Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 1 of 31
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NORTH DAKOTA
`WESTERN DIVISION
`
`
`Plaintiffs,
`
`
`
`v.
`
`
`
`Defendant.
`
`
`Civil Action No.
`
`
`UNITED STATES OF AMERICA, and
`STATE OF NORTH DAKOTA,
`
`
`
`
`
`BELLE FOURCHE PIPELINE COMPANY,
`
`
`
`
`
`
`COMPLAINT
`
`
`
`
`
`The United States of America (“United States”), by the authority of the Attorney General
`
`of the United States, and on behalf of the United States Environmental Protection Agency
`
`(“EPA”) and the United States Department of Transportation, Pipeline and Hazardous Materials
`
`Safety Administration (“PHMSA”); and the State of North Dakota (the “State”), on behalf of the
`
`North Dakota Department of Environmental Quality (“NDDEQ”), file this complaint and allege
`
`as follows:
`
`NATURE OF ACTION
`
`1.
`
`This is a civil action against Belle Fourche Pipeline Company (“Belle Fourche” or
`
`“Defendant”).
`
`2.
`
`Defendant owns and operates hundreds of miles of buried pipelines that gather
`
`and transport crude oil in North Dakota, Montana, and Wyoming.
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 2 of 31
`
`
`
`3.
`
`In late 2016, one of those pipelines ruptured in Billings County, North Dakota,
`
`approximately 20 miles northwest of the city of Belfield, resulting in the discharge of
`
`approximately 14,400 barrels of crude oil, including into an unnamed tributary to Ash Coulee
`
`Creek, Ash Coulee Creek itself, the Little Missouri River, and their adjoining shorelines (the
`
`“Ash Coulee Spill”), in violation of the Clean Water Act (“CWA”), regulations promulgated
`
`pursuant to the Pipeline Safety Act (“PSA”) (referred to herein as the “Federal Pipeline Safety
`
`Regulations”), and North Dakota state law.
`
`4.
`
`The United States seeks injunctive relief, civil penalties, and punitive damages for
`
`Defendant’s violations of the Clean Water Act and the Federal Pipeline Safety Regulations
`
`pursuant to, respectively, Sections 309 and 311 of the CWA, 33 U.S.C. §§ 1319 and 1321, and
`
`Section 60120 of the PSA, 49 U.S.C. § 60120.
`
`5.
`
`The State seeks injunctive relief and civil penalties for violations of North Dakota
`
`law pursuant to N.D. Cent. Code §§ 61-28-04(22), 61-28-08, 23-29-04(8), 23-29-11, and 23-29-
`
`12. The State also seeks recovery of its costs relating to the Ash Coulee Spill pursuant to N.D.
`
`Cent. Code §§ 23-31-01 (recodified as 23.1-10-01 in 2019 and then repealed in 2021, 2021 N.D.
`
`Sess. Laws, ch. 212, § 19) and 23.1-10-12 (effective 2021).
`
`JURISDICTION AND VENUE
`
`6.
`
`This Court has jurisdiction over the subject matter of this action pursuant to
`
`Sections 309(b), 311(b)(7)(E), and 311(n) of the CWA, 33 U.S.C. §§ 1319(b), 1321(b)(7)(E),
`
`and 1321(n); Section 60120(a)(1) of the PSA, 49 U.S.C. § 60120(a)(1); and 28 U.S.C. §§ 1331,
`
`1345, and 1355.
`
`7.
`
`This Court has supplemental jurisdiction over the claims asserted by the State
`
`pursuant to 28 U.S.C. § 1367.
`
`
`
`-2-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 3 of 31
`
`
`
`8.
`
`Venue is proper in this District pursuant to Sections 309(b) and 311(b)(7)(E) of
`
`the CWA, 33 U.S.C. §§ 1319(b) and 1321(b)(7)(E); Section 60120(a)(1) of the PSA, 49 U.S.C. §
`
`60120(a)(1); and 28 U.S.C. §§ 1391 and 1395, because the violations that are the subject of this
`
`action occurred in this District, and Defendant is located and does business in this District.
`
`9.
`
`Authority to bring the United States’ claims is vested in the United States
`
`Department of Justice by Section 506 of the CWA, 33 U.S.C. § 1366; Section 60120 of the PSA,
`
`49 U.S.C. § 60120; and 28 U.S.C. §§ 516 and 519.
