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Oil companies settle MTBE lawsuit

Thursday, May 8, 2008

Oil companies settle MTBE lawsuitIn the 1990's, when the Clean Air Act mandated that gasoline burn more cleanly, the oil industry's answer was methyl tertiary butyl ether (MTBE). It quickly became clear that the chemical contaminated groundwater -- even just a little bit makes water undrinkable. Of course, the fact that you can taste it may be a blessing in disguise if it keeps you from drinking it. MTBE has been shown to cause cancer in lab studies.

Anyway, flash forward to the present day: many of the world's major oil companies have settled a lawsuit brought by 153 public water utilities. In settling, companies like BP, Citgo and Sunoco agreed to pay $423 million in damages. They also agreed to cough up 70 percent of future cleanup costs those water utilities incur because of MTBE contamination.

MTBE was phased out entirely (and voluntarily) in 2005, but not before 23 states had the chance to ban the failed chemical. It has been replaced as a fuel additive by ethanol. Six major companies, including Exxon-Mobil, refused the settlement.

Deals like this always make me uncomfortable. After all, if the oil companies were willing to shell out $423 million without being told to by a judge, how much more did they expect to lose if they went to court?

In March of 2007, EWG created a state-by-state breakdown of MTBE contamination reports. Photo by Olivier Jules.