Oil companies agree to settle MTBE contamination lawsuits

By ADAM SCHRECK AP Business Writer

NEW YORK (AP) - At least two major oil companies said late Wednesday they have agreed to settle lawsuits over the use of the gasoline additive MTBE, a potential carcinogen that has been found in drinking water.

Representatives of Valero Energy Corp. and Chevron Corp. said they had joined the settlement, although a number of other oil companies are also named in a memo supporting the deal that was obtained by The Associated Press.

The companies confirmed their involvement after The Wall Street Journal reported on its Web site that several oil companies agreed to pay $423 million plus cleanup costs to settle groundwater contamination litigation involving 153 public water providers in 17 states. That would make it the largest settlement to date involving the additive.

"We've worked hard to reach a responsible resolution to the cases being settled and are pleased to be moving forward," Chevron spokeswoman Stephanie Price said.

Valero's agreement "resolves many of the lawsuits" filed against the oil refiner over its prior use of the gasoline additive, company spokesman Bill Day said in a brief statement to the AP.

He said the "settlement agreement is being reviewed by the court and is not yet final." He did not provide details of the agreement and declined to name other companies involved in the deal.

According to the Journal, the other defendants settling include BP PLC's BP America Inc., ConocoPhillips, Royal Dutch Shell PLC's Shell Oil Co., Marathon Oil Corp., Petroleos de Venezuela SA's Citgo Petroleum Corp. and Sunoco Inc.

Those companies were among those listed in the court document obtained by the AP. Messages left with the companies seeking comment were not immediately returned.

At least six companies declined to settle, the largest being ExxonMobil Corp., the Journal said.

Each company's contribution to the settlement was undisclosed, as was the potential cleanup cost. Past estimates have put the tab to remediate all tainted sites as high as $30 billion, the Journal reported.

The newspaper's report quoted Scott Summy, an attorney for the plaintiffs, who said covering the cleanup costs for 30 years was a "creative approach" to resolving a matter that involves so many parties. That provision of the settlement removes the threat of litigation over future contaminated wells, he told the Journal.

The AP could not immediately reach the plaintiff's attorneys for comment.

MTBE, or methyl tertiary butyl ether, is a chemical added to gasoline to boost its octane level and cut air pollution. It was first added to gasoline in 1979, but its use declined after it was banned in a number of states.

MTBE has been found in ground water, including in some communities' drinking water supplies. The Environmental Protection Agency said the chemical is a potential human carcinogen at high doses, although it is unclear at what level it poses a health risk.