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MTBE: The Exxon Valdez of the Lower 48

October 21, 2009

A federal jury yesterday found ExxonMobil liable for product liability, trespass, public nuisance, and negligence in connection with the company’s use of the gas additive MTBE. The company was sued by New York City for MTBE-contaminated drinking water that was found in areas where leaking storage tanks and other gas leaks contaminated groundwater.

Lawyers for the city argued that the oil company knew that MTBE would contaminate groundwater, and that its own scientists and engineers warned the company not to use the additive in areas that could suffer groundwater contamination. They also showed that ExxonMobil knew but failed to warn the public about the health dangers from MTBE.

The jury awarded New York City $105 million for damages; ExxonMobil, which boasts annual profits of about $40 billion, is appealing the verdict.

MTBE is an octane-booster that was promoted by industry for cutting down air emissions. Little evidence backed industry’s clean air claims, and a 1999 blue-ribbon EPA panel concluded that the use of chemical was unnecessary. But the health hazards relating to MTBE contamination of the nation’s waterways are undeniable. In addition to being a probable carcinogen, its foul smell makes water undrinkable, and the chemical acts to accelerate the spread of other contaminants, such as benzene, a known carcinogen. As recently as 2005, an analysis of state water testing data found that more than 1850 water systems in at least 29 states, the water supply for more than 45 million Americans, had been contaminated by MTBE. At the time, the American Water Works Association estimated nationwide MTBE cleanup and water replacement costs at $29 billion – about nine times the amount Exxon reportedly spent on the Valdez clean-up.

While oil companies have long argued that government clean air requirements forced them to use MTBE, in fact a long trail of internal documents showed that oil companies, who produce and sell MTBE, urged regulators to adopt MTBE as an air quality additive. As one top oil executive admitted, “the oil industry… brought this [MTBE] forward as an alternative to what the EPA had initially proposed.”

As early as 1980, Exxon knew that MTBE could contaminate groundwater when underground tanks leaked. According to an advocate for communities polluted by MTBE, about 20% of underground gas tanks nationwide were known to leak. “They put this stuff in tanks knowing it would race its way to groundwater and to drinking water supplies,” he stated. In 1980, a company engineer testified that MTBE from three leaking tank fouled wells for a planned subdivision in Jacksonville, Maryland. At Shell, engineers joked that MTBE stood for “Menace Threatening Our Bountiful Environment,” and “Major Threat to Better Earnings.”

In 2002, in the first case of its kind on MTBE pollution, a California jury found that Shell and other oil companies knew that MTBE would contaminate waterways and that the companies acted with “malice” by failing to warn communities about the dangers of MTBE contamination. A lawyer for a community group in the case stated, “It was proven that the companies’ own scientists for almost a decade were saying, ‘Don’t put MTBE on the market, or you’re going to create a big environmental disaster.’ The companies put it out anyway.” The jury foreman noted that oil companies knew of the dangers but ignored them because they “saw money to be made in selling the product.”

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