Water Utilities to Congress: Don't Let Water Polluters Off the Hook

Communities across America would be forced to pay in excess of $29 billion in MTBE water contamination cleanup costs if Congress approves legislation that would offer liability immunity to the petroleum and MTBE industry.

Four of the nation’s largest water utility associations today sent a letter urging the U.S. Senate to oppose the liability immunity legislation (H.R. 6 and S.791) that is expected to reach the Senate floor the week of June 1, following Congress’ Memorial Day recess.

The associations also asked Congress to oppose clauses in the same legislation granting liability immunity to the producers of ethanol. The associations believe that more scientific research needs to be completed to determine the environmental impacts of ethanol in water supplies.

The letter to the U.S. Senate (see below) was signed by the American Water Works Association, the Association of Metropolitan Water Agencies, the National Association of Water Companies and the Association of California Water Agencies.

Ironically, MTBE was first used as an inexpensive fuel additive to help clean the air. But hundreds of cities throughout America soon found the chemical contaminating their water supply. The EPA has identified MTBE as a possible human carcinogen that renders water undrinkable due to its foul taste and odor of paint thinner. MTBE is now banned in 17 states.

Moreover, the MTBE industry knew of the additive's environmental dangers long before it was put in use to meet the oxygenate requirement. While MTBE was the most inexpensive solution at the time of the oxygenate requirement, documents uncovered in a lawsuit by the South Tahoe Public Utility District against eight oil companies demonstrate the MTBE industry's knowledge since the early 1980s that the product spread rapidly in groundwater and was difficult to clean up.

MTBE enters groundwater primarily from leaking underground storage tanks at gas stations and because MTBE is extremely soluble, it moves much farther and faster in water than the other ingredients in gasoline, making it difficult to clean up. Gasoline leaking from underground storage tanks has been responsible for contaminating drinking water wells across the country with MTBE. Recent studies estimate that it would cost $29 billion to clean up more than 500 public drinking-water wells and 45,000 private wells throughout the nation that are contaminated with MTBE.

Several lawsuits brought against the producers of MTBE by local communities, whose water supplies were contaminated have been successful, but without legal protection, water utilities fear that producers will have little incentive to clean up contaminated water supplies. The contamination also leaves local communities’ with the costs for acquisition of new sources of water, such as new pipelines and wells.

Congress is proposing to let the petroleum industry and the MTBE producers off the hook, leaving communities to pay for the clean up. Recent studies estimate that it would cost $29 billion to clean more than 500 public drinking-water wells and 45,000 private wells throughout the nation that are contaminated with MTBE.

"The ultimate victims of product liability immunity will be the American people, who will lose their aquifers to contamination and lose their money to cleanups and acquisition of new sources of water," the water associations stated in their letter to the Senate.

"Contrary to claims by oil companies and ethanol producers, product defect liability immunity is not narrowly tailored. In a major way, these provisions shift liability for clean up away from producers to water consumers. They also shift liability to retailers and distributors, who are in no way responsible for the decision to produce a product that has as much capacity for environmental harm as MTBE and who are likely to lack the resources necessary to remedy the problems created by MTBE in the first place."

May 22, 2003

Subject: OPPOSE ETHANOL & MTBE LIABILITY IMMUNITY

Dear Senator:

The organizations above strongly oppose provisions in energy legislation that would provide product liability immunity ("safe harbor") to renewable fuel and MTBE producers. The House already has passed energy legislation (H.R. 6) that gives product defect liability immunity for MTBE (methyl tertiary butyl ether) and renewable fuels, such as ethanol. The Senate will consider immunity for ethanol in S. 791/S. 14. If these provisions are eventually enacted, producers will have little incentive to clean up water supplies contaminated by these products or cover water systems’ costs for clean up and/or acquisition of new sources of water.

The ultimate victims of product liability immunity will be the American people, who will lose their aquifers to contamination and lose their money to cleanups and acquisition of new sources of water.

Contrary to claims by oil companies and ethanol producers, product defect liability immunity is not narrowly tailored. In a major way, these provisions shift liability for clean up away from producers to water consumers. They also shift liability to retailers and distributors, who are in no way responsible for the decision to produce a product that has as much capacity for environmental harm as MTBE and who are likely to lack the resources necessary to remedy the problems created by MTBE in the first place.

Last year a jury found that MTBE was a defective product in a case brought by the South Tahoe Water District in California, resulting in a settlement in which oil companies agreed to pay to clean up MTBE-contaminated water supplies. Factored into the jury’s decision were documents produced at trial proving that gasoline manufacturers have known for many years that MTBE spreads in the environment farther and faster than other constituents of gasoline and is enormously expensive to cleanup. The environmental damage that may be associated with ethanol is completely unknown, but if it is safe, why are its producers so anxious to receive product liability immunity?

Protect the American people from contaminated water supplies and the cost of cleanups. Please say no to liability immunity for ethanol and MTBE producers.

Diane VanDe Hei, Executive Director Tom Curtis, Deputy Executive Director

Association of Metropolitan Water Agencies American Water Works Association

Steve Hall, Executive Director Peter Cook, Executive Director

Association of California Water Agencies National Association of Water Companies

1. The liability waivers in H.R. 6 and S. 791 are NOT narrowly tailored. If product liability immunity ("safe harbor") is enacted for ethanol and MTBE, refiners would be let off the hook even when those products have defects that cause environmental harm. Without the deterrent of product liability claims, refiners will have little incentive to clean up contaminated groundwater.

2. Water associations don't oppose the use of ethanol, but ethanol is not innocuous. Before Congress waives producers' liability, more study is needed to determine its environmental effects.

• In ground water plumes, ethanol consumes dissolved common electron acceptors needed for anaerobic biodegradation of BTEX (benzene, toluene, ethyl benzene, and xylenes). Because BTEX compounds are relatively soluble in water and can diffuse rapidly once introduced into an aquifer, anaerobic (in the absence of oxygen) biodegradation of BTEX is often used to reduce or eliminate BTEX contamination levels.
• Ground water plumes containing ethanol and gasoline biodegrade more slowly than a plume containing only gasoline because ethanol is also decomposed by the degrading bacteria, or because ethanol is toxic to certain degrading bacteria.
• Ethanol exerts a higher biochemical oxygen demand (BOD) than other gasoline components. In water, when BOD levels are high, dissolved oxygen (DO) levels decrease. In surface water sources, when less DO is available in the water, other organisms such as fish and other aquatic organisms may not survive.
• Indications from several studies on the effect of ethanol on BTEX ground water plumes show that are likely to increase in size with the presence of ethanol. The magnitude of increase is unknown, although it is dependent on the length of time the ethanol and BTEX plumes are in contact with each other.

3. MTBE was NOT mandated. Neither the Clean Air Act nor EPA regulations require the use of MTBE, or any particular oxygenate.

4. MTBE-contaminated water isn't just unpalatable, it's UNDRINKABLE. MTBE-tainted water is so foul smelling and tasting that it has caused water systems to shut down hundreds of wells and consumers believe their health will be harmed if they drink it. MTBE is classified as a possible human carcinogen by EPA.

5. Estimates to clean up MTBE run as high as $29 billion. Water systems and consumers should never have to pay for this.

Source: American Water Works Association