Legal Struggle: Let's Make a Deal

The village of Martha has had challenges in dealing with Ashland Oil to clean up the radioactive waste spread around the oil field.  These challenges have resulted in several lawsuits filed by residents against Ashland.  These lawsuits have been dragging through the courts for over a decade.  In a previous post, we discussed the Cantrell v. Ashland lawsuit and Ashland’s ridiculous legal position.  In this post we will discuss Rigsby v. Ashland and why we think it shows Ashland’s true intentions of saddling the property owners and the State of Kentucky with the cost of the cleanup of Ashland’s radioactive mess.

The plaintiffs in Rigsby v. Ashland sued Ashland in 1996 for trespass, nuisance and negligence claims related to the radioactive waste spread on their properties by Ashland’s oil production activities.  In 1997 the plaintiffs settled with Ashland; Ashland gave the plaintiffs an undisclosed sum of money and the promise to participate in the “Martha Reclamation Program.”  In return, the plaintiffs released Ashland of its liability.  The Martha Reclamation Program was the result of a 1995 agreement between the State of Kentucky and Ashland Oil in which Ashland agreed to remediate and restore property in the area including that owned by the plaintiffs.  So basically the plaintiffs agreed to waive Ashland’s liability for the radioactive pollution in exchange for money and an agreement by Ashland to clean up the mess.

All was well until 2007 when the plaintiffs hired an independent radiation officer to inspect their properties and hazardous levels of radioactive material were found, despite the properties obtaining a release from the State that they had been cleaned up by Ashland.  The plaintiffs sued Ashland seeking performance of the remediation and additional compensation.

The Kentucky Court of Appeals sided with Ashland.  The Court basically said that the plaintiffs signed an agreement to relieve Ashland of its liability, received money in return, and if they have issues with the quality of the radiation cleanup they should address the State of Kentucky, not Ashland.  So it appears in this case that Ashland gets to pass any additional costs incurred to appropriately clean up the properties to the landowners and/or the taxpayers of Kentucky.

Is it any wonder that other plaintiffs might be hesitant to settle their lawsuits with Ashland?

Ashland, do the right thing and clean up your mess!

Legal Struggle: Don't Cry Over Spilled Radium

The village of Martha has had challenges in dealing with Ashland Oil to clean up the radioactive waste spread around the oil field.  These challenges have resulted in several lawsuits filed by residents against Ashland Oil.  These lawsuits have been dragging through the courts for over a decade.  We will comment on one of these lawsuits, Cantrell v. Ashland, to demonstrate the ridiculous position that Ashland Oil has taken in dealing with the affected landowners.  The Kentucky Supreme Court has agreed to hear oral arguments concerning the case.

In Cantrell v. Ashland, the plaintiffs sued Ashland Oil for damages resulting from Ashland dumping radioactive waste on the plaintiffs’ properties during the process of separating oil from the pumping water.  The radioactive waste was the pumping water infused with radium-226, a water-soluble radioactive isotope with a half-life of 1600 years, that was naturally present in the oil-bearing formation.  This radioactive pumping water was brought to the surface, separated from the oil, then disposed of in sludge pits and local streams by Ashland, creating radioactive hot spots around the oil field.

The plaintiffs contend that they suffered a health hazard and a decrease in property value due to the radioactive contamination.  Ashland says that just because the property is contaminated with radiation does not mean a health hazard exists, since radiation “cannot be seen, heard, felt, smelled, tasted or otherwise detected by human senses.”  Ashland also takes the position that the property damages are “stigma” claims, that the plaintiffs should not be compensated for the “stigma” of having radioactive waste on their property.

Think about the position that Ashland has taken.  They admit to dumping radioactive waste on the properties… who else could have done it?  However, Ashland claims that the radioactive contamination is not a health hazard since you cannot see, hear, feel, smell, taste or otherwise detect it with human senses and that Ashland is not going to compensate the plaintiffs for the “stigma” of having radioactive hot spots on their properties.  This is outrageous.

We believe Ashland is trying to use legal maneuvering and technicalities to avoid owning up to the responsibility of cleaning up the mess they made.  We also believe Ashland would like to stick the landowners and the taxpayers of Kentucky with the cleanup bill, and they are hoping to use the court system of Kentucky to do it.  We will show you why we believe this in the next post.

Shame!  Clean up your mess, Ashland Oil!

"Will the real Ashland Oil please stand up?"

There used to be a TV show called To Tell the Truth where three contestants appeared before a panel of judges, all pretending to be the same person.  In the end, the moderator would ask the contestants, "Will the real _____ please stand up?" to reveal the person's true identity.  We can play a similar game with Ashland Oil:

1997 - Ashland signed definitive agreement with Marathon Oil to combine the two companies' refining, marketing and transportation assets. Ashland sold its domestic oil and gas properties for $566 million, and the company's two coal investments merged to form Arch Coal, Inc.



1998 - Marathon Ashland Petroleum LLC began operation Jan. 1. Ashland owned 38 percent of this joint-venture company, the nation's sixth largest refiner. 


1999 - Ashland's headquarters moved to Covington, Ky., as the company observed its 75th anniversary. Ashland formed two new divisions - Ashland Distribution Company and Ashland Specialty Chemical Company - from its largest wholly owned business, Ashland Chemical Company. 


2004 - Ashland and Marathon Oil Corporation signed an agreement to transfer its 38-percent interest in Marathon Ashland Petroleum LLC (MAP) to Marathon for approximately $3.0 billion. 


