A massive mud flow that has buried villages, a highway and other structures near the city of Sidoarjo in East Java, Indonesia, (aka Lusi, for Lumpur Sidoarjo) spewed oil for more than a week in late March, according to geologists there. The threat of oil in the mix added to the health and environmental risks from the mud eruption that was most likely caused by oil drilling gone awry. The mud volcano has displaced 30,000 people and caused roughly $1 billion in damage since erupting on May 29, 2006, according to  geologists at the Durham University in England.

About two years ago, Indonesian oil company Lapindo Brantas drilled a well into pressurized rocks in an East Java oil field. But something went wrong when the well breached rocks somewhere around 9,000 feet (3,000 meters) underground, depressurizing the fluid in the rocks below.

Since the rupture, more than 90 million cubic meters (3.2 billion cubic feet) of 175-degree Fahrenheit (80-degree Celsius) clay and water have percolated to the surface. The resulting lake, dammed by levees made of clay-filled bags, covers more than 2.3 square miles (6 square kilometers), and the weight of the mud and compression of the rocks below has caused tens of meters of subsidence at the heart of the mud volcano.

Making matters worse, oil started flowing with the mud on March 20, according to Van Williams, a former U.S. Geological Survey (USGS) geologist now stationed in Indonesia as an advisor with the U.S. Agency for International Development (USAID). But Williams says the oil appeared to stop seeping yesterday. Indonesian government researchers are scrambling to get a handle on how much oil escaped and to determine its source by comparing it with chemical profiles of different petroleum reservoirs in the region.

Its origins could reveal secrets about the "complicated plumbing" beneath the eruption—as well as whether oil might stream again, Williams says. He adds, however, that it may turn out to have been an isolated incident or to have stemmed from an unrelated motor oil spill.

After the mud flow first began in 2006, USGS researchers led by geochemist Geoff Plumlee examined it for contaminants that could be harmful to humans and/or the environment. They found trace levels of arsenic and selenium among other harmful metals, along with polycyclic aromatic hydrocarbons (PAHs) and other troublesome compounds as well as trace amounts of petroleum products—levels low enough to limit concern about potential health effects. But Plumlee says that "oil in the mud flow ... raises the level of concern," especially if there are large amounts.

He notes that children who reportedly play in the mud lake could be exposed to harmful chemicals as can adults during salvaging operations of submerged buildings. But there's also the risk of livestock drinking contaminated water or—even more worrisome—oil carried by the nearby Porong River to the Java Sea could contaminate aquaculture operations there.

Whether or not oil is part of the mix, Thomas Casadevall, a USGS geologist who has studied the mud volcano, says the mud is expected to flow for decades. The challenge will be, he says, restoring commercial activity to the area; because of its proximity to Sidoarjo and its importance to the port, "virtually everything has to come through that corridor."