Big Oil Fighting MTBE Lawsuits

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Big Oil Fighting MTBE Lawsuits

WASHINGTON -- Petroleum industry manufacturers of the gas additive MTBE have the support of powerful Republicans for a provision in a federal energy bill offering relief from potential liability over polluted water supplies. The liability exemption is part of the comprehensive energy bill before a congressional conference committee attempting to resolve differences between Senate and House of Representatives versions. The energy package may come to a vote by both bodies before the end of next week.

The provision would give makers of MTBE immunity from growing legal claims that the gasoline additive fouled water supplies across the country. Current cleanup costs have been estimated at $29 billion. Among the backers of the provision is House Majority Leader Tom Delay of Texas, where most MTBE is made, The San Francisco Chronicle.

In 1990, amendments to the federal Clean Air Act required the addition of oxygenates -- either MTBE or ethanol -- in gasoline as a way to reduce air pollution for regions with smoggy skies. But within years the ether product was leaking from underground storage tanks into groundwater.

In California, MTBE has been found in 97 drinking water sources, double the 48 detected as recently as two years ago. Gov. Gray Davis has banned its use starting in 2004, the report said. Last year, the South Tahoe (Calif.) Public Utility District used the legal argument that MTBE is a defective product in its successful lawsuit against five oil companies. But supporters of the liability exemption argue that MTBE manufacturers should not be held responsible for such claims because the government required the use of MTBE.

"These are products that are mandated by law. It's ridiculous that you can say that a product certified by the U.S. Environmental Protection Agency (EPA) for use in a clean-air program can become the basis of liability just because you manufacture it," said Scott Segal, a lawyer who represents MTBE manufacturers in Washington, D.C.

But opponents of the measure argue that the EPA offered a choice of MTBE or ethanol, and that MTBE manufacturers knew the risks. Internal documents unsealed in court cases show that the oil companies knew about possible groundwater problems as early as 1981 yet continued to promote the product.