2005 - Ashland Inc. (NYSE: ASH ) and Marathon Oil Corporation (NYSE: MRO ) on June 30 completed an agreement under which Ashland transferred its 38-percent interest in Marathon Ashland Petroleum LLC ( MAP ) and two other businesses to Marathon. The two other businesses were Ashland's maleic anhydride business and 60 Valvoline Instant Oil Change (VIOC) centers in Michigan and northwest Ohio, which were valued at $94 million. After 81 years in the petroleum refining and marketing industry, Ashland Inc. became a two-sector company with operations in the chemicals and transportation construction industries. 


So, is Ashland or Marathon responsible for the radioactive mess in the Martha Oil Field?  I'm sure the lawyers know who is legally responsible, however, if a good corporate citizen decided to clean up the mess tomorrow, who would it be?  Ashland, Marathon or someone else?  Will the real Ashland Oil please stand up?

The Radioactive Pollution

Naturally occurring radioactive material, or "NORM," is a term used to describe radioactive material that occurs naturally but is radioactively enhanced or concentrated through human activity. Radioactivity associated with NORM in waste generated by the exploration and production of gas and oil is produced by the decay of uranium and thorium. Radium-226, a decay product of uranium which occurs in the Devonian shale that is a source rock for much of the oil found in Kentucky, is the decay product of most concern, because unlike the highly insoluble uranium, the radium (Ra226) is water and brine-soluble and is brought to the land surface and often concentrated as a by-product of the production of oil. The process of development of the oil resources, including the waterflooding of producing formations, and surface activities to separate oil from wastewaters, has resulted in the surface disposal of concentrated levels of radium-226 in disposal pits, and the concentration of radium-226 on land areas associated with tank batteries used for separation of oil and produce (brine) water, at concentrations which exceed levels at which the Environmental Protection Agency has recommended that action should be taken to require removal and proper management of the radioactive materials and contaminated soil.

The principal contaminant of concern in the radiation problems associated with oil production activities appears to be radium-226, which was noted by the Louisiana Department of Environmental Quality to have "a number of physical and chemical features that make it a particularly potent hazard to human health:"

* It emits both alpha and gamma radiation
* It behaves much like calcium and is incorporated into the bones in the human body
* It is a known carcinogen
* It has a half-life of 1,620 years
* It undergoes radioactive decay to produce radon - another hazardous substance.
* Radium-226 can enter both aquatic and terrestrial food chains leading to human consumption.

The current level of information regarding the extent of the problem of oilfield radioactive wastes in the state is virtually nonexistent, and it is not known beyond the Martha oil field, whether a problem exists with oilfield waste radioactivity. Data developed on the Martha oil field through field surveys conducted by the Cabinet for Human Resources and the Natural Resources and Environmental Protection Cabinet, as well as a consultant for an oil company in the area, indicates the existence of numerous sites where levels of radium-226 has been detected at excessive levels. These areas include apparently dozens of brine/sludge pits in the Martha oil field that were formerly used for separation of oil and produced water (brine), and for disposal of oil-related sludges and clays as well as other land areas which currently or formerly supported tank batteries (oil/water separators) or piping and equipment storage, many of which exhibit levels of radium-226 as much as hundreds of times above the levels deemed unacceptable due to health consequences by the United States Environmental Protection Agency for human exposure.

History of the Martha Oil Field

We know a little bit about the history of the area and would like to share it with you.  The village of Martha was named after Martha Skaggs, nee Cothron, a Cherokee who married Peter Skaggs in Virginia in 1788.  They moved to the “head of Blaine” in Lawrence County, Kentucky in 1804.  Martha Skaggs died in 1865 in Martha.

The Martha Oil Field was discovered in 1919 and produced roughly 19 million barrels of oil prior to 1955 when a waterflood project was begun by Ashland Oil to extract more oil.  Over 6 million barrels of oil was recovered using water injection between 1955 and 1970.  At this point, Ashland estimated an additional 30 million barrels of oil remained to be recovered by injection of brine and inert gas.  They considered the Martha Oil Field to be an opportunity to test the field-wide application of these enhanced oil recovery techniques.

Unfortunately the oil in the Martha Oil Field lies in Devonian shale, which contains low-level concentrations of radium-226, a radioactive element (naturally occurring radioactive material, N.O.R.M.) with a half-life of 1600 years.  Radium-226 is highly water soluble.  The water, brine and inert gas injections into the Devonian shale concentrated the radium-226 and brought it to the surface where the oil was separated from the brine.  The radioactive brine was dumped into sludge pits and disposed of in Blaine Creek.  As a result, oil wells, pressure wells, tank batteries, sludge pits and disposal pathways were contaminated with concentrated radioactive material.  Also, pipes and tanks that were in prolonged contact with the radioactive material were contaminated and strewn about the oil field.

The radiation contamination was discovered in 1988 when pipes hauled from Ashland Inc. tripped a scrap yard’s radiation detectors.  Ashland contended the radiation was harmless and began removing old pipes and tons of contaminated soil from the area to a designated disposal site.  Area residents claimed their health and property were at risk and filed lawsuits against Ashland Oil.

Ashland Oil Exploration merged with Marathon Oil in 1998 to form Marathon Ashland Petroleum, LLC.  In 2005 Ashland sold its share in Marathon Ashland Petroleum to Marathon Oil to exit the petroleum business.

We can’t imagine that Marathon Oil took on Ashland’s liabilities without proper due diligence, therefore Marathon should move to settle with the local residents and clean up this mess.  Do the right thing, Marathon!