Public and governmental scrutiny of the gasoline additive methyl tertiary butyl ether ("MTBE") has grown dramatically over the last several years. This relatively new product is added to gasoline for the sole purpose of reducing air pollution. Ironically, MTBE's current notoriety stems from its contrary propensity to contaminate water. Thus, while use of MTBE reduces air pollution, it has the potential to increase water pollution. How serious a problem it is and what can be done about it are questions that cannot yet be answered, but a discussion of the issues can help avoid or minimize the potential liabilities involved. This article summarizes current EPA activities involving MTBE and the existing case law addressing it, and discusses the practical impact current remediation strategies may have in fueling or quenching the possible MTBE litigation wildfire.

MTBE is an oxygenate, meaning that it raises the oxygen levels in gasoline, making it burn more completely, thereby reducing harmful automobile emissions. Because it is relatively inexpensive, it is more commonly used than the alternative, ethanol. Since Congress raised the oxygenate requirement in fuel with amendments to the Clean Air Act in 1992, MTBE has been used in higher concentrations, and in 1999 was being produced at a rate of over 200,000 barrels per day.

Because of its widespread use, coupled with the fact that it is highly soluble in water, MTBE is commonly detected as a prominent component of contaminated groundwater. The majority of MTBE water contamination stems from leaks in underground storage tanks (USTs), which store gasoline and other petroleum fuels. Other sources of contamination include pipeline leaks and spills associated with the fueling and use of automobiles.

MTBE is characterized by a foul odor and offensive taste even in extremely small concentrations, making it unsuitable for consumption by humans in their drinking water. Although MTBE is beneficial to the environment because it reduces harmful air emissions, concerns have been raised about the health risks to individuals exposed to MTBE, including the potential for acute inhalation effects from gasoline pumping and chronic effects from drinking water contaminated with MTBE. It is not yet known whether MTBE is a carcinogen; research on this question continues. In May 2000, the Natural Toxicity Program in the Department of Human Services removed MTBE from its list of carcinogens. The current Environmental Protection Agency position is that MTBE is not likely to cause cancer or other serious illness if it is ingested, although it has been found to cause cancer in laboratory animals that inhaled MTBE vapors in high concentrations. The actual risks associated with MTBE exposure are, therefore, still uncertain.

Government Action

With concerns over MTBE contamination rising, the EPA established a Blue Ribbon Panel in 1998 to investigate the competing interests of air quality and water quality. The Panel gathered information concerning the effects of oxygenates and available alternatives that satisfy the demand for better air quality while reducing the effects of groundwater contamination. Following a six-month investigation, the Panel made several recommendations. These included: amending the Clean Air Act to reduce or eliminate the oxygenate requirement; improving efforts to ensure the safety of USTs; reducing the overall use of MTBE; and increasing research on MTBE and available substitutes.

As incidences of MTBE contamination rise, both state and federal action has been taken to address growing health concerns and alleged environmental degradation. As of June 2000, twenty-one states had either passed or had pending legislation specifically addressing MTBE. Between January and March of 2001, six bills were introduced in Congress on MTBE. California made one of the most aggressive moves when Governor Davis issued an Executive Order in 1999 banning the use of MTBE beginning in 2002. The EPA has also taken regulatory action to phase out the use of MTBE, and the Clinton-Gore Administration invoked the Safe Drinking Water Act requiring public water systems to monitor for MTBE. It is still uncertain what the Bush Administration's position will be concerning MTBE. However, on June 12, 2001 the EPA denied California's request for a waiver from the Clean Air Act requirement that all reformulated gasoline contain a minimum of two percent oxygen content.

MTBE Litigation - The Tip of the Iceberg?

Because MTBE is soluble in water, it essentially moves at the same speed as the groundwater it invades. Consequently, entire towns may be affected when major leaks or spills occur, and class action lawsuits have been popping up all over the country with claims based on negligence, conspiracy, and product liability. In general, the cases filed to date are being treated much like any other gasoline spill; however, certain properties of MTBE make it more difficult to contain and clean up. The impact of remediation costs is slowly but surely beginning to be felt.

MTBE concerns can be complicated by state environmental laws, which impose strict liability on owners and operators and, in some states (such as Pennsylvania), create a rebuttable presumption that the tank owner/operator is liable without proof of fault, negligence, or causation. While the courts have not yet addressed the question, it is likely that because MTBE moves so rapidly, disputes concerning the origin of the contamination will likely arise when multiple tanks are in close proximity to each other.

