WASHINGTON -- House Republicans on Friday proposed an $11.4 billion fund, about a third coming from the oil industry, to pay for cleanup of water systems contaminated by the gasoline additive methyl tertiary butyl ether (MTBE), hoping to clear the way for passage of a broad energy bill.
The proposal would give makers of MTBE, which has been found to contaminate drinking water in at least 36 states, protection against liability lawsuits brought by communities facing billions in cleanup costs, said the Associated Press. The American Petroleum Institute ([image-nocss] API), the National Petrochemical & Refiners Association (NPRA), the Society of Independent Gasoline Marketers of America (SIGMA) and the National Association of Convenience Stores (NACS), as well as the U.S. Conference of Mayors, have decried the proposal.
Representative Joe Barton (R-Texas) presented the proposal to Senate leaders involved in energy bill negotiations. They reserved comment on the plan, saying it needed closer examination. We've not passed judgment. We're trying to understand it, said Senator Jeff Bingaman (D-N.M.), the leading Democrat on the Senate group negotiating with the House on final energy legislation.
Barton, who is chairman of the energy conference, said the proposal is not set in concrete and that it could change.
The MTBE issue has been seen as the most difficult and most contentious issue to overcome as lawmakers try to approve an energy bill. A number of senators have pledged to block legislation that would shield the MTBE manufacturers from liability lawsuits. More than 150 lawsuits seek damages because of MTBE water contamination. The cost of cleanup has ranged from several billion dollars to more than $30 billion.
Barton's proposal calls for industryfrom MTBE makers to retail gasoline outletsto pay $4.1 billion into the fund over 12 years. The government would come up with another $4.5 billion and states are expected to contribute about $2.8 billion in matching funds.
The legislation, if approved, would nullify any lawsuitsat least as they apply to product defect liabilitythat have been filed since Sept. 5, 2003, with one significant exception: a lawsuit filed by the state of New Hampshire.
The provision exempts from the liability shield any lawsuit filed by a state attorney general. Only New Hampshire has taken such legal action. Rep. Charles Bass (R-N.H.), who has been involved in the negotiations, said the exemption was made because states are sovereign entities, unlike communities or water agencies, which have filed most of the legal cases on MTBE.
Bass dismissed suggestions that there may also have been a political reason for carving out New Hampshire. The state's two senators are among those who have been strongly opposed to a liability shield for MTBE manufacturers and have vowed to block legislation through filibuster and other procedural means.
It takes 60 votes to overcome a filibuster in the Senate. Two years ago, an energy bill fell two votes shy of getting the 60 votes that were needed to thwart a filibuster over MTBE.
A joint statement issued by API, NPRA, SIGMA and NACS regarding the MTBE proposal by Barton and Bass:
While we have not yet had an opportunity to study the details of the proposal, we are disappointed by what we have seen. Our goal from the beginning was to reach a fair solution that continues to require those companies that are responsible for water contamination to pay for it. This proposal goes well beyond that, creating a cleanup fund that is much larger than what experts indicate is needed to take care of the problem. In addition, it fails to recognize that the product liability relief the industry has been seeking is a narrow one.
The industry has been and remains committed to cleaning up any contamination of water supplies that it is responsible for.
[We] salute Chairman Barton for his continuing efforts to resolve differences around the MTBE issue, but we are unable to offer our support for this proposal as we currently understand it.
Conference of Mayors Executive Director Tom Cochran issued the following statement:
On behalf of the nation's mayors, I am extremely disappointed with the news of a proposedMTBE deal betweenBarton and the industry producers of MTBE.
According to press statements, the industry will provide a one-time only contribution to a cleanup fund to be administered by the EPA. Not only is the fund woefully inadequate to cover the full costs of cleaning MTBE-contaminated sites, but also it will not cover the cost of cleaning the drinking water supply. Further, any monies not used from the fund will be returned back to the industry.
Most disturbing about this deal is that it was reached without any stakeholders responsible for the public health of their communities at the table. Not one member of the Conference of Mayors or other partner organizations was consulted or asked to participate in these discussions.
The Conference has consistently maintained that any deal must include full cost recovery to community water systems; cover the cost of cleaning drinking water, not just removing leaking tanks; include no unfunded mandate on local governments; include no bailout for MTBE producers; and ensure that cleanup funds are not be subjected to annual appropriations.
Once again, tax payers are being saddled with a cost that should be paid by the industry and the nation's mayors must find additional resources to cover yet another unfunded mandate.
This is simply bad policy.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.