`
`10.
`
`Authority to bring the State’s claims is vested in NDDEQ by N.D. Cent. Code §§
`
`61-28-04, 61-28-08, 23-29-04(8), 23-29-11, and 23-29-12. NDDEQ was established on April 29,
`
`2019, and became the State agency responsible for the administration and enforcement of the
`
`environmental protection programs, laws, and rules previously administered and enforced by the
`
`North Dakota Department of Health’s Environmental Health Section. Pursuant to 2017 N.D.
`
`Laws ch. 199, § 1, the North Dakota Department of Health’s interest in the causes of action
`
`alleged in the Complaint were assigned to NDDEQ. For purpose of the Complaint, the term
`
`“NDDEQ” includes the North Dakota Department of Health for activities occurring prior to
`
`April 29, 2019, and for statutes and rules in effect prior to April 29, 2019. Due to the transition,
`
`the statutes in N.D. Cent. Code ch. 23-29 have moved to N.D. Cent. Code ch. 23.1-08, and the
`
`rules in N.D. Admin. Code arts. 33-16 and 33-20 have moved to 33.1-16 and 33.1-20. Because
`
`the violations began prior to April 29, 2019, NDDEQ references N.D. Cent. Code ch. 23-29 and
`
`N.D. Admin. Code arts. 33-16 and 33-20 in this Complaint, but for activities ongoing after the
`
`transition, NDDEQ also alleges violations of the nearly identical statutes in N.D. Cent. Code ch.
`
`23.1-08 and rules in N.D. Admin. Code arts. 33.1-16 and 33.1-20.
`
`
`
`-3-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 4 of 31
`
`
`
`11.
`
`12.
`
`DEFENDANT
`
`Belle Fourche is a Wyoming corporation.
`
`Belle Fourche owns and operates the Bicentennial Pipeline, which includes a
`
`segment that gathers and transports crude oil between the Skunk Hill pump station in Billings
`
`County, North Dakota and the Bicentennial pump station in McKenzie County, North Dakota
`
`(the “Skunk Hill to Bicentennial Segment”).
`
`13.
`
`Belle Fourche is a “person” within the meaning of Sections 311(a)(7) and 502(5)
`
`of the CWA, 33 U.S.C. §§ 1321(a)(7) and 1362(5); Section 60101(a)(17) of the PSA, 49 U.S.C.
`
`§ 60101(a)(17); and N.D. Cent. Code §§ 61-28-02(5) and 23-29-03(11).
`
`FEDERAL STATUTORY AND REGULATORY REQUIREMENTS
`
`Clean Water Act
`
`14.
`
`Section 301(a) of the Clean Water Act prohibits the discharge of any pollutant,
`
`including oil, by any person, except as authorized by and in compliance with other sections of
`
`the Act. 33 U.S.C. § 1311(a).
`
`15.
`
`The Clean Water Act authorizes the United States to “commence a civil action for
`
`appropriate relief, including a permanent or temporary injunction,” for violations of Section 301
`
`of the Act. 33 U.S.C. § 1319(b).
`
`16.
`
`Another section of the Clean Water Act, Section 311(b)(3), prohibits the
`
`discharge of oil into or upon the navigable waters of the United States and adjoining shorelines
`
`in such quantities as the President determines may be harmful to the public health or welfare or
`
`environment of the United States. 33 U.S.C. § 1321(b)(3).
`
`17.
`
`The President, through a delegation to EPA, has determined that quantities of oil
`
`that may be harmful, for purposes of Section 311, include discharges that (a) violate applicable
`
`
`
`-4-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 5 of 31
`
`
`
`water quality standards or (b) cause a film or sheen upon or discoloration of the surface of the
`
`water or adjoining shorelines. 40 C.F.R. § 110.3.
`
`18.
`
`Anyone violating Section 311(b)(3) of the CWA, 33 U.S.C. § 1321(b)(3), is
`
`subject to a civil penalty. The penalty for a spill in December 2016 (when the Ash Coulee Spill
`
`began) is up to $6,215 per barrel of oil discharged where the violation was the result of gross
`
`negligence or willful misconduct, and up to $2,072 per barrel in other cases. 33 U.S.C.
