GOP Considers Eliminating MTBE Provision in Energy Bill

WASHINGTON – On the day that senators blocked an energy bill, officials in Santa Monica, Calif., announced that three oil companies had agreed to pay $92.5 million to rid the city's drinking water of a smelly gasoline additive called MTBE (search).

It was a coincidence of timing that dramatized how two issue have become intertwined.

A national controversy over MTBE fouling drinking water has cut to the heart of an emotional debate in Congress over energy legislation (search) and could determine whether President Bush gets a bill he badly wants this year.

"It's another tobacco thing all over again," House Speaker Dennis Hastert said Sunday when asked to explain why the measure abruptly stalled in the Senate last Friday after GOP leaders couldn't get enough support to bring it to a vote.

Hastert, R-Ill., blamed trial lawyers for complicating the energy debate by pursuing scores of lawsuits against MTBE manufacturers over water pollution cases. "The trial lawyers have held up the entire energy bill," he said on "Fox News Sunday."

Put together in more than two months of closed-door negotiations between House and Senate Republicans, the legislation would shield MTBE manufacturers from lawsuits such as the one that led to the Santa Monica settlement.

But this "safe harbor" provision, buried in the 1,148-page bill, created an unusual coalition of Republicans and Democrats, liberals and conservatives, against the bill.

Barring unforeseen concessions, Senate GOP officials said, it's increasingly doubtful that Congress will be able to pass an overhaul of the nation's energy agenda this year.

While Senate Republicans have explored the possibility of deleting the MTBE liability measure from the bill, House GOP leaders were said to be adamant about keeping it in.

"If we can't get it done by Tuesday, we won't see (the energy bill again) until January." Senate Majority Leader Bill Frist, R-Tenn., said Sunday.

If production of ethanol (search), a corn-based additive, is to be expanded, protection for MTBE manufacturers must be part of "a true compromise that will become law," House Majority Leader Tom DeLay, R-Texas, insisted. He said senators were using MTBE "as a scapegoat to obstruct" the legislation.

The MTBE provision has been pushed by DeLay and two of the principal architects of the House energy bill - Reps. Billy Tauzin, R-La., and Joe Barton, R-Texas. Three-fourths of the MTBE is made in Texas and Louisiana.

Once viewed as key to reducing air pollution from cars, MTBE became an object of scorn when it was realized it was difficult to contain and clean up once it gets into drinking water.

Traces have been found in almost every state and it has the potential of becoming a cleanup problem in at least 28 states, according to government and private studies.

Mayors, other local officials and operators of water management systems are lobbying hard against the MTBE liability waiver, fearing it will leave taxpayers and water users with the cleanup bill.

They and environmentalists produced copies of MTBE industry documents - part of a California lawsuit - that suggested the companies knew in the mid-1980s that MTBE posed a water pollution risk because it was more soluble than other gasoline components and could be expected to leak from storage tanks.

The number of contaminated wells could triple after the widespread use of MTBE in Exxon gasoline, a company engineer warned in a memo in 1984. While MTBE may be less toxic than other gasoline components such as benzene (search), another Exxon memo in 1985 warned, health agencies may require its removal "based on its taste and odor."

The National Conference of Mayors (search) has estimated that the cleanup bill from MTBE contamination could be as high as $29 billion nationwide.

But a spokesman for MTBE manufacturers, Frank Maisano, called those estimated cleanup costs "wildly overstated." He said at most $1 billion in cleanup from gasoline spills can be "directly attributed to MTBE remediation."

Lawsuits could still be pursued based on negligence when gasoline is spilled or gets into water from leaking tanks, Maisano said.

On Friday, officials in Santa Monica, Calif., announced a tentative settlement in which Shell, ChevronTexaco and ExxonMobil agreed to pay $92.5 million for water cleanup from MTBE problems. Earlier, MTBE makers agreed to pay $69 million for cleanup from a lawsuit in South Lake Tahoe, Calif.

Future lawsuits could be even more expensive. The state of New Hampshire filed suit in September against 22 companies because MTBE has fouled numerous drinking water sources in the state.