- Congress is considering legislation to strictly limit
oil company liability for contaminating groundwater in at least 35 states
with the toxic gasoline additive MTBE.
- The industry's friends in Congress say it's only fair
to shield MTBE makers from lawsuits, since, they claim, it was the government
that mandated oil companies to reformulate gas with MTBE in the first place,
to clean the air. But a different story has emerged from internal industry
documents and depositions, made public in recent successful lawsuits brought
by Oakland-based Communities For a Better Environment and the city of South
lake Tahoe, CA, that have forced oil companies to pay to clean up water
made undrinkable and unhealthy by MTBE.
- The documents, provided to Environmental Working Group
by CBE's lawyers, show that the oil industry itself lobbied hard for the
MTBE mandate because they made the additive and stood to profit. A top
ARCO executive admitted under oath, "The EPA did not initiate reformulated
gasoline...." He clarified that "the oil industry... brought
this [MTBE] forward as an alternative to what the EPA had initially proposed."
- By 1986, the oil industry was adding 54,000 barrels of
MTBE to gasoline each day. By 1991, one year before the EPA requirements
went into effect, the industry was using more than 100,000 barrels of MTBE
per day in reformulated gasoline. Yet secret oil company studies, conducted
at least as early as 1980, showed the industry knew that MTBE contaminated
ground water virtually everywhere it was used.
- Oil companies are pressing Congress for liability protection
because hundreds of communities have serious MTBE contamination problems,
and > company documents are coming back to haunt them in the courtroom.
In April, the documents convinced a California jury to find Shell, Texaco,
Tosco, Lyondell Chemical (ARCO Chemical), and Equilon Enterprises liable
for selling a defective product (gasoline with MTBE) while failing to warn
of its pollution hazard, forcing a $60 million settlement with the water
district for South Lake Tahoe.
- "The Government Made Us Do It"
- MTBE, or methyl tertiary butyl ether, is an "oxygenate"
that makes gasoline burn cleaner and more efficiently. Unfortunately, it
is also a foul-tasting, nasty-smelling, probable carcinogen that spreads
rapidly when gasoline escapes from leaky underground storage tanks, contaminating
sources of groundwater and drinking water from New York to California.
Once in soil or water, MTBE breaks down very slowly while it accelerates
the spread of other contaminants in gasoline, such as benzene, a known
carcinogen. Some communities, including Santa Monica and South Lake Tahoe,
Calif., face tens or hundreds of millions of dollars in costs of cleaning
up MTBE or replacing contaminated water supplies. At least 16 states already
have passed measures to ban or significantly limit the use of MTBE in gasoline,
and a federal ban is more a question of when than if.
- In House-Senate negotiations to craft a compromise federal
energy bill, pressure is building to follow the lead of many states and
ban MTBE nationally by the year 2006. Members of Congress from corn-producing
states support the phase out in part because ethanol made from corn is
the primary MTBE substitute. Oil-state politicians, in turn, are demanding
that any ban on MTBE shield its makers from product-defect liability. The
proposal would not preclude suits against parties responsible for allowing
MTBE to leak from storage tanks, but would provide immunity from suits
claiming that MTBE itself was a defective product -- precisely the charge
that won a $60 million settlement for the South Lake Tahoe Water District
this year. The jury in that case found five oil and chemical companies
liable for selling a defective product -- MTBE --while failing to warn
of > its pollution risks.
- On Sept. 27, 2002, the Associated Press reported that
the House proposal for liability relief has a good chance of being accepted
by Senate negotiators: "Democrats and Republicans alike view it as
a small price to pay in return for getting the politically popular ethanol
provision into an energy bill only weeks before the upcoming elections."
Rep. Billy Tauzin, R-LA, who is chairing the energy bill negotiations,
said it's only fair that MTBE makers are shielded "when the government
is responsible" for oil companies adopting the additive to meet federal
air quality requirements. "We mandated MTBE to help the environment,"
Tauzin said. And lawyer who defends MTBE manufacturers told the AP, "You
can't be held liable for just complying with the law."
