says the companies constructed and operated the Van Hook Crude Terminal before receiving the necessary permit, a violation of the Clean Air Act.

The companies submitted a permit application to the EPA in October 2011, and the agency issued the permit in August 2012, with an effective date of Sept. 1, 2012. Despite not yet having received a permit, the companies began constructing the terminal around October 2011 and began operating the facility in early February 2012, months before the permit was issued and became effective, the EPA said.

The companies also failed to notify the EPA before the facility's tanks were constructed and filled, so the agency could inspect the tanks, the EPA said.

In a statement, US Development Group said Tuesday the company is satisfied with the settlement reached with the U.S. Department of Justice. The company maintains that USDG and its subsidiaries adhered to the EPA's permitting process.

US Development Group and its subsidiaries sold the terminal to Plains All American Pipeline in December 2012. Plains subsequently ceased operating the terminal and sold its interest to another party that now transports fracking sand in and out of the facility. The storage tanks have been dismantled.