The potential costs of MTBE contamination can be illustrated by a California case where litigation was initiated by the City of Morro Bay, located in the Second Appellate District, against Shell Oil Company following the detection of gasoline in the city sewer system in March 1999. The source of the contamination was leaking USTs at a gasoline service station. The station's tanks and pumps were equipped with leak detection alarms, but employees testified that attendants had turned off the detector as many as 48 times during a six-month period. As reported by the San Luis Obispo Tribune News, Shell ultimately agreed to a settlement with the city whereby Shell would provide an interim source of drinking water costing up to $1.6 million, pay all attorneys' costs and fees, pay for emergency repairs to the sewer main, conduct tests to prevent any future leaks, take the appropriate steps to prevent contamination of the town's wells, and expedite cleanup of the site. In total, the cleanup could cost Chevron in excess of $2.3 million. Additionally, the city reserved the right to sue Shell if the wells become contaminated with MTBE.

More recently, in July, 2001, in its suit against Exxon Mobile, Corp., the Plainview Water District, which provides drinking water for over 35,000 Long Island, New York residents, sought over $500 million in compensatory damages and $2 billion in punitive damage, to prevent the contamination of groundwater by MTBE. Currently, although MTBE levels have been found at 80 times the acceptable limit at a former Mobil service station nearly 450 feet from the water district's nearest well, no MTBE contamination has been found in the any of the district's 11 municipal drinking water wells. The superintendent of the of the Plainview Water District said, "Even though Plainview's drinking water is totally free of MTBE, we are filing suit to make certain that MTBE at the former gas station never contaminates our wells." (Plainview Old Bethpage Herald, 7/6/01). This case is still pending.

The earlier reported cases involving MTBE spills refer generally to the contamination in the same manner as any other petroleum spill. In some cases, the presence of MTBE serves only to distinguish who is the responsible party. See, e.g., Aviation Oil Co. v. Department of Environmental Protection, 584 A.2d 611 (Me. 1990), and Damon v. Sun Co., 87 F.3d 1467 (1st Cir. 1996).

Suits have also taken the form of product liability claims, such as England v. Atlantic Richfield Co., Ill. Cir. Ct. Madison Cty., No. 00 L 331, April 11, 2000. In England, ten major petroleum companies were accused of "knowingly generating a national epidemic of groundwater contamination by producing and marketing" MTBE. The plaintiffs claimed that the "[d]efendants have known of MTBE's chemical characteristics that make it virtually certain that if MTBE were released into the environment it would contaminate sources of drinking water to a greater degree than other gasoline constituents." Id. The action was removed to federal court shortly after it was filed and was later consolidated with similar actions from other districts by the Judicial Panel on Multidistrict Litigation. No outcome has been reported to date.

On July 10, 2001, the District Court of New Jersey granted a Motion for Summary Judgment brought by Chevron U.S.A., et al. where the plaintiffs, Holten, et al., claimed that they suffered damages to their property and drinking water as a result of MTBE contamination from a nearby gas station. The plaintiffs' claims included counts for negligence, strict liability, negligent infliction of emotional distress and fear of future injury and quality of life damages. In addressing the strict liability claim, the court found that the doctrine of federal preemption applied. In accordance with this doctrine, the court concluded that because federal law required the defendants to use some type of oxygenate and specifically designated MTBE as one of the most commonly used and most effective, gasoline containing MTBE cannot be a defective product. Therefore, the court dismissed the plaintiffs cause of action for strict liability. While this case does to some extent set an important precedent, this court recognized that plaintiffs who can show that the defendant was responsible for the contamination will not necessarily be cut off from recovery.

In January, 2000, the Eighth Circuit acknowledged that parties who are responsible for MTBE contamination will be liable for the resulting property damage. That court affirmed the settlement of a class action suit where property owners brought suit against Amoco Oil Company when residents discovered MTBE contamination from UST leaks. Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999). The terms of the settlement included payments for lost value and damage to property for more than 500 class members, with a "special circumstances" fund available for other class members who were previously unable to demonstrate damage to their properties.

Last year, in Pennsylvania, a suit filed in a County Court sought to establish two classes of plaintiffs under the Pennsylvania Storage Tank Spill and Prevention Act, which would include all residents within 2500 feet of tanks owned and operated by Exxon Mobil, Tosco Corp., and Circle K. The complaint also alleged that the defendants conducted an "ultrahazardous and abnormally dangerous activity by the storage of gasoline and gasoline products." The plaintiffs sought more than $50,000 in damages and costs including future medical expenses after MTBE was found in their water supply. Anders v. Exxon Mobil Corp., No. 20006893-25-2, Pa.Comm.Pls., Bucks Co., 2000. Currently, this case does not have a reported result.

