WASHINGTON -- Representative Joe Barton (R-Texas), chairman of the House Energy & Commerce Committee, aims to defuse a multibillion-dollar fight over cleaning up MTBE. Who pays to handle the messand how muchcould determine whether Congress passes an energy bill this year, one of the Bush administration's top legislative priorities, reported The Wall Street Journal.
The fight pits mayors and local water utilities against oil companies and other makers of the now-unpopular gasoline additive methyl tertiary-butyl ether, said to be contaminating groundwater [image-nocss] in thousands of areas.
This week, as a House-Senate conference on the energy bill is scheduled to begin, Barton is expected to unveil a compromise that includes a federal fund to help clean up contamination, the report said. He hopes the deal will make it easier for lawmakers from the Northeast and California, where MTBE damage has been greatest, to accept a House measure that gives MTBE producers a partial shield against liability. The Senate bill does not contain such a shield.
I think we're very close to a compromise that the House and Senate conferees can agree upon, Barton, who has been working out the details with Rep. Charles Bass (R-N.H.).
While the shield would protect MTBE makers from 92 pending lawsuits that call the additive a defective product, the makers are balking at how much they might have to contribute to the fund, which could top $8 billion. Said the report.
Groups of mayors, water-works officials and some state attorneys general also are complaining, it added. They say they have been shut out of the current talks and do not want to pay billions of dollars for the cleanups, which they estimate will total $30 billion.
Barton said he and Bass have been in contact with most of the groups. The objective, he told the newspaper, is a fund that minimizes red tape and maximizes cleanup of the chemical, which tends to move quickly into groundwater and does not easily break down.
Tad Furtado, spokesperson for Bass, agreed a deal is near. Our feeling is that once we've reached a place where Rep. Bass is willing to sign off, it will have crossed the political threshold where it will be good for a lot of other like-minded people. Furtado said New Hampshire was instrumental in dooming the most recent energy bill in November 2003. That measure, which also contained the partial-liability waiver, fell two votes short of the 60 needed to overcome a filibuster after the state's two Republican senators voted against it.
This time, Sen. Charles Schumer (D-N.Y.) is threatening a filibuster. If the House agreement stays in the final bill, there is a good chance [a filibuster] will stop it, he said.
Another energy-bill defeat would be bad news for oil companies, which have paid almost $300 million to settle MTBE damage claims and face billions of dollars more, said the report. After the 2003 bill died, there was a rush to the courthouse, Ed Murphy, director of refining and marketing for the American Petroleum Institute (API), told The Journal. It represents most producers of the additive, which is made from natural gas and byproducts of oil refining. The House's energy bill would nullify most of those cases by protecting companies against defective product claims filed after September 2003.
Murphy said orphan claimsones that are not being handled by existing funds or by parties found to be negligentcould be covered with a fund of $600 million to $1.6 billion. Water companies and others, he said, have vastly exaggerated the costs involved. Trial lawyers see this as their next mother lode and that's the problem, he added.
Jack Hoffbuhr, executive director of the American Water Works Association (AWWA), said water companies are very concerned that they not get stuck with the bill for contamination that they didn't cause. He told the paper that he expects cleaning up MTBE-tainted wells will cost $25 billion to $30 billion.
Senators also have received a letter from the AGs of a dozen states urging them to resist a liability waiver.
In the early 1980s, oil refiners used MTBE to boost octane, replacing tetraethyl lead, which was banned. In 1991, when Congress required oil companies to add a source of oxidation to their gasoline to reduce smog, most refiners believed MTBE fit the bill. According to Murphy, that raised the MTBE content of gasoline from less than 2% to between 10% and 15%. Lawyers representing water companies and environmental groups say oil companies knew the potential for water damage. We knew the chemical properties of MTBE, Murphy said. What people were not aware of at the time was the extent of the leaking underground storage-tank problem.
In 1988, the U.S. Environmental Protection Agency (EPA) ordered gas station owners to install leakproof tanks within 10 years. Instead, tens of thousands of stations were abandoned, leaving tanks that slowly leaked gasoline. The U.S. Geological Survey found in 2002 that water wells serving 9,000 communities in 31 states appeared to be at risk of MTBE contamination, the report said.
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