On September 13, 2023, the Federal Energy Regulatory Commission (FERC) fined Georgia-Pacific, a subsidiary of Koch Industries, $1.2 million for abandoning a natural gas pipeline without notifying federal regulators and lying about work already completed once it did notify them.
FERC regulates pipeline shutdowns to ensure that they are free of flammable gas and properly capped to prevent future leaks if any gas remains.
Georgia-Pacific’s application to abandon the pipeline was made in the wake of the company partially closing its paper and board bleaching operations in two Arkansas cities, Crossett and Hope. In Crossett, the shutdown cost 555 workers — about half the city’s total workforce — their jobs; in Hope, the company laid off 100 workers.
When Georgia-Pacific submitted its pipeline shutdown application to FERC, it had already completed work on the pipeline that should have been reported to the regulatory body before it began.
According to the settlement, “GPC (Georgia-Pacific) employees involved in working on the Application and the relevant post-Application submissions were aware that physical abandonment work on the Crossett Pipeline had already occurred, and that the Application and post Application submissions contained…inaccurate statements and omissions.”
FERC is not only responsible for ensuring that each pipeline has been purged of gas and all above-ground piping and valves have been removed, but also for returning the pipeline’s right-of-way to natural conditions (as much as possible). Typically, it also makes sure that no customers lose service as the result of a shutdown, though in this case the Crossett plant was the only customer.
No federal agency officially tracks explosions of abandoned gas pipelines, but they do occur if pipelines are not properly shut down. In 2017, an improperly abandoned pipeline in Firestone, Colorado caused a house to explode, killing two people; in August 2023, an explosion at an abandoned pipeline in Plum, Pennsylvania killed six people, with an investigation of the incident still underway; in 2016, Washington state regulators levied a $1.2 million on Puget Sound Energy for an improperly capped abandoned pipeline that exploded under a restaurant in Seattle.
While Georgia-Pacific admitted that its employees lied to FERC about its most recent pipeline shutdown, the company neither admitted nor denied that doing so violated the law, using legalese to attempt to shield itself from future lawsuits.
Long History of Lying
Koch Industries and its CEO, Charles Koch, are of course best known for lying about climate change.
According to the Union of Concerned Scientists, Koch is the largest funder of climate denialism, spending $162 million between 1997 and 2020 on groups and individuals willing to spread disinformation about the causes of the climate crisis. Exxon Mobil, the second largest spender, invested $39.2 million to deny scientific facts about the impact of emissions on the environment during the same period.
But Koch Industries has a long history of lying to federal regulators as well. Most notably, throughout the 1980s, Koch lied to the government by falsifying records on how much oil it collected from oil wells on land owned by Native Americans. The company falsified receipts to indicate that it had picked up less oil than it actually did and that the oil it collected was lower quality than it actually was. The company also destroyed records it was legally required to keep. The entire saga is detailed in Christopher Leonard’s 2019 book Kochland.
In 2001, the Department of Justice’s Environmental Division charged Koch Petroleum Group $20 million in damages for covering up toxic emissions at its refinery in Corpus Christi, Texas. The company had been emitting benzene (a carcinogen) beyond the limits allowed by the Clean Air Act, was storing toxic waste at its plant that it never reported to the federal government, and pretended to comply with pollution standards by building emissions control equipment that it then disconnected without notifying regulators.
In 2000, the DOJ and the Environmental Protection Agency forced Koch Industries to pay the largest civil fine ever imposed on a company under any federal environmental law to resolve claims related to more than 300 unreported oil spills from its pipelines and oil facilities in six states. The company was accused of falsifying records. The settlement called on the company to pay a $30 million civil penalty, improve its leak-prevention programs, and invest $5 million in projects supportive of the environment.
According to Violation Tracker, a database maintained by Good Jobs First, between 2000 and this latest FERC announcement, Koch has also been forced to pay $78 million in private settlements for anti-competitive practices and price fixing.