Some oil companies reportedly settling MTBE suits
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ConocoPhillips, Shell, Marathon, Chevron and BP are among about a dozen oil companies that will pay $423 million to settle lawsuits brought by water suppliers in 17 states over contamination from the gasoline additive MTBE.
The suits claim the oil companies contaminated wells and underground aquifers across the country by adding methyl tertiary butyl ether, or MTBE, to gasoline as a way to reduce air pollution. They claim the oil companies hid information showing MTBE would cause "massive" contamination.
The settlement was filed Wednesday with U.S. District Judge Shira Scheindlin in New York, who is presiding over the 153 settled lawsuits brought by municipalities. The six oil companies and refineries that didn't settle include Exxon Mobil Corp., the world's biggest publicly traded oil company, according to Robert Gordon, a lawyer for the plaintiffs.
The municipalities "will use the money to continue to treat water so that it is safe and pure," Gordon said in a phone interview.
MTBE reduces air pollution by making gasoline burn more completely in a car's engine. MTBE discharged into the air contaminates groundwater through rainfall. The additive has been banned in many states.
Estimates of the cost to treat contaminated water in the U.S. have reached $30 billion. Gordon said municipalities have covered a portion of the cost. As part of today's settlement, the oil companies will fund a 30-year water treatment program for sites with excessive contamination, he said.
"We think it's an excellent settlement," Gordon said. "It provides not only cash, but peace of mind going into the future."
The settlement "was the result of arm's length negotiations that took into account a variety of objective factors," according to the 26-page agreement.
The settled cases were brought by 153 water providers in 17 states, including New York, Connecticut, Pennsylvania, Virginia, New Jersey, Massachusetts, Florida, California and New Mexico. The settlement also includes 200 lawsuits brought by individuals in Wisconsin.
The settling companies include units of Royal Dutch Shell, Europe's biggest oil company, Houston-based ConocoPhillips, the second-largest U.S. refiner, Houston-based Marathon Oil Corp., the fourth-largest U.S. oil company, Valero Energy Corp. and Sunoco. Chevron is the second-largest U.S. oil company. BP is Europe's second- largest oil company.
"Valero has entered into a settlement agreement which resolves many of the lawsuits filed against Valero relating to the company's prior use of MTBE in gasoline," company spokesman Bill Day said today in an e-mailed statement. "The settlement agreement is being reviewed by the court and is not yet final."
ConocoPhillips spokesman Bill Tanner said, "A settlement is in the works. However, there are still other issues that are outstanding, that are still subject to litigation." He declined to comment further.
Don Campbell, a spokesman for Chevron, declined to comment. BP spokeswoman Valerie Corr and Sunoco spokesman Thomas Golembeski didn't immediately return requests for comment.
James Pardo and Peter Sacripanti, lawyers for the oil companies, didn't immediately return calls.
Forty of the lawsuits named Marathon as a defendant, said company spokeswoman Linda Casey. "We consider our portion of the settlement to be minor," she said. "It's not material to the company."
A few cases remain pending against the settling companies, though most are now resolved, Gordon said. In addition, cases are pending against non-settling defendants, including Lyondell Chemical Co. New York City is also pursuing a case that hasn't settled against the oil companies.
An Exxon Mobil representative didn't immediately return a call seeking comment.
Scheindlin denied a request by the oil companies to dismiss the suits in 2005.
"Innocent water providers -- and ultimately innocent water users -- should not be denied relief from the contamination of their water supply if defendants breached a duty to avoid an unreasonable risk of harm from their products," Scheindlin said at the time.