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Plant Explosion

This photo provided by Wibaux County Disaster and Emergency Services, shows an Eastern Montana oil recycling facility destroyed by an explosion and a fire, that was still burning on Dec. 31, 2012, two days after it began outside Wibaux. Three workers were injured in the explosion.

Courtesy photo

A trial begins next week for a Baker trucking company and its owner, who are accused of illegally moving hazardous materials and committing fraud before a December 2012 explosion at an oil product processing facility near Wibaux, and obstructing a federal investigation after the explosion.

Woody’s Trucking LLC and its owner, Donald Wood Jr., were indicted late last year on 14 federal charges including obstruction of justice, wire fraud, mail fraud and transportation of hazardous materials without proper placards and shipping papers.

The combined charges could result in a maximum penalty of 145 years in prison and fines totaling $3.5 million. The jury trial is scheduled to begin Monday in U.S. District Court in Billings before Judge Susan Watters.

In February 2012, the trucking company began taking natural gas condensate, a flammable hazardous material, from eastern North Dakota to Custom Carbon Processing Inc., an oil processing plant outside Wibaux, federal prosecutors argue.

However, the company didn't update its Nebraska-based insurance company that it had begun transporting hazardous materials, including in an insurance application submitted in October of that year, according to court documents. The application stated the company was transporting only non-hazardous “KCL water,” the indictment states, a reference to water containing a common salt compound.

The company continued shipping the natural gas condensate to the oil processing plant throughout the year, the indictment states, until an explosion at the facility on Dec. 29 injured three workers who were installing insulation inside the building. That day, the Woody’s Trucking contractor, Kelly Steen, was offloading the shipment when vapors from the condensate ignited.

Two tank trailers that contained the flammable liquid and were attached to Steen’s semi also ignited, and the ensuing fire burned for eight days and destroyed the facility.

“Kelly Steen was unable to provide emergency responders with shipping paper, placard or emergency response information about the hazardous material being transported as required by Hazmat law,” the indictment states.

Five days after the fire started, the Wibaux fire chief still did not know what was inside the tanker truck, he told the Associated Press at the time.

Steen was separately convicted in 2015 for transportation of hazardous materials without a placard, a felony, and was sentenced to three years on probation and ordered to pay a $2,000 fine.

During the weeks after the explosion, Wood gave the insurance company and OSHA investigators fraudulent paperwork indicating the company was shipping non-hazardous materials, the indictment states.

Prosecutors also say that on Jan. 9, once the fire was out, Wood ordered Steen to place one of the false documents, or a “bill of lading,” in the cab of his truck at the facility “to create a false impression that the bill of lading had been present in the truck during the Dec. 29, 2012, shipment.”

Based on the false documentation, prosecutors state, the insurance company paid out $250,000 to two of the injured employees who filed personal injury lawsuits against the trucking company.

Court documents don’t indicate the ignition source that caused the explosion and fire, but in separate charges against Custom Carbon Processing, prosecutors cite a laundry list of ways in which the facility allegedly failed to minimize the risk of such an incident.

The indictment accuses the company, president Peter Margiotta and project manager Mark Hurst of “not installing explosion-proof wiring, lighting ventilation, equipment and associated components suitable for a facility that is subject to releases of flammable hydrocarbon vapors; failing to control ignition sources; failing to ensure adequate fire protection and suppression systems” and other shortcomings in the facility’s construction.

Last November the three defendants were indicted on charges of felony conspiracy and two violations of the Clean Air Act, including knowingly endangering others at the plant.

The indictment also cites an email that Hurst apparently sent to Margiotta on the day the facility opened, which reads, “The control panels must be moved asap with the explosion proof wiring. We also run the risk of killing someone, not only our operators but also our customers.”

Federal prosecutors also accuse the men of ignoring repeated warnings from the facility operation’s foreman that the operation “was creating a dangerous situation due to (the condensate’s) highly volatile and flammable nature.”

“On occasion, the foreman would attempt to refuse to accept the shipments of natural gas condensate, but Mark Hurst ordered him to accept them,” court documents state.

The separate indictment against the Custom Carbon Processing, Margiotta and Hurst was filed last December. On Tuesday, Watters set a jury trial date of Oct. 22 for the case.

If convicted on all counts, the company could face a fine of up to $1.5 million, while Margiotta and Hurst could be sentenced to a maximum of 25 years in prison and a fine of $750,000.

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Morning Reporter

General assignment reporter for the Billings Gazette.