U.S. Water News Online
SAN FRANCISCO -- Oil companies have agreed to pay $28
million to settle a case involving pollution of Lake Tahoe
groundwater with the gasoline additive MTBE.
Shell Oil Co., Shell Products Co., Equilon Enterprises LLC and
Texaco Inc. agreed to settle with the South Tahoe Public Utilities
District and formalized their deal in San Francisco Superior Court.
In April, a jury found the companies liable for pollution with
MTBE, which the U.S. Environmental Protection Agency has said may
The companies maintain they aren't liable, despite the settlement.
``We felt that settling now was the best thing to do to no longer
deal with protracted litigation costs,'' said Shell spokesman Cameron
The utilities district sued the companies in 1998 after MTBE
pollution forced it to close a third of its drinking-water wells. The
south Tahoe area has shallow wells, many near gas station storage
tanks, and surface runoff helped the chemical reach drinking water.
Dennis Cocking, spokesman for the district, said the $69 million
from both the recent settlement and prior settlements in the case
should cover the cost of cleanup as well as legal fees.
``We're very gratified,'' Cocking said. ``We achieved what we set
out to achieve.''
It likely will cost $35 million to $40 million to clean the wells,
Cocking said, though some estimates have ranged as high as $45
Despite being a potential carcinogen, MTBE has been used as an
oxygenate in gasoline to help some regions reach federal clean air
During the trial, water district lawyers produced documents they
said showed the companies knew MTBE could move through groundwater.
A spokesman for the Oxygenated Fuels Association said the problem
stemmed from faulty underground tanks, not the additive.
``There's very few new MTBE detections in California right now,''
said Frank Maisano, of the Washington D.C.-based trade group. ``The
storage tank issue is where the real problem is. MTBE has been very
valuable to the air quality of California.''
The recent deal, approved by Judge Carlos Bea, also included a
separate $300,000 settlement between the utilities district and a
Tahoe gas station. Lyondell Chemical Co., once a leading producer of
MTBE, agreed to pay $4 million to settle the case.
Shell Oil Products US announced in June it would join other
suppliers and stop using MTBE in gasoline sold in California by the
end of 2002.
The case is South Tahoe Public Utilities District v. Atlantic
Richfield Co., CGC-98-999128.
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