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State sues Childers Oil over fuel leak

State regulators have taken a tough tack against Childers Oil Co., which is accused of fouling Whitesburg's water supply with leaking diesel fuel.

They are seeking a court order that could bring a contempt of court charge against the company if it has further leaks such as the one that recently resulted in residents being unable to use water for cooking, drinking and bathing for 10 days.

The request came as part of a lawsuit the state Energy and Environment Cabinet filed Tuesday against Childers Oil and a sister corporation, Mountain Rail Properties Inc., both owned by Don Childers, of Whitesburg.

The cabinet asked Franklin Circuit Judge Phillip J. Shepherd to issue an injunction barring the companies from allowing more leaks of petroleum products.

"It is the personal right of the citizens of Letcher County to live in a safe environment and to have clean drinking water," state attorneys said of the request.

The law already prohibits companies from letting contaminants spill into streams.

However, the requested injunction would add the muscle of a potential contempt of court charge if Childers Oil again contaminates waterways, as it allegedly has twice in the last four months.

The state also asked that Shepherd order the companies not to place any more petroleum-storage tanks at the site of the most recent leak; that they put a spill-control plan and best-management practices in place; and that they disclose whether they disposed of petroleum byproducts or waste at any other sites for which they did not have permits for such substances.

Childers Oil and Mountain Rail agreed Tuesday to meet the requests, said John S. West, an attorney for the cabinet.

The agreement should be filed in court Wednesday, he said.

'Illegal discharges'

The state argued that the injunction was needed to prevent the companies from "continuing to conduct their operations in such a manner as to result in illegal discharges or releases of petroleum products/wastes" into the ground or water.

"We've done everything they have asked us to do and more, so an agreed upon order between us certainly makes sense," said Missy Matthews, owner/operator of Childers Oil. "There is no reason for litigation or a hearing."

The state has cited Childers Oil twice in the last four months for allegedly contaminating the North Fork the Kentucky River. That is the raw-water supply for Whitesburg, whose treatment plant also serves parts of Letcher County.

In November, oil waste seeped from a company site into the river a mile upstream from the city water plant, regulators said.

In February, diesel fuel spilled into the river from a site where the company had stored dozens of large fuel-storage tanks 4 miles upstream from the city, according to a citation.

Both times, the state advised thousands of residents not to use water from the city system for drinking, cooking or bathing.

The advisory lasted for 10 days in February; people got by using gallon jugs of bottled water provided through the city and county.

In addition to a criminal investigation of the November spill, Childers Oil faces fines of up to $25,000 a day per violation from the two leaks.

The state said in a news release it would seek the maximum fine, but that hasn't yet been calculated.