`
`§ 1321(b)(7)(A) and (D); 40 C.F.R. § 19.4.
`
`Federal Pipeline Safety Regulations
`
`19.
`
`Pursuant to Section 60102(a) of the PSA, PHMSA has promulgated regulations
`
`prescribing, among other things, minimum safety standards for pipeline operation and
`
`maintenance. 49 U.S.C. § 60102(a).
`
`20.
`
`As relevant here, these regulations are codified at 49 C.F.R. Part 195 (the
`
`“Federal Pipeline Safety Regulations”).
`
`21.
`
`The Federal Pipeline Safety Regulations contain requirements that apply to
`
`operators of hazardous liquid pipelines that could affect a “high consequence area.” 49 C.F.R. §
`
`195.452.
`
`22.
`
`The Federal Pipeline Safety Regulations define “high consequence area”
`
`(“HCA”) to include an “unusually sensitive area.” 49 C.F.R. § 195.450. An unusually sensitive
`
`area, in turn, is defined as “a drinking water or ecological resource area that is unusually
`
`sensitive to environmental damage from a hazardous liquid pipeline release.” 49 C.F.R. § 195.6.
`
`23.
`
`The Federal Pipeline Safety Regulations define drinking water and ecological
`
`resources, for purposes of identifying unusually sensitive areas. A drinking water resource is
`
`defined to include the water intake for a “community water system” and the “source water
`
`protection area” for a community water system. 49 C.F.R. § 195.6(a). An ecological resource is
`
`
`
`-5-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 6 of 31
`
`
`
`defined to include an area containing a critically-imperiled species or an imperiled, threatened, or
`
`endangered species that is aquatic, aquatic dependent, or terrestrial with a limited range. 49
`
`C.F.R. § 195.6(b)(1) and (4).
`
`24.
`
`The Federal Pipeline Safety Regulations require operators of pipelines that could
`
`affect a “high consequence area” to develop and implement a written integrity management
`
`program (“IMP”). 49 C.F.R. § 195.452(b).
`
`25.
`
`This IMP must assess and address the risks to the integrity of each segment of
`
`pipeline, following “recognized industry practices,” unless otherwise specified in 49 C.F.R. §
`
`195.452 or the “operator demonstrates that an alternative practice is supported by a reliable
`
`engineering evaluation and provides an equivalent level of public safety and environmental
`
`protection.” 49 C.F.R. § 195.452(b).
`
`26.
`
`In assessing the risks to the integrity of each pipeline segment, the operator must
`
`consider, among other things, “[l]ocal environmental factors that could affect the pipeline,” such
`
`as subsidence (i.e. the gradual caving in or sinking of an area of land), “geo-technical hazards,”
`
`and “[p]otential natural forces inherent in the area (flood zones, earthquakes, subsidence areas,
`
`etc.).” 49 C.F.R. § 195.452(e) and 49 C.F.R. Part 195, Appendix C § I.B(12).
`
`27.
`
`An operator “must continually change the [IMP] to reflect operating experience,
`
`conclusions drawn from results of the integrity assessments, and other maintenance and
`
`surveillance data.” 49 C.F.R. § 195.452(f). The IMP must include, among other things, a
`
`“continual process of assessment and evaluation to maintain a pipeline’s integrity,”
`
`“[i]dentification of preventative and mitigative measures to protect the high consequence area,”
`
`and a “process for review of integrity assessment results and information analysis by a person
`
`qualified to evaluate the results and information.” 49 C.F.R. § 195.452(f)(5), (6), and (8).
`
`
`
`-6-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 7 of 31
`
`
`
`28.
`
` The operator must also “take measures to prevent and mitigate the consequences
`
`of a pipeline failure that could affect a high consequence area,” including “conducting a risk
`
`analysis of the pipeline segment to identify additional actions to enhance public safety or
`
`environmental protection.” 49 C.F.R. § 195.452(i)(1).
`
`29.
`
`The Federal Pipeline Safety Regulations require operators to have a means to
`
`detect leaks on their pipeline systems. 49 C.F.R. § 195.452(i)(3). The operator “must evaluate the
`
`capability of its leak detection means and modify, as necessary, to protect the high consequence
`
`area.” Id.
`
`30.
