ST. PAUL (AP) — Koch Refining Co. on Thursday agreed to pay the state and federal government a $6.9 million fine and committed to making multi-million dollar improvements to its Rosemount facility.
The out-of-court settlement between the refinery and the Minnesota Pollution Control Agency ends a nearly yearlong state investigation into allegations the company failed to properly manage hazardous waste and air and water quality.
Koch did not admit liability under the tentative agreement, which is subject to federal approval. Company officials would not say which state findings they disputed.
About $2.2 million of the fine will go to the federal government, and the remaining $4.7 million will go to the state.
“The size of the penalty reflects the serious nature of the problems at the refinery,” said MPCA Commissioner Peder Larson. He believes it may be the largest fine ever paid to the state for alleged environmental violations.
The most serious problems involved disposing waste on the land and in a clean-water pond that could have affected the ground water supply, Larson said.
MPCA officials said they began the investigation after being alerted by whistleblowers at Koch a year ago about problems with the treatment system. The investigation determined that Koch violated its federal water-quality permit for handling waste water for nearly three years.
The settlement ends state and federal investigations into civil violations, Larson said.
The alleged violations included failure to report and prevent pollution, excessive emissions of sulfur dioxide, hydrogen sulfide, and carbon monoxide from processing equipment; and failure to properly manage the refinery’s above-ground storage tank system.
Koch announced in January that it would spend up to $80 million to make improvements to its facility. The agreement requires Koch to make changes to its tanks, sewers and water-handling systems.
“Frankly, we’re going to make the improvements, whatever it takes so we can protect the environment and meet the expectations of Minnesotans,” said Mike Hansel, Koch’s director for regulatory affairs.
Koch Refining Co. is a subsidiary of Koch Industries Inc., Wichita, Kan., the second-largest privately held company in the nation. Koch employs about 700 people in the Twin Cities area.
The refinery in Rosemount has had problems with water pollution in the past. In 1989, the EPA obtained a consent decree that resulted in Koch paying a $2.2 million fine to resolve lawsuits charging that Koch had discharged pollutants directly into the Mississippi River.
The company also paid a $600,000 penalty to the state that year for various alleged air-quality violations and $821,000 to the MPCA to pay for air-quality monitoring around the refinery for two years.