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$1.2 million payout reached for 2008 oil well explosion

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By The Staff

A $1.2 million clean-up cost and civil penalties settlement has been reached between the owners and operators of an Oliver Springs oil well that exploded in March 2008 and the U.S. Department of Justice.

The oil well explosion burned for days, spraying oil on nearby properties and forcing residents in the area to relocate until the fire was out.

Daniel F. Potts and Walden Resources, LLC of Petros and ZTX Drilling LLC of Florida have entered into the settlement, said a press release from the office of U.S. Attorney William C. Killian.

Potts and Walden entered into an agreed judgment to pay $270,000 for clean-up costs and penalties under the U.S. Environmental Protection Agency’s Clean Water Act, according to the release.

A separate settlement with ZTX and its liability insurance company, Bituminous Casualty Corp., resulted in a $1 million payment.

Federal agencies filed suit in U.S. District Court for the Eastern District of Tennessee at Knoxville to recover the EPA’s clean-up costs arising from the explosion and resulting discharge of oil and natural gas.

Potts was primary owner and operator of Walden Resources, which held the lease for the well.

ZTX Drilling was conducting drilling operations at the site under a contract with Walden Resources when the well’s blow-out preventer failed on March 18, 2008.

“The well caught fire, resulting in a large explosion, and approximately 2,000 barrels of crude oil flowed into a secondary retention pond and into nearby Indian Creek and Wright’s Creek, a navigable waterway,” the release said.

“The EPA alleged several vacuum trucks operated by contractors of Walden Resources were observed extracting the oil-water solution from the containment pond and exiting the site, with at least one truck observed dumping its load onto the ground away from the site,” the release continued.

“Upon learning of the improper cleanup by the contractors, EPA than took over clean-up of the site.”