Oilfield Pollution: Can There Be Settlement Without Remediation

Abstract In 1964, an oil well blew out. Over the years, oil continued to seep from the location. Suit was filed in 1985 for $31 Million for loss of value of the land, costs of remediation and costs to plug the well properly. An action was also filed in the state conservation commission by the operator. In 1987, the trial court held that the operator owed $4.512 Million in damages including $2.1 Million for proper plugging of the well and another $2.1 Million for remediation costs. Also in 1987, the state conservation commission ruled that the well was properly plugged and abandoned and ordered the operator to complete an approved remediation plan. The case was appealed and was eventually settled after rulings by the state Court of Appeals and Supreme Court. This paper discusses: (1) case study of the above facts and circumstances and the resulting inconsistencies between the administrative agency rulings and the civil court's rulings and how they affect remediation as well as settlement of claims; (2) another case study where a court ruled that regard-less of a settlement that included the payment of remediation costs to the surface owner, the operator was primarily liable for clean-up costs to the administrative agency and the operator's bond was forfeited to cover the costs of clean-up; (3) the most recent state Supreme Court ruling to affect this issue; (4) the legal ramifications of settlement without remediation of an oil field pollution site.