MTBE Proposal "Gone"

Lawmakers abandon liability shield to help clear way for passing energy bill

Published in CSP Daily News

WASHINGTON -- House and Senate conferees abandoned giving makers of the gasoline additive methyl tertiary butyl ether (MTBE) liability protection against environmental lawsuits on Sunday, removing the major roadblock to enactment of broad energy legislation, reported the Associated Press.

Senate negotiators rejected a House proposal for an $11.4 billion MTBE cleanup fund that House Republicans had hoped would serve as a compromise and still provide the liability shield to the oil industry.

Representative Joe Barton (R-Texas) said "[image-nocss] the proposal has not been accepted by the Senate" and that he would offer another MTBE proposal on Monday.

Senator Pete Domenici (R-N.M.), leader of the Senate energy negotiating team, said while some MTBE issues were still being discussed, those did not include a cleanup fund, nor liability protection. "Those are gone," Domenici told reporters as the House-Senate conferees held an unusual Sunday session in hopes of completing work on a sweeping energy bill by Monday night.

If the negotiators are successful, an energy bill could pass Congress before week's end, meeting an August 1 goal to have a bill at the White House as urged by President Bush.

The MTBE liability issue has dogged lawmakers trying to pass an energy bill for more than two years. Many senators have vowed to block any bill that gives the oil industry protection against environmental lawsuits. But the House has pushed a provision that would shield the MTBE makers against lawsuits that claim the additive is a defective product because it has been found to contaminate drinking water.

As reported in CSP Daily News, Barton on Friday proposed an $11.4 billion cleanup fund for MTBE, a third of which would be paid for by the oil industry, including MTBE manufacturers, refiners and corner gasoline stations owners. MTBE, an additive introduced into widespread use in the mid-1990s to reduce air pollution, has been found to contaminate drinking water supplies in at least 36 states. Communities and water agencies say they are facing billions of dollars in cleanup costs. More than 150 lawsuits have been filed seeking cleanup payments from MTBE producers.

But the cleanup fund proposal immediately drew criticism from all sides in the MTBE dispute. Barton's proposal would have included liability protection for MTBE manufacturers. The oil industry thought the plan's requirement they that they contribute $4.1 billion into the fund was too much. Water agencies argued the fund had too many loopholes and not enough money to meet cleanup needs. The American Petroleum Institute (API), the National Petrochemical & Refiners Association (NPRA), the Society of Independent Gasoline Marketers of America (SIGMA) and the National Association of Convenience Stores (NACS), as well as the U.S. Conference of Mayors, opposed the proposal. The industry groups believed that it unfairly penalized parties not responsible for the contamination.