`
`The United States may bring an action to enforce the Federal Pipeline Safety
`
`Regulations. 49 U.S.C. § 60120(a)(1). In such an action, the Court may award appropriate relief,
`
`including a temporary or permanent injunction, punitive damages, and civil penalties. Id.
`
`STATE STATUTORY AND REGULATORY REQUIREMENTS
`
`Permit Required for Discharges
`
`31.
`
`North Dakota Century Code § 61-28-06(2)-(3) makes it unlawful for a person to
`
`discharge any wastes, except in compliance with a valid permit issued by NDDEQ.
`
`32.
`
`North Dakota Administrative Code § 33-16-01-02 provides that a person must file
`
`a NPDES permit application before discharging “any waste through a point source into a surface
`
`water.” A NPDES permit issued by NDDEQ is referred to as a North Dakota pollutant discharge
`
`elimination system (“NDPDES”) permit.
`
`Pollution and Degradation of Water Quality Prohibited
`
`33.
`
`North Dakota Century Code § 61-28-06(1)(a) makes it unlawful for a person “[t]o
`
`cause pollution of any waters of the state or to place or cause to be placed any wastes in a
`
`location where they are likely to cause pollution of any waters of the state.”
`
`
`
`-7-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 8 of 31
`
`
`
`34.
`
`North Dakota Century Code § 61-28-06(1)(b) makes it unlawful for a person “[t]o
`
`discharge any wastes into any waters of the state or to otherwise cause pollution, which reduces
`
`the quality of such waters below the water quality standards established therefor by the
`
`department.”
`
`35.
`
`North Dakota Administrative Code § 33-16-02.1-11(2) makes it unlawful to
`
`discharge into the waters of the state “untreated industrial wastes or other wastes which contain
`
`substances . . . which may endanger public health or degrade the water quality of water usage.”
`
`36.
`
`North Dakota Administrative Code § 33-16-02.1-09 provides for the classification
`
`of the state’s surface water and contains the standards with which the various classifications of
`
`surface water must comply, including physical and chemical criteria. “[S]treams are classified as
`
`the class of water quality which is to be maintained in the specified stream.” Appendix I, N.D.
`
`Admin. Code ch. 33-16-02.1. At all relevant times, the numeric maximum benzene standard for
`
`Class III streams was 51 μg/l. N.D. Admin. Code § 33-16-02.1-09(3) (2014).
`
`37.
`
`North Dakota Administrative Code § 33-16-02.1-08(1) contains the state’s
`
`narrative water quality standards, which, as relevant here:
`
`a.
`
`Require that all waters of the state be free from floating oil or scum
`
`attributable to industrial or other discharges in amounts that are “unsightly or deleterious”;
`
`substances attributable to industrial or other discharges that are in concentrations or
`
`combinations “toxic or harmful to humans, animals, plants, or resident aquatic biota”; and “oil or
`
`grease residue attributable to wastewater, which causes a visible film or sheen upon the waters or
`
`any discoloration of the surface of adjoining shoreline or causes a sludge or emulsion to be
`
`deposited beneath the surface of the water or upon the adjoining shorelines or prevents classified
`
`uses of such waters.” N.D. Admin. Code § 33-16-02.1-08(1)(a).
`
`
`
`-8-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 9 of 31
`
`
`
`b.
`
`Prohibit the discharge of pollutants, which “[c]ause a public health hazard
`
`or injury to environmental resources; [i]mpair existing or reasonable beneficial uses of the
`
`receiving waters; or [d]irectly or indirectly cause concentrations of pollutants to exceed
`
`applicable standards of the receiving waters.” N.D. Admin. Code § 33-16-02.1-08(1)(e).
`
`Spill Reporting Required
`
`38.
`
`North Dakota Administrative Code § 33-16-02.1-11(4) provides that “[a]ny spill
`
`or discharge of waste which causes or is likely to cause pollution of waters of the state must be
`
`reported immediately.” The owner, operator, or person responsible must “provide all relevant
`
`information about the spill.” Id. NDDEQ then has the authority to require the owner or operator
`
`to take actions necessary to comply with N.D. Admin. Code ch. 33-16-02.1, including taking
`
`immediate remedial measures and determining the extent of the pollution. Id.