Just this year, a Massachusetts town filed a complaint against three oil companies - Mobil, Atlantic Richfield, and Shell - claiming that the companies had contaminated their well water with MTBE as a result of leaking USTs. Sturbridge v. Mobil Oil Corp., Mass. Dist. Ct., Worcester Cty., No. 4:01 CV40019, Feb. 6, 2001. The plaintiffs are seeking recovery for attorneys' fees in the amount of $20,000, the installation of a water treatment system with an initial cost of $100,000 plus $50,000 per year thereafter for operation, and the development of an alternative water source, which could cost approximately $150,000.

Not all plaintiffs have had success with class action lawsuits. Members of a proposed class in New Haven, Connecticut that sought nearly $40 million in damages, including future medical costs, were denied class certification because they "submitted no evidence to support their claim that the class is sufficiently numerous, nor have they provided a reasonable estimate of the class members." The judge concluded that "individualized proof" of whether the MTBE reached each class member's property would be necessary. The plaintiffs had attempted to argue that MTBE is a probable carcinogen and that its consumption at any level is unsafe. Martin v. Shell Oil Co., 198 F.R.D. 580 (D.Conn. 2000).

Although the EPA has stated that it is unlikely that MTBE is a carcinogen, the fact remains that its health effects are uncertain, and plaintiffs are including future medical costs with claims for damages in the suits being brought. In addition to medical costs, punitive damages are also possible. In Timely Adventures v. Coastal Mart, Inc., 7/12/00, a jury in a state district court in Texas awarded $100 million in compensatory and punitive damages to plaintiffs whose properties were located near Coastal Mart property where a petroleum leak from USTs occurred. (Mealy's Litigation Report, 11/10/00). The jury made the award for diminution of property value, as well as punitive damages, when it found gross negligence, nuisance, and trespass. Coastal Mart was also ordered to remove the contamination from the soil by July 2, 2003.

Practical Remediation Technologies - Addressing the MTBE Myths
Treatment of MTBE-contaminated soils and groundwater is proving difficult because of the chemical's unique physical properties. MTBE has relatively low adsorption; once spilled on the ground, the compound moves through the soil column very quickly. MTBE is also relatively soluble in water. In fact, it is nearly miscible; i.e., it has a very low Henry's law constant (the chemical does not easily volatilize) when compared to other fuel compounds (benzene, toluene, ethylbenzene, and xylene (BTEX)).

Several misconceptions and myths have developed that have fueled the plaintiff bar's engine. A common misconception, for example, is that MTBE does not naturally degrade. In fact, MTBE does naturally degrade, albeit at a considerably slower rate than other fuel components.

Another myth is that MTBE cannot be remediated. MTBE has actually been shown to respond similarly to many of the well-known hydrocarbon remediation techniques. Groundwater contaminated with MTBE can be managed by traditional approaches. Remediation technologies for MTBE-affected soils do not differ significantly relative to technologies for remediation of other fuel constituents released at petroleum-impacted sites. Soil vapor extraction systems, air sparging (sprinkling), and traditional excavation and disposal technologies are commonly employed. In addition, innovative treatment technologies for MTBE-affected soils are under development. One recently patented system includes injecting butane into a contaminated soil area using a specially designed delivery system to enhance bioremediation. Another system using a liquid microbial solution consists of multiple injections of microbes, oxygen emulsifiers, surfactants, encapsulants, and nutrients; this system resulted in a decrease in MTBE concentrations by more than 90 percent over a short period at the tested site. Oxygen release compounds (ORCs) that can be used for MTBE remediation in soils show considerable promise.

In the case of groundwater, "pump and treat" is generally regarded as the only proven method for remediating MTBE-impacted aquifers. Conventional, aboveground water treatment technologies are considerably less effective for MTBE than for other fuel-related compounds. Air stripping, adsorption, and oxidation are commonly used, but each technology presents unique treatment challenges; consequently, alternative treatment technology options for MTBE remediation in groundwater are now being explored. Pilot-scale demonstrations of MTBE remediation using microbes in the subsurface have shown some success. As is the case for soils, the use of ORCs for in situ groundwater remediation is being aggressively pursued by numerous remediation contractors.

