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Operator of MT oil-recycling plant found guilty of federal charges connected to 2012 explosion

Peter Margiotta was president of Custom Carbon Processing
Posted at 10:12 AM, Sep 30, 2019
and last updated 2019-09-30 12:12:56-04

The former president of a Wyoming oil-recycling firm was found guilty Friday of multiple federal charges that led to a 2012 explosion at a Wibaux plant that injured three workers.

Peter Margiotta, 62, of Edmonton, Alberta, Canada, was found guilty of conspiracy and two violations of the federal Clean Air Act. He faces a maximum of 15 years in prison and a $250,000 fine. The company, Custom Carbon Processing, Inc., which is owned by Green Oasis Environmental Inc. of Canada, also faces a $1 million fine.

The jury trial began Sept. 23 and was heard by U.S. District Judge Susan P. Watters, who did not set an immediate sentencing date, according to a press release from U.S. Attorney Kurt Alme.

Prosecutors said the conviction shows that companies can't cut corners in building facilities for the oil industry. In July 2012, Margiotta directed the opening of the Michels Disposal Well and Oil Reclamation Facility, which recycled slop oil from the booming Bakken shale that was otherwise designated for waste, then sold it back to other producers.

Margiotta ignored warnings from a project manager that the plant wasn't safe, prosecutors said, moving ahead dangerous wiring and allowing employees to accept highly volatile and flammable natural gas condensate, also known as drip gas, to help thin oil for processing.

In October 2012, Margiotta ignored further repeated warning from the plant's foreman that the natural gas condensate wasn't working and instead creating dangerous conditions that could lead to an explosion, prosecutors said.

On Dec. 29, 2012, the plant accepted a delivery of natural gas condensate. Vapors filled the building during offloading and ignited, injuring three workers and causing extensive damage to the plant and truck and trailer making the delivery.

Reports after the incident noted the fire continued to burn for five days, partially because firefigthers didn't know what its fuel was.

“We believe today’s conviction sends a strong message to those responsible for properly handling hazardous material,” said Jeffrey Dubsick, regional special agent in charge for the U.S. Department of Transportation Office of Inspector General, in a news release. “Working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to protect against those who would risk the safety of the public and the environment for personal gain.”