Protection For Fuel Additive Dropped

By Juliet Eilperin
Washington Post Staff Writer
Wednesday, July 27, 2005

Around the country, more than 1,800 communities are struggling with how to clean up drinking water fouled by a gasoline additive originally aimed at reducing air pollution, and who should pay for it. The oil industry had hoped Congress would shelter it from legal liability for the cleanup as part of this year's massive energy package, but that effort ground to a halt Monday night, as House Republicans jettisoned a plan to protect the additive's manufacturers from defective-product lawsuits.

The question of how to address problems stemming from methyl tertiary butyl ether (MBTE) -- a substance oil companies began adding to gasoline in the 1980s -- scuttled the energy bill two years ago, and lawmakers did not want a repeat this year.

House Energy and Commerce Committee Chairman Joe Barton (R-Tex.) told reporters yesterday that when his Senate counterparts -- Energy and Natural Resources Committee Chairman Pete V. Domenici (R-N.M.) and Jeff Bingaman (N.M.), the ranking Democrat -- told him the provision could torpedo the bill once again, "I accepted their judgment. . . . The agreement I made with the Senate is I wouldn't put it forward, and I'm not going to."

Barton originally wanted total legal protection for MTBE manufacturers, then last week offered a compromise measure with Rep. Charles Bass (R-N.H.) that would have established an $11.4 billion cleanup fund over the next 12 years. Under that plan, industry would have paid about one-third of the cost, but oil companies and local officials complained about the price tag.

Water utilities estimate the nationwide cleanup will cost between $25 billion and $80 billion; the American Petroleum Institute recently suggested it would cost no more than $1.5 billion.

Federal officials are investigating whether the additive, when ingested, causes cancer, and many residents refuse to drink it on the grounds that it makes their water taste and smell unpleasant. Twenty-one states have banned MTBE, and the industry has paid out $485 million to settle eight lawsuits since 1998.

"It's a victory for towns and cities across America," said Piscataway, N.J., Mayor Brian C. Wahler, a Democrat who lobbied against Barton's provision on behalf of the U.S. Conference of Mayors and the National League of Cities. Wahler's township has spent $2 million to install new water lines aimed at avoiding MTBE contamination, and plans to spend another $500 million over the next year and a half.

Industry officials said they were disappointed with the final energy bill, since they had begun adding MBTE to gasoline in an effort to improve combustion and meet federal Clean Air Act requirements.

"It puts the industry in the difficult position of being penalized for obeying the law," said Bob Slaughter, president of the National Petrochemical and Refiners Association. "We think our [legal] case is strong, but it would be better not to have to worry about something that puts the industry in an unfair position."

Critics of the oil industry point to internal documents that suggest officials knew in the early 1980s that MTBE could pose an environmental threat. One Shell document unearthed as part of a lawsuit joked the acronym stood for "Menace Threatening our Bountiful Environment" and "Major Threat to Better Earnings."

House Republicans managed to insert a provision allowing either party in a future lawsuit over MTBE to petition to move the case to federal court, at which point a judge would decide whether to accept it. Some oil companies prefer to fight the matter in federal court, which oversees 75 percent of MTBE lawsuits.

Rep. Lois Capps (D-Calif.), who fought immunity for gasoline-additive manufacturers, said the House Republicans' policy shift "sends a signal to the grass roots" that they can win on Capitol Hill when they mobilize quickly enough.

"They realized they could lose the bill again," Capps said. "I think it just got too hot for them."

Staff writer Justin Blum and researcher Don Pohlman contributed to this report.

© 2005 The Washington Post Company