- Exxon Corp. has agreed to pay the South Lake Tahoe utility
district $12 million to settle a lawsuit claiming that the additive MTBE
in the company's gasoline contaminated the district's drinking water.
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- The settlement is significant because it is the first
to be based on the claim that MTBE-blended gasoline made by a major oil
company is a defective product, said Vic Sher, the attorney who represents
the utility district.
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- Most MTBE contamination suits claim liability for leaking
underground storage tanks, he said. But this settlement was based solely
on the production and marketing of MTBE by Exxon, which does not own or
operate any gas stations in South Lake Tahoe but sold its gasoline to several
stations located there.
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- Exxon officials did not return phone calls asking for
comment.
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- The district, which voted on Thursday to approve the
settlement, has already collected $6 million from gas station operators
and Atlantic Richfield.
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- The district has shut down 12 of its 34 drinking-water
wells because of contamination from underground "plumes" of MTBE
seeping into the groundwater from a dozen gas stations.
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- Dennis Cocking, spokesman for the district, said that
it will cost tens of millions of dollars to clean up the wells or drill
new wells. Meanwhile, a water conservation program has been in effect throughout
the district.
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- A jury trial is scheduled for September in San Francisco
Superior Court on the district's claims against the remaining defendants:
Chevron, Shell and Tosco.
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- MTBE is added to gas in amounts up to 15 percent to produce
a cleaner burning fuel. But the additive is water soluble and highly mobile
in the soil, and it is extremely difficult to remove once it enters the
water supply.
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- Governor Gray Davis has called the chemical a "significant
risk" to the environment, and ordered a state ban of the additive
by the end of 2002.
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- E-mail William Carlsen at wcarlsen@sfchronicle.com
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