By OGJ editors
HOUSTON, July 22 -- Key oil industry groups refused to support a House Republican proposal July 22 for a fund to clean up methyl tertiary butyl ether from US water supplies.
The proposal is for an $11.4 billion fund, about one-third from the oil industry, for the rehabilitation of water systems found to contain the gasoline oxygenate.
It comes as a conference committee tries to reconcile House and Senate energy bills that differ, among other things, over protection for MTBE handlers from product-defect liability in water-contamination cases. The House bill offers the protection, while the Senate bill does not.
The fund proposal is an attempt to make limited MTBE liability protection acceptable to opponents. Disagreement over the issue has helped kill past efforts by Congress to pass comprehensive energy legislation.
The American Petroleum Institute, National Petrochemical and Refiners Association, Society of Independent Gasoline Marketers of America, and National Association of Convenience Stores issued a statement withholding support of the proposal, which Reps. Joe Barton (R-Tex.), the conference committee chair, and Charles Bass (R-NH) made to Senate conferees.
"While we have not yet had an opportunity to study the details of the proposal, we are disappointed by what we have seen," the statement said. "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."
API recently released a study indicating that the unfunded costs of cleaning up MTBE that has leaked into groundwater don't exceed $1.5 billion. Most such costs, the study said, would be paid by responsible parties, a federal trust fund for remediating leaks from underground storage tanks, state clean-up funds, and private insurance (OGJ, July 11, 2005, Newsletter).
Supporters of the liability protection argue that leaked MTBE isn't defective and that other, more-relevant causes of action are available to plaintiffs in water-contamination cases. In product-defect cases, plaintiffs have to prove only that defendants sold the product.
Refiners add MTBE to gasoline to meet oxygen requirements set by the Clean Air Act Amendments of 1990.