`
`Unpermitted Disposal and Abandonment of Solid Waste Prohibited
`
`39.
`
`North Dakota Century Code § 23-29-07 and North Dakota Administrative Code §
`
`33-20-02.1-01 makes it unlawful to own, operate, or use an unpermitted facility for solid waste
`
`disposal.
`
`40.
`
`North Dakota Administrative Code § 33-20-01.1-04(1) provides “[a]ny person
`
`who owns or operates any premises, business establishment, or industry is responsible for the
`
`solid waste management activities, such as storage, transportation, resource recovery, or disposal
`
`of solid waste generated or managed at that person’s premises, business establishment, or
`
`industry.”
`
`41.
`
`North Dakota Administrative Code § 33-20-01.1-04(2) provides “[n]o solid waste
`
`may be delivered to a facility which is not in compliance with this article or abandoned upon any
`
`. . . private premises.”
`
`
`
`-9-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 10 of 31
`
`
`
`Penalty
`
`42.
`
`North Dakota Century Code § 61-28-08(4) provides that a person who violates
`
`N.D. Cent. Code ch. 61-28 or a “rule, order, limitation, or other applicable requirement
`
`implementing this chapter, is subject to a civil penalty not to exceed twelve thousand five
`
`hundred dollars per day per violation.”
`
`43.
`
`North Dakota Century Code § 23-29-12(1) provides that “[a]ny person who
`
`violates this chapter or any permit condition, rule, order, limitation, or other applicable
`
`requirement implementing this chapter is subject to a civil penalty not to exceed twelve thousand
`
`five hundred dollars per day per violation . . . .”
`
`Injunctive Relief
`
`44.
`
`North Dakota Century Code § 61-28-08(5) authorizes NDDEQ to “maintain an
`
`action in the name of the state against any person to enjoin any threatened or continuing violation
`
`of any provision of this chapter or any permit condition, rule, order, limitation, or other
`
`applicable requirement implementing this chapter.”
`
`45.
`
`North Dakota Century Code § 23-29-11 authorizes NDDEQ to maintain an action
`
`in the name of the state against any person to enjoin actions or practices that “constitute or will
`
`constitute a violation of this chapter, or any rule, regulation, or order” or for an order directing
`
`compliance.
`
`Cost Recovery
`
`46.
`
`North Dakota Century Code § 23-31-01, which was recodified as 23.1-10-01 in
`
`2019, authorizes NDDEQ to “recover from the parties responsible for an environmental
`
`emergency the reasonable and necessary state costs incurred in assessment, removal, corrective
`
`
`
`-10-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 11 of 31
`
`
`
`action, or monitoring as a result of an environmental emergency in violation of chapter [23-29 or
`
`61-28].”
`
`47.
`
`An “environmental emergency” is “a release into the environment of a substance
`
`requiring an immediate response to protect public health or welfare or the environment from an
`
`imminent and substantial endangerment and which is in violation of chapter [23-29 or 61-28].”
`
`N.D. Cent. Code § 23-31-01.
`
`48.
`
`“Reasonable and necessary costs” are “those costs incurred by [NDDEQ] as a
`
`result of the failure of the parties responsible for the environmental emergency to implement
`
`appropriate assessment and corrective action after receipt of written notice from [NDDEQ].”
`
`N.D. Cent. Code § 23-31-01.
`
`49.
`
`Additionally, North Dakota Century Code Chapter 23.1-10, which went into
`
`effect on July 1, 2021, but is retroactive in application (2021 N.D. Sess. Laws, ch. 212, § 20),
`
`prohibits releases of regulated substances and authorizes NDDEQ to respond to such releases by
`
`conducting and overseeing “environmental assessment, removal, corrective action, or
`
`monitoring.” N.D. Cent. Code §§ 23.1-10-02 and 23.1-10-06.
`
`50.
`
`North Dakota Century Code § 23.1-10-12 authorizes NDDEQ to “recover its
`
`reasonable and necessary expenses incurred under this chapter, including all corrective action
`
`costs and administrative and legal expenses, in a civil action brought against a responsible
`
`party.” NDDEQ’s “certification of expenses is prima facie evidence the expenses are reasonable
`
`and necessary.” N.D. Cent. Code § 23.1-10-12. NDDEQ must “provide written notice to a
`
`responsible party before incurring costs, except when prior notice is not possible because the
`
`identity of the responsible party is unknown or situations require emergency remedial efforts.”
