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Exxon Is Holdout on MTBE | Oil Watchdog

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Exxon Is Holdout on MTBE


Thu, May 8, 2008 at 10:41 am

    Exxon Is Holdout on MTBE

    5-8-08 by dugan

    A national lawsuit over water pollution from a gasoline additive was more than half-settled yesterday when four of the five major oil comanies agreed to pay $423 million in cleanup and other costs. Chevron, Shell, BP, Conoco and several smaller companies did what’s right, and will escape years more of litigation costs. Exxon, which can no doubt afford to litigate until the world ends, was the only major holdout.

    The suits, being heard in a New York court, involved the gasoline additive MTBE, or methyl tertiary butyl ether, which was mixed with gasoline for cleaner burning in the 1980s and 1990s. The chemical leaked from underground tanks and ultimately polluted groundwater supplies in many states, endangering drinking water. 

    Exxon’s response to the settlement was that it was just doing what government wanted, and has no liability. I haven’t seen any news reports on the settlement that challenge this "government made me do it" statement. However, oil companies chose to use MTBE, rather than other clean-air oxygenates like methanol or ethanol, in part because their own chemical divisions manufactured MTBE. And even before MTBE went into use, oil industry insiders were privately warning of its pollution danger.

    Excerpts from a long report, linked above, by the Environmental Working Group:

    In a 1995 deposition, 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." [Excerpt | Full document]

    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. [View document]
    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 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. [Excerpt | Full document]
    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
    Better Earnings.” [Excerpt | Full document] and [Excerpt | Full document]

    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). [View document]
    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 station. [View document]






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