Gasoline Costs

New York, NY: (May-07-08) 153 public water providers in 17 states brought a lawsuit against a dozen of the nation's largest oil companies, alleging that groundwater had been contaminated by the gasoline additive MTBE. The suit named BP America Inc., a unit of BP PLC, Chevron Corp, ConocoPhillips, Shell Oil Co., Marathon Oil Corp., Citgo Petroleum Corp., Sunoco Inc, Valero Energy Corp. and Exxon Mobil Corp., as defendants. Officials with the US Environmental Protection Agency term the gasoline additive a known animal carcinogen and a possible human carcinogen. Investigations conducted in several states show that it has been detected in at least 36 states and has been banned in 23, including CA and NY, which accounted for 40% of total MTBE consumption in the US. In their defense, MTBE producers stated that because the government mandated the addition of oxygenates to gasoline to help curb smog, the companies shouldn't be held liable for MTBE damages.

As part of a settlement reached in the case, the oil companies agreed to a $423 million payout in cash to resolve the lawsuit. Apart from the payout, the companies also agreed to pay cleanup costs that arise in the next 30 years. Sources stated that the settlement doesn't shield defendants from liability in the event MTBE is shown in the future to carry human health risks. Under the terms of the agreement, the local water providers will be compensated according to a formula based on MTBE levels and the size of wells. [THE WALL STREET JOURNAL: OIL FIRMS SETTLE CLAIMS IN MTBE LEAK CASES]

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Published on May-9-08