MTBE Lawsuit Can Go Forward

An Orange County judge dismissed on Friday several oil companies’ attempts to kill a landmark MTBE lawsuit that could result in liability for more than $200 million in cleanup costs.

Santa Monica sued seven major oil companies and 11 other firms in 2000 for tainting much of its drinking water with MTBE, a probable carcinogen that is added to gasoline to make it burn cleaner.

In a recent series of motions, Shell Oil Co., Arco and others have argued that the statute of limitations ran out because the contamination was discovered in 1995.

In dismissing the motions, Superior Court Judge Stephen J. Sundvold wrote, “MTBE is alleged to still be leaking into the water system. The statute of limitations has not run with respect to these acts.”

He also is allowing the city to seek triple punitive damages under a civil code that allows water utilities to seek such compensation if its water is tampered with.

The amount of punitive damages has not yet been determined, said Joe Lawrence, assistant city attorney.

“For the people of Santa Monica, [the decision] means they’re going to be made whole and eventually the water is going to be cleaned up,” Lawrence said.

Attempts to reach officials at the oil companies Friday were unsuccessful.

MTBE, or methyl tertiary butyl ether, was first added to gasoline more than two decades ago to reduce air pollution, and its use became widespread in the early 1990s.

Further study found that MTBE is a suspected carcinogen that spreads quickly through the soil and ground water, and that even in small amounts it can make drinking water smell like turpentine.

In 1996, MTBE contamination shut down seven of Santa Monica’s 11 drinking-water wells. The city and the oil companies tried to reach an agreement, but it fell through in January 2000. The city sued five months later.

In the meantime, the companies are paying the city $3.5 million a year to import water in compensation for the lost wells. More than $75 million has been spent on cleanup and litigation, and the final number will probably top $200 million, according to the U.S. Environmental Protection Agency.

Santa Monica’s is among the most high-profile cases of MTBE contamination in the country. Cleanup nationwide is expected to cost at least $29 billion, according to a study commissioned by Santa Monica and several other cities.

Sundvold’s ruling comes on the heels of Gov. Gray Davis’ announcement that he is delaying the phaseout of MTBE for a year. He has said the delay will allow a more orderly transition to another additive--ethanol--and protect California drivers from gas shortages and price spikes.