Energy Bill Provision May Stop Suits Over Water Polluted by Gas Additive

Law suits against the producers and distributors of MTBE might no longer be possible under a wide-ranging energy bill that Congress is about to pass.

Buried in the massive bill is a paragraph that would give the makers and distributors of MTBE immunity from liability lawsuits. The provision protects makers from being held liable for defects "in design or manufacture of ... MTBE."

The energy bill addresses a long list of energy issues, from tax breaks for utilities to oil drilling in the Artic National Wildlife Refuge. The House and Senate have passed differing versions of the bill, and negotiators are working this week on a compromise version.

If the MTBE provision makes it into the final bill, Santa Monica water manager Craig Perkins says it could leave cities and local water districts without a way to force those responsible for MTBE to pay for cleanups at thousands of sites across the nation that have been contaminated by the additive.

The U.S. Conference of Mayors, which opposes the MTBE liability waiver, estimates that such cleanups could cost $29 billion. Attorneys general in 14 states oppose the provision, as have several water district associations and the National League of Cities.

"What this does is let the worst of the water polluters off the hook and shift the remediation to the taxpayers," says Steven Wolens, a Dallas lawyer who is representing several cities that are suing the oil industry over the issue. "This little tiny paragraph makes a big, big difference to water supplies."

The MTBE liability waiver is being pushed by leading Republicans such as Rep. Billy Tauzin of Louisiana. His office did not respond to a request for an interview. Tauzin has said the provision is narrowly written and would not affect litigation over spills or negligence.

But lawyers involved in MTBE litigation point out that the only successful MTBE suits brought by cities against the oil industry have been over the issue of the product's defectiveness, as opposed to negligence over how it was handled.

In a groundbreaking MTBE case in California last year, several gasoline companies and refineries were found by a jury to have put a defective product into the market place. The South Tahoe Public Utility District was awarded $50 million in damages by the jury, and the companies and refineries agreed to pay the costs of cleanup.

The health risks caused by MTBE are disputed by the oil industry. But it will be banned in California by the end of this year, and 17 other states are phasing out the use of MTBE.

The energy bill also would provide $200 million to $850 million that could be used to clean up MTBE-contaminated sites. But officials say that's not close to the $29 billion estimate for cleanups, which they say might be low.

"We don't know what (the cost) is," says Gus Morrison, mayor of Fremont, Calif. He says cities and states just want their day in court. "We ought to have the ability to file our claim and have to prove our case."

USA Today

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