`
`Id.
`
`
`
`-11-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 12 of 31
`
`
`
`GENERAL ALLEGATIONS
`
`Bicentennial Pipeline/Ash Coulee Spill
`
`51.
`
`The Bicentennial Pipeline runs from Dickinson, North Dakota to the Bicentennial
`
`pump station in McKenzie County, North Dakota.
`
`52.
`
`The segment of the Bicentennial Pipeline between the Skunk Hill pump station
`
`and the Bicentennial pump station (referred to herein as the “Skunk Hill to Bicentennial
`
`Segment”) is six inches in diameter and approximately 58 miles long. It transports crude oil from
`
`the Skunk Hill station to the Bicentennial station.
`
`53.
`
`The Skunk Hill to Bicentennial Segment passes through Little Missouri National
`
`Grassland, the largest grassland in the country.
`
`54.
`
`The Skunk Hill to Bicentennial Segment crosses under both Ash Coulee Creek
`
`and the Little Missouri River.
`
`55.
`
`56.
`
`57.
`
`Ash Coulee Creek is a tributary to the Little Missouri River.
`
`The Little Missouri River is a tributary to the Missouri River.
`
`According to Belle Fourche, at the time of the Ash Coulee Spill, the average flow
`
`on the Skunk Hill to Bicentennial Segment was approximately 1,000 barrels per hour (24,000
`
`barrels per day).
`
`58.
`
`At all relevant times, the Skunk Hill to Bicentennial Segment could affect a High
`
`Consequence Area, as that term is defined in 49 C.F.R. § 195.450.
`
`59.
`
`At the time of the Ash Coulee Spill, the Skunk Hill to Bicentennial Segment was
`
`included in the written Integrity Management Plan developed by Belle Fourche to comply with
`
`49 C.F.R. § 195.452.
`
`
`
`-12-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 13 of 31
`
`
`
`60.
`
`The National Pipeline Mapping System (“NPMS”) identifies pipelines regulated
`
`by PHMSA, along with certain other information, such as the locations of High Consequence
`
`Areas. At all relevant times, the NPMS identified portions of the Little Missouri National
`
`Grassland as a High Consequence Area.
`
`Failure to Adequately Address Known Risk of Slope Failure
`
`The Skunk Hill to Bicentennial Segment passes through hilly, unstable terrain,
`
`61.
`
`which is prone to failure and other mass movements.
`
`62.
`
`On or about December 1, 2016, the Bicentennial Pipeline ruptured approximately
`
`17.4 pipeline miles west of the Skunk Hill station, in Billings County, North Dakota (the “Site”).
`
`63.
`
`Prior to the Ash Coulee Spill, there were visible signs that the hillside at the Site
`
`was unstable and failing.
`
`64.
`
`Prior to the Ash Coulee Spill, Belle Fourche was aware of the risk of unstable
`
`soils, slope failure, and other mass movements at the Site.
`
`65.
`
`In fact, there was a landslide, slope failure, or other mass movement at the Site in
`
`or before 2012, which did not cause the pipeline to rupture.
`
`66.
`
`Following this landslide, slope failure, or other mass movement, Belle Fourche, in
`
`2013, replaced a section of pipeline at the Site using the HDD method.
`
`67.
`
`Belle Fourche failed, however, to obtain geotechnical data specific to the Site
`
`(e.g. soil borings) and use that data to adequately address the risk of unstable soils, slope failure,
`
`and other mass movements.
`
`68.
`
`Belle Fourche failed to conduct an adequate risk analysis, prior to the Ash Coulee
`
`Spill, that properly considered the risk of unstable soils, slope failure, and other mass movement
`
`at the Site.
`
`
`
`-13-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 14 of 31
`
`
`
`69.
`
`As a result of this failure, Belle Fourche failed to identify and take additional
`
`actions – such as rerouting the pipeline – to prevent and mitigate the consequences of slope
`
`failure and other mass movement at the Site that could expose the pipeline to excessive external
`
`loads.
`
`Failure to Correct Mis-Calibrated Flow Meter at Bicentennial Station
`
`70.