- The congressman and the lawyer aren't the only ones spreading
the tale that oil companies were just following orders. Most news outlets
have told the MTBE story as a lesson in the unintended consequences of
efforts to reduce air pollution.
- In 1997, the Los Angeles Times let stand without challenge
the statement of a West Coast refiner: "[T]he issue of potential contamination
of the state's water was not adequately considered prior to implementation
of the federal and state reformulated gasoline regulations... Consequently,
we find ourselves in a Catch-22, since the current regulatory framework
effectively leaves us no choice but to use MTBE to meet clean fuel standards."
This spin has traveled the high and low roads, reaching the editorial pages
of The New York Times, Los Angeles Times, Dallas Morning News, St. Louis
Post-Dispatch, Newsday and Denver Post, and providing California talk-show
hosts with fuel for a belligerent populist campaign against overzealous
- The MTBE Papers
- The paper trail, dating at least to 1980, tells a different
story: > How the oil companies took an unwanted byproduct of gasoline
refining that was expensive to dispose of and created a profitable market
for what they, until then, had been required to handle as toxic waste.
Beginning in the mid-1980s, well in advance of the 1992 federal mandate
to reformulate gasoline to meet the standards of the Clean Air Act, the
petrochemical industry promoted MTBE to U.S. and state regulators as the
additive of choice -- only much later admitting it doesn't do much to reduce
air pollution after all.
- Thousands of pages of internal documents and sworn depositions
from the producers at Shell, Exxon, Mobil, ARCO, Chevron, Unocal, Texaco
and Tosco (now Valero) have come to light through a lawsuit by Communities
for a Better Environment. Many of the same documents were used in a suit
by the South Lake Tahoe Water District against four oil companies and Lyondell
Chemical Co. of Houston (ARCO Chemical Company), the nation's largest MTBE
producer. In the CBE suit, several of the companies settled last year by
agreeing to clean up MTBE spills at more than 1,300 California gas stations;
the others continue to contest the case.
- Earlier this year, a jury in the Tahoe case found Lyondell,
Shell, Texaco, Equilon, and Tosco guilty of irresponsibly manufacturing
and distributing a product they knew would contaminate water. In addition,
the jury found by "clear and convincing evidence" that both Shell
Oil Company and Lyondell Chemical Company acted with "malice"
by failing to warn customers of the almost certain environmental dangers
of MTBE water contamination.
- In an interview with The Sacramento Bee, the jury foreman
said he found the MTBE papers, which demonstrated the industry's early
knowledge that MTBE would threaten water supplies "among the most
compelling evidence he recorded in 635 pages of handwritten notes."
The foreman stated that "[t]here were lessons to be learned, but (Shell)
didn't (learn them) because it saw money to be made in selling the product."
After the jury verdict establishing liability, but before the jury could
assess monetary damages, the companies > settled the case for $60 million.
- Oil Companies Knew MTBE Was a Threat to Water Supplies
- Even though MTBE was not classified as a probable cause
of cancer in humans until 1995, refiners knew much earlier that its powerfully
foul taste and smell meant that small concentrations could render water
undrinkable, and that once it got into water supplies it was all but impossible
to clean up. A Shell hydrogeologist testified in the South Lake Tahoe case
that he first dealt with an MTBE spill in 1980 in Rockaway, N.J., where
seven MTBE plumes were leaking from underground storage tanks. By 1981,
when the Shell scientist wrote an internal report on the Rockaway plumes,
the joke inside Shell was that MTBE really stood for "Most Things
Biodegrade Easier." Later, other versions of the joke circulated,
including "Menace Threatening Our Bountiful Environment," or
apropos to the present attempt to limit liability, "Major Threat to
- In 1983, Shell was one of at least nine companies surveyed
by a task force of the American Petroleum Institute on "the environmental
fate and health effects" of MTBE and other oxygenates. Shell's Environmental
Affairs department replied to the trade association: "In our spill
situation the MTBE was detectable (by drinking) in 7 to 15 parts per billion
so even if it were not a factor to health, it still had to be removed to
below the detectable amount in order to use the water." (emphasis
added). The survey, the results of which were later distributed to all
API members, asked for information about the number and extent of spills,
chemical analysis of the spill and the contaminated water, and health effects
to people in the community.