The magnitude and frequency of MTBE contamination in soil and groundwater, particularly in EPA-designated air non-attainment areas, have resulted in contractors undertaking aggressive studies focused on cost-effective MTBE remediation strategies. While traditional remediation technologies are useful, innovative treatment strategies may ultimately prove to be most cost-effective. Regulatory issues (e.g., permitting and licensing) surrounding the application of some of the more innovative MTBE treatment technologies may, in some respects, become more problematic as the level of technical sophistication increases. Nevertheless, the importance of developing cost-effective remediation strategies for MTBE contamination should result in rapid resolution of these regulatory costs.

Good Science Equals Favorable Regulatory and Litigation Outcomes
The fundamental question is whether sound science can survive the hysteria over MTBE contamination and resolve the perceived health effects raised by the media and the plaintiffs' bar. The best defense is a well prepared and comprehensive plan that addresses prevention and mitigation efforts. The plan should emphasize the need for quick responses to MTBE releases, simultaneously with a thorough investigation of all possible sources. Although the race has only begun, the following advice may be useful in dealing with this issue in the context of both the regulatory and litigation fronts.

Develop a comprehensive site-specific response plan. A workable and reliable response plan is critical to minimizing governmental and third-party actions. In general, the state agency must be notified within 30 days, but if the results of the leak detection program indicate a possible leak, the state must be notified within 24 hours. In addition, MTBE mobility characteristics require prompt action to contain the release on the site property to avoid off-site migration; this approach should decrease the likelihood of governmental penalties and adjacent property owner lawsuits.

Therefore, a successful response plan must be site-specific. This means that the plan must take into account the site geology, hydrogeology (i.e., presence of natural groundwater barriers such as clay subsurface and groundwater divide in the substrata), existing on-site groundwater monitoring wells, and related site features. Critically important to off-site migration is the full delineation of all off-site water supply receptors, from residential wells to large commercial/industrial wells for consumptive or agricultural purposes. For example, most state and federal spill prevention and contingency plans for larger tank farms and industrial facilities require identification and, in time of emergency, notification of downstream water users, including private and public water companies. Early notification of downstream water intake locations along adjacent water bodies is critical to prevent major class action lawsuits.

Fully identify possible alternative sources of contamination. Given the mobility and solubility of MTBE, the need to know your neighbors is paramount. Federal and state UST registries are readily available to help identify all registered tanks. Unregistered or unregulated tanks must be identified by a more thorough investigation of adjacent property owner records. This second-tiered search may be conducted through title searches, review of state and local agency files, and other available databases.

Minimize state regulatory action and citizen suits by entering into state remediation agreements for on-site activities. In certain cases, remediating parties should consider entering into remediation agreements with the state regulatory agency. Where remediation activities can be implemented at the property and avoid any contamination from migrating off-site, these agreements may be extremely beneficial. The state has thus bought into the remedy and, under many state brownfield laws (which encourage land recycling), may invoke a liability release or covenant not to sue that bars certain citizen suits based on state environmental causes of action. Moreover, securing state endorsement of the remediation can provide extremely persuasive evidence in any subsequent third-party suit grounded in common law or federal environmental claims.

Select a knowledgeable consultant for remediation and litigation. Quick and decisive action to contain, characterize, and remediate MTBE contamination is essential. Competent consultants with specialized background and experience in MTBE contamination cases should be retained wherever possible. This will limit liability and also demonstrate good faith, reducing the likelihood of civil penalties and punitive damages. Although this recommendation seems intuitively obvious, the critical review of the experts' past successes in MTBE remediation is vital to the development of an appropriately tailored remediation response. Does the consultant have MTBE experience at similar sites (i.e., with similar hydrogeologic formations, proximity to off-site receptors, and major water bodies)? Because a careful evaluation is usually not available in times of emergency, a short list of consultants, periodically updated, should be maintained.

Keep MTBE research current. While existing research indicates that exposure to MTBE does not cause cancer, plaintiffs will continue to push the limits of the admissibility of expert testimony in attempts to get the question into the hands of juries. Attorneys involved in MTBE cases must stay current on the status of both legal and technical research in this area, and ensure that questionable scientific studies and speculative opinion testimony are vigorously and competently opposed as inadmissible under the applicable principles of evidence law. In this connection, defense counsel should consider allocating considerable resources to prevail in a Daubert-type hearing, where the admissibility question may be decided.

At this stage of the MTBE debate, good housekeeping practices will eliminate much of the trouble and resulting litigation spawned by MTBE. Documented remediation technologies have proven successful; more important, however, is timely response and knowledge of the geology and hydrogeology. These are critical elements in mitigating the spread of groundwater contamination and the resulting off-site property owner damage cases. The old adage "the best defense is a strong offense" rings true in MTBE cases.

Republished with the permission of Defense Research Institute.