`
`At the time of the Ash Coulee Spill, Belle Fourche used volume balancing to
`
`detect leaks on the Skunk Hill to Bicentennial Segment.
`
`71.
`
`The volume balancing method involves comparing the incoming (or receipt) and
`
`outgoing (or delivery) volumes, based on flow meter data. A discrepancy or “short” between the
`
`incoming and outgoing volumes would indicate a leak.
`
`72.
`
`The volume balancing method was dependent on the accuracy of flow meters at
`
`the Skunk Hill and Bicentennial stations.
`
`73.
`
`At the time of the Ash Coulee Spill, flow rate data from the Skunk Hill and
`
`Bicentennial meters was transmitted in real time, via a supervisory control and data acquisition
`
`(“SCADA”) system, to Defendant’s control room in Casper, Wyoming.
`
`74.
`
`At the time of the Ash Coulee Spill, the flow meter at the Bicentennial station was
`
`mis-calibrated.
`
`75.
`
`The mis-calibration of the Bicentennial meter was the result of two separate
`
`blunders by Belle Fourche.
`
`76.
`
`First, Belle Fourche performed an improper “zero calibration.” A zero calibration
`
`resets the meter to read the conditions at the time of the zero calibration as zero flow. Thus, a
`
`proper zero calibration would only be done when there is no actual flow. Belle Fourche did a
`
`zero calibration when there was flow through the meter. As a result of the improper zero
`
`
`
`-14-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 15 of 31
`
`
`
`calibration, the Bicentennial meter measured a constant 145 barrels (give or take a barrel or two)
`
`more than the actual flow.
`
`77.
`
`Upon information and belief, Belle Fourche attempted to correct the improper
`
`zero calibration by applying a negative 16.2% “correction factor” (when it should have just done
`
`another zero calibration when there was no actual flow). The negative correction factor reduced
`
`the measured flow by 16.2% relative to the actual flow.
`
`78.
`
`79.
`
`The net effect of these two mistakes varied depending on the actual flow.
`
`Following these two mistakes, the flow measured by the Bicentennial meter
`
`equaled the actual flow (in barrels per hour) plus 145 barrels per hour (as a result of the improper
`
`zero calibration) minus 16.2% of the sum of the actual flow and 145 barrels per hour. So, for
`
`example, if the actual flow was 1,000 barrels per hour – the average actual flow on the Skunk
`
`Hill to Bicentennial Segment in the 30 days leading up to the Ash Coulee Spill – the
`
`Bicentennial meter would read approximately 960 barrels per hour (i.e. 1,000 bph + 145 bph –
`
`0.162 x (1,000 bph + 145 bph)).
`
`80.
`
`The mistakes canceled each other out only when actual flow was 750 barrels per
`
`hour.
`
`81. When actual flow was less than 750 barrels per hour, the Bicentennial meter read
`
`more than actual flow.
`
`82. When actual flow was more than 750 barrels per hour, the Bicentennial meter
`
`read less than actual flow.
`
`83.
`
`By July 2016, Belle Fourche was aware that the Bicentennial meter was mis-
`
`calibrated, yet did nothing to correct it.
`
`
`
`-15-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 16 of 31
`
`
`
`84.
`
`The difference between the flow, as measured by the Bicentennial meter, and the
`
`actual flow at normal operating flows was minimal. As noted above, there was no difference
`
`when actual flow was 750 barrels per hour (at that flow the two mistakes cancelled each other
`
`out). When the actual flow was 1,000 barrels per hour, the average flow at the time of the Ash
`
`Coulee Spill according to Belle Fourche, the Bicentennial meter was under-measuring actual
`
`flow by about 40 barrels per hour (or approximately 4%).
`
`85.
`
`At the time of the Ash Coulee Spill, Belle Fourche knew, or should have known,
`
`the magnitude of the mis-calibration of the Bicentennial meter.
`
`86. While the difference between the actual flow and the flow measured by the
`
`Bicentennial meter varied based on the actual flow, as described above, the relative magnitude of
`
`the mis-calibration of the Bicentennial meter did not change in the weeks leading up to the Ash
`
`Coulee Spill.
`
`87.
