DEQ puts forth maximum fine for CHS refinery's toxic pollution into Yellowstone River

After continual violations by the CHS refinery in Laurel, the Montana Department of Environmental Quality has issued a $100,000 fine for toxic pollution discharged into the Yellowstone River.

The fine is the maximum allowed under state law.

From June 2021 to January 2025, CHS failed 32 of 44 tests, which must be done at least monthly, examining the toxicity of the wastewater the refinery dumps into the nearby Yellowstone River, according to a summary of daily toxicity failures.

A view from CHS’ coker tower shows some of the refinery expansion on the south end of Laurel. LARRY MAYER, Billings Gazette In a proposed Sept. 24 consent order, DEQ stated that CHS “had control over those permit violations, but did not take timely, reasonable precautions to prevent” those permit violations. Furthermore, the consent order stated CHS, a global agribusiness, should be aware of regulations and could have foreseen the violations.

CHS has called elements of the consent order a mischaracterization. An environmental group said the DEQ action isn't enough to protect the environment.

The tests assessed toxicity from CHS’ wastewater; nitrogen or ammonia in the water are considered a likely cause of recent failures. The assessments are designed to protect the Yellowstone River and, in this case, fish and aquatic life. A failure of the test happens when the planned river discharge is lethal for 50% or more of an examined species.

The consent order obtained by the Gazette was part of a larger request for hundreds of pages documenting violations leading to the enforcement action.

DEQ initiated an enforcement action in April, however repeated violations by CHS have been noted for years. An April notice said the action was warranted to address past violations and to be certain the refinery has addressed the cause of the failures. It noted a cause for recent fluctuations in toxics had yet to be determined.

After acknowledging the past violations in 2021, DEQ approved renewal of CHS’ discharge permit in 2022. It then approved the permit again in June 2024 with modifications as part of a settlement between DEQ and CHS.

In that settlement, part of CHS’ request was for weakened standards for hydrogen sulfide, a toxic pollutant. However, the DEQ standard remained in place. CHS discharges treated wastewater directly into the Yellowstone River, which communities like Billings and other downstream communities rely on for their water supply.

Following the statute of limitations currently in place, the refinery looks to be fined for only two years after August 2023, which is 12 violations in total. A definitive source of what is causing the violations had yet to be clearly identified in reports up until that April enforcement action, according to an April document.

DEQ has “discretion” when pursuing enforcement of permit violations, DEQ spokeswoman Madison McGeffers said in an email to the Gazette. Identifying and reducing the cause of toxicity can take varying time to complete because of necessary upgrades and operational changes that may need to be incorporated.

CHS is currently reviewing elements of the proposed consent order, saying some of the details are inaccurate. This year, the refinery has passed the tests from February to August after failing nearly every quarter since the third quarter of 2021.

“Since 2021, CHS has been working collaboratively with MDEQ to successfully complete a variety of activities and consistently monitor and test our water discharges in accordance with our wastewater discharge permit,” a CHS spokesperson wrote in an email statement to the Gazette. “During this time, we have been in consistent communication with MDEQ and have expended significant resources to ensure we meet the relevant state and federal environmental requirements.”

CHS declined to specify which statements were inaccurate in the consent order and pointed out that the document is still a draft and could be changed in the following days and weeks.

The petroleum refinery is one of CHS’ two owned crude oil refineries in the U.S. In operation since the 1930s, the Laurel refinery uses Canadian crude oil to make petroleum-based products including propane, gasoline and asphalt, among others.

In a similar case, the state didn't require CHS to meet water quality standards for arsenic after DEQ imposed arsenic limits in 2015. CHS was given time by the agency then to attain the appropriate technology it needed to treat the carcinogen and put itself fully in compliance by November this year.

CHS has previously defended its actions in its delayed implementation of those requirements. A CHS spokesperson told the Gazette in 2019 that "protection of the environment where we live and work is a central tenet to the daily operations of our refinery in Laurel."

As part of its permit, CHS is required to submit quarterly reports, which are then reviewed by DEQ to address any noncompliance issues. Because of the noted toxicity in the refinery’s discharge, tests have been monthly and CHS provides quarterly reports on reduction and identification efforts.

After past challenges of the plant’s permit, environmental groups sued in April 2024 over DEQ issuing the 2022 permit. They alleged that the issued permit did not ensure the refinery would comply with water quality standards, including with test failures. The case is still ongoing and currently awaits a judge’s decision for a motion to dismiss.

Montana Environmental Information Center was one of the parties that filed the lawsuit. The group and its attorneys learned of the proposed penalty when contacted by the Gazette.

In an interview, MEIC Director Anne Hedges expressed frustration and anger with DEQ’s proposed consent order. She considers the proposed $100,000 fine to be “chump change” for CHS. CHS is the largest farmer-owned cooperative in the U.S. and reported $1.1 billion in net income from its $40 billion in revenue last year.

“We want to know where DEQ has been,” Hedges said. “Why did they wait so long? They've known about these violations for years.”

Hedges said while the tests only indicate violations for a single day, she believes the refinery was likely in violation continuously quarter after quarter. In the proposed consent order, no action plan was listed, although the Water Protection Bureau requested a compliance plan and schedule with the document, according to an April notice.

She described the proposed fine by DEQ, although technically the legal maximum, as akin to a handshake than a slap on the wrist. She pointed to EPA's stricter fines charging around $60,000 a day for noncompliance around water quality violations. She said state laws could be adjusted to reflect the severity of the CHS violations.

“The Yellowstone River should not be a dumping ground for toxic waste, and DEQ has been turning a blind eye for years,” Hedges said. “Now it appears they are doing this to allow the company to continue unimpeded toxic pollution, putting toxic pollution into the Yellowstone River. This does not look like it's a serious, meaningful move at all, because if it were, they would have to have a plan to fix whatever the problem is that's causing their discharges.”

DEQ puts forth maximum fine for CHS refinery's toxic pollution into Yellowstone River

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