MTBE contamination lands $423 million settlement

More than 500 lawsuits have been settled at a cost of $423 million by Chevron, BP (British Petroleum) & other oil companies by users and water suppliers in California and 19 other states due to MTBE (Methyl tertiary butyl ether) contamination in groundwater.

The settlement was filed 5-07-08 in New York and will be reviewed by U.S. District Judge Shira Scheindlin. Locally, 11 plaintiffs in the city of Riverside, sections of Sacramento, and San Diego counties are to receive reimbursement for future treatment of over 1000 wells plus a lump sum of more than $78 million dollars, based on accusations that oil companies were responsible for the contamination of the MTBE gasoline additive in groundwater.

MTBE has been used in the U.S. as a fuel additive to boost octane in gasoline while reducing air pollution, but its use has declined in recent years due to its ability to pollute large quantities of groundwater when gasoline with MTBE is spilled or leaked from gas stations. It is also flammable, making water undrinkable with a resulting foul smell and taste. The Environmental Protection Agency has deemed MTBE highly carcinogenic in large doses, and California law limits the additive to 13 parts per billion in water.

Legal representation for 20 of the suing water districts have accused the oil companies of using MTBE with knowledge that it was a water contaminant, and that contamination of the water supply could have been avoided if safety rather than cost had been the primary focus to keep the fuel additive from leaking out of gas station facilities.

Attorneys serving as liaison for the oil companies have refuted the accusations, stating that MTBE is not a contaminant, and representatives of the oil companies argue that the Federal Clean Air Act required them to use MTBE because alternatives were insufficient in supply.

Other large settlements paid by MTBE producers in the past have been awarded to Santa Monica for $120 million and South Lake Tahoe for $69 million. After those settlements, oil companies attempted to obtain blanket protection from litigation stemming from MTBE contamination with an amendment attached to an energy bill proposed in congress, but this addition was later removed from the legislation.