- Clearly, Shell was not the only company that knew about
MTBE problems. An environmental engineer for ExxonMobil (the companies
merged in 1999), testified that he learned of MTBE contamination from >
Exxon gasoline in 1980, when a tank leak in Jacksonville, Maryland, fouled
wells for a planned subdivision. The ExxonMobil engineer said it was learned
MTBE had also leaked into the subdivision's wells from a Gulf and an Amoco
- Storage Tanks Were Known to be Leaking in the 1970s and
- Refiners also knew that underground gasoline storage
tanks were susceptible to leaks, a fact that would amplify the problem
with MTBE. In 1973, an Exxon report on the problem said: "The subject
of underground leaks at service stations is one of growing concern to gasoline
marketers. Large sums of money, time, and effort are exhausted on a continuing
basis in the location and detection of leaking tanks and lines."
- In 1981, an ARCO memo said leaking tanks were "a
major problem.... The issue is essentially a health/safety and environmental
one. Escaping vapors can seep into basements, sewers and conduits, creating
not only a nuisance but the danger of explosion and/or fire. Escaping gasoline
also enters and pollutes the water table. (Groundwater is a major source
of the U.S. water supply.) Certain chemicals in gasoline (namely the aromatics
like benzene) may be carcinogenic or toxic in certain quantities."
- By 1980, Exxon had an annual testing program for tanks
and found that 27 percent were leaking; two years later the failure rate
was up to 38 percent. In 1981, Shell and ARCO, the first refiners to add
MTBE, estimated that 20 percent of all U.S. underground storage tanks were
leaking. Five years later, in 1986, the EPA concurred. Prior knowledge
of the extent of leaking gasoline storage tanks was a major part of South
Lake Tahoe's case: Fully aware that tanks were leaking, the petrochemical
industry nonetheless introduced an additive known to rapidly percolate
down to groundwater from gasoline distribution systems with known leaks.
Efforts were ongoing to upgrade storage tank systems, but when industry
learned quickly that the new tanks were still leaking, it continued to
expand the use of MTBE anyway.
- The Industry, Not the EPA, Promoted MTBE as an Oxygenate
> Recently disclosed court documents clearly show that the oil companies,
not state or federal regulators, were the boosters of MTBE. The industry
developed and promoted the concept of using reformulated gasoline to reduce
air emissions, assuring the EPA that reformulated gasoline would be better
than other options being considered. ARCO Chemical Co.'s Manager of Business
Development from 1987 to 1998 testified: "What I recall is the EPA
actually promoting using methanol blends... and the refining industry said
here's another option... we can reformulate gasoline to reduce the emissions...
that would be equal to or better than you would get by substituting or
mandating the use of methanol vehicles... [T]he oil industry... brought
this forward as an alternative to what the EPA had initially proposed."
He continued, "The EPA did not initiate reformulated gasoline."
- Well before the EPA mandated reformulated gasoline in
1992, the oil industry was aggressively promoting MTBE. According to the
American Petroleum Institute, refiners were adding an average of 74,000
barrels of MTBE to gasoline per day from 1986 through 1991, roughly one
third of the peak amount added to gasoline in 1998.
- In 1987, a representative of ARCO Chemical (later absorbed
by Lyondell), which was rapidly expanding its MTBE production, testified
before the Colorado Air Quality Control Commission that the additive would
reduce emissions and improve gas mileage, that supply and price were no
barrier, and that consumers didn't need to be warned about the presence
of MTBE in gasoline. Nothing was said about the leak and contamination
problems that ARCO and the rest of the industry had known about for at
least seven years. ARCO's representative testified that in the 1980s he
played a similar role in "assisting" the states of Arizona and
Nevada in the development of oxygenate programs -- > programs that resulted
in those states adopting MTBE.
- The Industry Attacked Safety Studies and Withheld Information
- In 1986, the Maine Department of Environmental Protection
published a report documenting extensive MTBE groundwater contamination
in the state. The authors identified MTBE as a "rapidly spreading
groundwater contaminant" and discussed the option that "MTBE
could be abandoned as an additive in gasoline stored underground"
or that gas with MTBE "be stored only in double-contained facilities."
