Methanex claims donations swayed Gov. Davis on MTBE

Methanex Corp., Vancouver, alleged campaign contributions swayed California Gov. Gray Davis in his implementation of a California ban on the use of methyl tertiary butyl ether (MTBE) in the state's gasoline starting in 2002. Methanex accused Archer Daniels Midland Co. of misleading and improperly influencing Davis.


By the OGJ Online Staff


HOUSTON, Mar. 9
�Methanex Corp., Vancouver, alleged campaign contributions swayed California Gov. Gray Davis in his ban on the use of methyl tertiary butyl ether (MTBE) in the state's gasoline starting in 2002.

The accusation came in an amendment Methanex made in its previously filed claim against the US government seeking $970 million in damages regarding California's MTBE ban. Methanex filed a complaint last year under the North American Free Trade Agreement because NAFTA outlaws unfair protection of domestic industries.

In the amendment, Methanex alleges Archer Daniels Midland Co. (ADM), the principal US ethanol producer, misled and improperly influenced Davis.

"ADM has a reputation for seeking to create and control markets by influencing the political decisionmakers who affect them; to that end, ADM makes large political contributions to both political parties in order to ensure that its interests are furthered," the amended complaint said.

Methanex claimed Gray received ADM campaign contributions and "met secretly" with ADM executives during his 1998 gubernatorial campaign, while the future of all oxygenates in California was under review.

Methanex claims the California MTBE ban favors the US ethanol industry. MTBE is made from methanol, and Methanex is a major producer and marketer of methanol.

California's ban threatens to reduce methanol sales. Other states have since instituted MTBE bans.

Pierre Choquette, Methanex president and CEO, said "We believe that the ban of MTBE was politically motivated and has no scientific merit."

Davis issued an executive order banning MTBE from California gasoline (OGJ Online, Oct. 20, 2000). The move was prompted after studies revealed MTBE had leaked from storage tanks into groundwater. The studies sparked public concern.

In other legal action, the Oxygenated Fuels Association, Arlington, Va., filed suit in January to block the California ban on MTBE in gasoline used in the state (OGJ Online, Jan. 29, 2001).

Last year the city of Santa Monica, Calif., sued 18 oil companies for damages that could exceed $200 million for alleged drinking water contamination.

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