MTBE Litigation - Background

Those who spill or leak gasoline -- with or without MTBE -- are required by law to clean it up.  If they do not do so, litigation may be appropriate.  In the past few years, a different type of lawsuit has emerged; one which seeks to bypass this “spiller pays” rule and, instead, hold the oil industry liable for putting MTBE in gasoline in the first place.  The lawyers who have filed these cases claim that gasoline containing MTBE is a defective product.  It is not.  MTBE did what it was supposed to do, help clean the air.  It is wrong to sue companies for following the directive of Congress to add an oxygenate like MTBE to gasoline, when Congress and the EPA expected and intended MTBE to be used to fulfill that mandate. 

This Web site is intended to assist the media in understanding MTBE litigation and the issues underlying the litigation. If you have any questions, please call (866) 280-0313.

Overview
In 1990, Congress amended the Clean Air Act to require that gasoline sold in areas with significant air pollution contain an oxygenate. Adding oxygen to gasoline promotes more complete combustion of the gasoline, and cuts down on air pollution. At the time, Congress and the EPA knew that MTBE would be the primary oxygenate used given supply, transportation and other difficulties with using alternatives such as ethanol.

There were two programs that required the use of oxygenated fuel: a winter oxyfuel program in cities with elevated levels of carbon monoxide and a year-round Reformulated Gasoline (RFG) program in cities with the worst ground-level ozone (smog). Reformulated gasoline containing an oxygenate such as MTBE is required in as much as 30% of the entire country's gasoline supply.

Although use of MTBE was not expressly mandated, refiners used it in most markets because it was the only practical option given supply, cost and transportation issues. Congress expected and intended the industry to rely on MTBE to comply with its directive.

MTBE worked. It helped clean the air significantly. Federal and state regulators have acknowledged the air quality benefits of adding MTBE and other oxygenates to gasoline. EPA has said that since the RFG program began in 1995, it has resulted in combined annual reductions of 105,000 tons of smog-producing emissions and at least 24,000 tons of toxic air pollutants like benzene. This is equivalent to taking 16 million cars off the road, according to the EPA. The EPA has also said that “75 million people are breathing cleaner air because of RFG.”

In addition to its air cleaning benefits, use of MTBE involves tradeoffs.  MTBE can give drinking water an unpleasant taste and odor at certain concentrations when gasoline containing it is released into the environment, and the MTBE reaches groundwater used to provide water for consumer purposes. When the federal government effectively mandated the use of MTBE in 1990, it knew the risk the additive posed to groundwater. See related link: Federal Government's Knowledge of MTBE's Risks to Groundwater When the Government Required Its Use

Prior to the enactment of the 1990 Mandate, EPA had completed a two-year review of the risks MTBE posed to the environment and to human health. With extensive information about actual and potential environmental impacts, EPA again approved the use of MTBE in gasoline. The federal government made the decision to effectively require the use of MTBE despite its well-known risks to groundwater.

Instances of MTBE impacts on drinking water have decreased significantly in recent years for two reasons. First, most old steel underground storage tanks have been replaced as a result of an EPA mandate requiring tanks to be upgraded by 1998. And gasoline releases are being cleaned up – under stiff federal and state laws requiring those who release gasoline into the environment, with or without MTBE, to clean it up.

According to EPA, the number and extent of gasoline releases have steadily declined in recent years. In an EPA report released in November 2004, the agency reported that the number of confirmed releases dropped 35 percent from 2003, and the number of sites requiring remediation was down five percent from 2003.

Notwithstanding this fact, an enterprising group of trial lawyers has convinced some water providers and state and local governments to sue the oil industry for using MTBE in gasoline – despite the fact that Congress effectively required it. To date, over 70 lawsuits have been filed. Most of the cases have been consolidated in federal court in the Southern District of New York.

In the vast majority of the cases, the levels of MTBE present in groundwater are negligible or nonexistent. EPA has advised that an MTBE threshold level of 20-40 ppb is sufficient to avoid taste and odor concerns and render the water fully potable. Frequently, the cases are based on old detections, or detections well below EPA levels. To date, no case has gone to final judgment. Several have been dismissed. A few have resulted in settlements. Lawsuits against oil companies for making and marketing gasoline containing MTBE are wrong. It is inappropriate to hold companies liable for using MTBE when the federal government effectively mandated its use.

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