The Maine Paper was perhaps the earliest warning from government health
officials about the dangers of MTBE. To the oil companies, it was a call
to arms. Documents show that even as they were internally disseminating
this study and treating its findings seriously, the oil companies joined
forces to attack the study's authors and the article's "damage"
in an effort to discredit their findings and downplay the risks of MTBE.
- The industry disinformation effort began even before
publication of the paper. A 1987 ARCO memo details the continued attack
on the authors and their research:
- "We initially became involved with the Maine DEP
prior to the presentation of their first version of this paper at the National
Well Water Conference on November 13, 1986... Since the paper was presented
last November, we have been working with API, the newly formed MTBE Committee
[of the Oxygenated Fuels Association], and on our view to assess the potential
impact of this paper on state policymakers [and] to contain the potential
'damage' from this paper...."
- The memo goes on to explain how the Maine Petroleum Council,
the state affiliate of the API, was preparing a paper claiming that MTBE
didn't speed up the spread of benzene in water, that MTBE "only spreads
slightly further" than benzene and other contaminants, and that MTBE
could be easily removed from water with existing technology -- none of
which is true. Internally, however, the industry admitted the Maine paper
was a scientifically credible threat. A 1987 letter from an ARCO refining
executive to his Unocal counterpart admits the > MTBE task force didn't
"have any data to refute comments made in the paper that MTBE may
spread further in a plume or may be more difficult to remove/clean up than
other gasoline constituents."
- In 1987, at the same time that ARCO and API were leading
the attack on the Maine Paper, the U.S. EPA issued a request to the industry
for "more information on the presence and persistence of MTBE in groundwater."
As reported last year by the San Francisco Chronicle and The Sacramento
Bee, ARCO responded: "Where gasoline containing MTBE is stored at
refineries, terminals or service stations, there is little information
on MTBE in groundwater. We feel that there are no unique handling problems
when gasoline containing MTBE is compared to hydrocarbon-only gasoline."
- Internal Memos Warning Against MTBE Were Ignored
- There were voices within the industry that warned against
the use of MTBE, on grounds both of public health and cleanup costs from
the inevitable leaks. A document dated April 3, 1984 from an Exxon employee
- "[W]e have ethical and environmental concerns that
are not too well defined at this point; e.g., (1) possible leakage of [storage]
tanks into underground water systems of a gasoline component that is soluble
in water to a much greater extent [than other chemicals], (2) potential
necessity of treating water bottoms as a 'hazardous waste,' [and] (3) delivery
of a fuel to our customers that potentially provides poorer fuel economy....
" (Emphasis added.)
- That same year, an Exxon engineer wrote the first in
a series of memos outlining "reasons MTBE could add to ground water
incident costs and adverse public exposure:"
- "Based on higher mobility and taste/odor characteristics
of MTBE, Exxon's experiences with contaminations in Maryland and our knowledge
of Shell's experience with MTBE contamination incidents, the number >
of well contamination incidents is estimated to increase three times following
the widespread introduction of MTBE into Exxon gasoline...." Later,
the document notes: "Any increase in potential groundwater contamination
will also increase risk exposure to major incidents."
- An Exxon memo from 1985 discusses MTBE's "much higher
aqueous solubility" than benzene and other gasoline components:
- "This can be a factor in instances where underground
storage tanks develop a leak which ultimately may find its way to the underground
aquifer. When these compounds dissolve in ground water and migrate through
the soil matrix they separate into distinct plumes. MTBE creates the most
mobile of the common gasoline plumes. MTBE is not a known carcinogen like
Benzene, however we can be required by public health agencies to remove
it based on its taste and odor characteristics."
- Despite all the evidence pointing to its shameful neglect
of public interest, the oil industry is poised to be free of any responsibility
for environmental destruction.
- Bill Walker is vice-president of the Environmental Working
Group. For more information and to take action, visit the Environmental
Working Group and Communities for a Better Environment. '
- Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html
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