Oil Companies Pay $423 in MTBE Groundwater Lawsuit

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Oil Companies Pay $423 in MTBE Groundwater Lawsuit

By W.B. King

NEW YORK -- In an attempt to settle litigation over decades of groundwater contamination from the gasoline additive MTBE, nearly twelve oil companies have agreed to pay $423 million to assist clean-up in 17 effected states.

Among those named in the settlement is refiner Valero Energy Corp. The company's spokesman, Bill Day, told CSNews Online, "Valero has entered into a settlement agreement which resolves many of the lawsuits filed against Valero relating to the company's prior use of MTBE in gasoline. The settlement agreement is being reviewed by the court and is not yet final."

BP America Inc., Chevron Corp, ConocoPhillips, Shell Oil Co, Marathon Oil Corp., Venezuela's Citgo Petroleum Corp. and Sunoco Inc. also agreed with Valero in recognizing the damaging impact of MTBE, or methyl tertiary butyl ether, which in 1979 replaced lead in gasoline to make car engines more efficient.

"The one big holdout was Exxon Mobil Corp.," Robert Gordon, of Weitz and Luxenberg, one of the three lead lawyers for the plaintiffs, told Reuters, adding that the 2003 lawsuit by public water providers in 17 states was consolidated into a single federal case.

In 1990, Congress required refiners to use oxygenates like MTBE to clean up tailpipe emissions. While MTBE helps air quality, it hurts water quality. As a result, the additive leaked into water supplies in many states, giving rise to lawsuits. The U.S. Environmental Protection Agency categorizes MTBE as "a potential human carcinogen."

Groundwater with levels of MTBE is easily recognizable as the water takes on the taste and smell of turpentine. "There is going to be treatment of the wells and the affected areas guaranteed for the next 30 years," Gordon told Reteurs.

By the late 1990s, support weakened for MTBE when California and New York, which collectively accounted for 40 percent of its use, announced intentions to phase out the additive. By 2005, ethanol began to replace MTBE when approximately 4 billion gallons were added to the U.S. gasoline supply, reported Reuters.

"The MTBE decisions were made because there simply wasn't anything practical that could be used in the volume needed," John Felmy, chief economist with industry advocate American Petroleum Institute, told the news service.

This year federal mandates will require that the estimated 141 billion gallons of U.S. gasoline used should contain nine billion gallons of ethanol. That requirement will increase to 15 billion gallons by 2015 and to 36 billion gallons by 2022, reported Reuters.