In a civil case, the Department of Justice (DOJ) and Environmental Protection Agency accused the Texas company of flouting environmental laws at dozens of sites in the Fort Berthold Indian Reservation.
The company will pay a civil penalty of $64.5 million and spend an additional $177 million to upgrade operations to address pollution through flare monitoring, infrared camera inspections and storage tank redesign, the DOJ said.
The agency added that the civil penalty was the largest ever for violations of the Clean Air Act at stationary sources.
Marathon, which announced in May a $22.5 billion deal in which it would be acquired by ConocoPhillips, already budgeted for more than 70 percent of the operational upgrades, the company said in a securities filing.
It added that the remaining would be spent by the end of 2025.
US officials alleged that the oil company failed to meet design, operation and maintenance requirements at some 66 oil and gas production facilities, leading to unlawful emissions, according to a DOJ complaint filed in a US court in North Dakota.
Marathon also failed to obtain pre-construction or operating permits at some 38 facilities. To avoid permitting requirements, the company submitted "artificially low" emission estimates, based on "erroneous and unreasonable assumptions," the complaint said.
This settlement "will ensure cleaner air for the Fort Berthold Indian Reservation and other communities in North Dakota, while holding Marathon accountable for its illegal pollution," said Attorney General Merrick Garland in a statement.
Marathon, which said the alleged violations took place between 2015 and 2019, did not admit fault.
"Marathon does not admit liability regarding any of the allegations in the complaint associated with the consent decree and elected to resolve the allegations in a negotiated settlement rather than litigation," the company said in the securities filing.
DOJ said the agreement will result in deep cuts in emissions of methane, a major contributor to climate change.
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