`
`Accordingly, a significant increase in the discrepancy or short between the
`
`outgoing volume, as measured by the Skunk Hill meter, and the incoming volume, as measured
`
`by the Bicentennial meter, would be indicative of a leak.1
`
`
`
`
`
`
`
`
`1 Notably, the absence of an imbalance would not definitively indicate the absence of a leak
`on the Skunk Hill to Bicentennial Segment. At the time of the Ash Coulee Spill, in addition to oil
`from the Skunk Hill Station, oil was added from 11 third-party well-pads. The volume of oil
`added from these well-pads was not communicated to the control room via the SCADA system.
`Therefore, operators of the Skunk Hill to Bicentennial Segment could not know in real time how
`much, if any, oil was being added from the third-party well-pads at any given time. The lack of
`instrumentation meant that Defendant could not safely assess the volume of oil being transported
`in the Skunk Hill to Bicentennial Segment or determine if the segment was holding oil when it
`was shutdown with no flow.
`
`
`
`
`-16-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 17 of 31
`
`
`
`Failure to Immediately Shutdown Based on Flow Imbalance
`
`88. When the Bicentennial Pipeline ruptured, on or about the evening of December 1,
`
`2016, there was a sudden and significant increase in the magnitude of the discrepancy (or short)
`
`between the outgoing volume, as measured by the Skunk Hill meter, and the incoming volume,
`
`as measured by the Bicentennial meter.
`
`89.
`
`On or about the evening of December 1, 2016, Belle Fourche was aware of this
`
`sudden and increased discrepancy, or should have been.
`
`90.
`
`This sudden and significant increase in the discrepancy between the outgoing
`
`volume, as measured by the Skunk Hill meter, and the incoming volume, as measured by the
`
`Bicentennial meter was indicative of a pipeline leak – a condition that presented an immediate
`
`hazard to persons or property.
`
`91.
`
`At Belle Fourche, a “scheduler” is responsible for coordinating oil deliveries with
`
`customers and connecting pipelines. The scheduler receives daily information from Defendant’s
`
`control room (referred to as the “Current DATE” report) about volumes shipped from and to
`
`various points along the pipelines. The scheduler puts this information into a spreadsheet that
`
`includes the Skunk Hill and Bicentennial stations, which allows the scheduler to spot differences
`
`in the incoming and outgoing volumes at these two locations.
`
`92.
`
`On December 3, 2016, the scheduler reviewed the Current DATE report and
`
`noticed that the discrepancy in the outgoing volume from the Skunk Hill station and the
`
`incoming volume to the Bicentennial station (the pipeline “short”) was substantially greater than
`
`what he was used to seeing.
`
`93.
`
`That same day, December 3, 2016, the scheduler reported the increased pipeline
`
`short to the Belle Fourche control room.
`
`
`
`-17-
`
`

`

`Case 1:22-cv-00089-CRH Document 1 Filed 05/23/22 Page 18 of 31
`
`
`
`94.
`
`According to Belle Fourche, after the scheduler reported the increased pipeline
`
`short, a Belle Fourche controller reviewed recent pressure and flow data from the Skunk Hill
`
`station (called a “trend”) and spoke with a field employee to find out whether there were any
`
`maintenance or other issues that may have accounted for the discrepancy.
`
`95.
`
`According to Belle Fourche, the controller and field employee erroneously
`
`concluded that the discrepancy was attributable to the mis-calibrated Bicentennial meter (and
`
`therefore not a leak).
`
`96. While the mis-calibrated Bicentennial meter would explain a modest pipeline
`
`short (when actual flows were more than 750 barrels per hour), it would not have reasonably
`
`explained the sudden and significant increase in the short, which should have been apparent to
`
`Belle Fourche’s controllers on December 1, 2016 and which was actually observed by the
`
`scheduler and reported to the control room on December 3, 2016.
`
`97.
`
`Despite this plain sign of a significant leak, Belle Fourche controllers did nothing
`
`more than check the trend of pressure and flow from Skunk Hill and talk with a field employee.
`
`98.
`
`Dismissing the possibility of a leak, Belle Fourche continued to operate the Skunk
`
`Hill to Bicentennial Segment as usual for days, until the morning of December 5, 2016, when
`
`Belle Fourche received a call from a local rancher reporting the spill.
`
`Cause and Impact of Ash Coulee Spill
`
`99.
`
`The Ash Coulee Spill was caused by