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$422 Million Settlement Reached Over MTBE Water Pollution

Chevron, BP and other oil companies will pay $422 million to settle claims brought by 153 public water providers over drinking water contaminated by the gasoline additive MTBE.

The agreement stems from several lawsuits filed by municipalities, water utilities and private water companies from 17 states that were consolidated in federal multidistrict litigation proceeding in the U.S. District Court for the Southern District of New York.

The deal, announced Thursday, is largest settlement with oil companies over water contamination caused by MTBE, according to Baron & Budd, one of the plaintiffs' law firms.

Firm attorney Scott Summy said the settlement was a "significant step" toward helping the water utilities keep drinking water safe for the public.

"Many of these public water providers were facing federal legislation that would grant immunity to the oil companies for MTBE product liability contamination at the time these cases were filed," he said in a statement.

The settlement calls for the oil companies to pay a share of treatment costs for wells the plaintiffs own or operate that sustain future MTBE contamination.

The settling defendants represent 70 percent of the country's oil refiners, including Citgo, ConocoPhillips, Shell and Atlantic Richfield.

ExxonMobil did not participate in the settlement and will face the first of numerous trials over MTBE contamination in September.

"The suits are without merit, and our conduct did not cause physical injury or damages," the company said in a statement.

Following a congressional mandate to reduce air pollution, the Environmental Protection Agency in 1990 required that gasoline blended for use in certain areas contain at least 2 percent oxygen by weight.

Oil companies then began adding MTBE to their gasoline. The additive leaked from underground storage tanks and contaminated groundwater throughout the country.

Facing an onslaught of litigation, the companies have since replaced MTBE, a known carcinogen, with ethanol.

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