Mayors, elected leaders, water utilities challenge latest house offer on MTBE liability waiver

Several organizations on Friday challenged the latest offer by House energy bill conferees to provide product liability immunity (safe harbor) to producers of gasoline with methyl tertiary butyl ether (MTBE).


Washington, D.C., Oct. 17, 2003 -- Friday, organizations representing mayors, local elected leaders and drinking water providers challenged the latest offer by House energy bill conferees to provide product liability immunity (safe harbor) to producers of gasoline with methyl tertiary butyl ether (MTBE).

In a letter today to the 45 Senate Republicans and Democrats who recently wrote in opposition to the provisions, the organizations noted that "the House's MTBE safe harbor provisions proposed in conference have gone from bad to worse."

"Remarkably, MTBE producers have convinced House leaders to change the effective date of the provisions from the date of enactment to a retroactive date of October 1, 2003," said Diane VanDe Hei, executive director of the Association of Metropolitan Water Agencies. "This will block dozens of legitimate suits filed in recent weeks, forcing cleanup costs onto consumers."

In addition, the proposed revision narrows the scope of negligence only to spills, effectively eliminating suits against gasoline producers under other negligence grounds. The liability grounds allowed in the "safe harbor" provision would not apply to the producers of gasoline containing MTBE and would shift the liability burden to gas station owners and distributors who were not responsible for making MTBE or adding it to gasoline.

"The MTBE provision is bad public policy and will ultimately harm the American people," said Jack Hoffbuhr, executive director of the American Water Works Association. "It is impossible to fully measure the harm this arbitrary "safe harbor" shield will cause local governments already struggling under tight budgets and limited resources."

MTBE producers claim that the federal government mandated the use of MTBE. This is just plain false, according to Steve Hall, executive director of the Association of California Water Agencies. "MTBE was never mandated, and a court has found that the MTBE producers knew of its environmental dangers long before they started marketing it widely."

Thousands of sources of water have been contaminated across the United States, and spreading MTBE contamination will cause more and more wells to be shut down, according to the letter from the organizations.

MTBE cleanup costs range from a few million dollars to more than $200 million per utility, and the MTBE producers and some in Congress say that the federal government's Leaking Underground Storage Tank (LUST) trust fund should cover these costs. The drinking water associations disagree.

"The LUST Trust Fund is too poorly allocated and structured to resolve the wide-spread MTBE contamination found across the United States and only applies to leaking underground storage tanks," according to the letter.

The 45 senators who signed a joint letter opposing the safe harbor provisions or who wrote their own opposition letter are Sens. Akaka, Baucus, Bayh, Biden, Bingaman, Boxer, Cantwell, Carper, Chafee, Clinton, Collins, Corzine, Daschle, Dayton, Dodd, Durbin, Edwards, Feingold, Feinstein, Gregg, Harkin, Hollings, Inouye, Jeffords, Johnson, Kennedy, Kerry, Kohl, Lautenberg, Leahy, Levin, Lieberman, McCain, Mikulski, Murray, Ben Nelson, Bill Nelson, Reed, Reid, Sarbanes, Schumer, G. Smith, Snowe, Stabenow and Wyden,

The text of the letter follows:

National League of Cities
The U.S. Conference of Mayors
Association of Metropolitan Water Agencies
American Water Works Association
Association of California Water Agencies
National Association of Water Companies
National Rural Water Association

October 17, 2003

Subject: Mayors, Local Elected Leaders, Water Utilities Oppose
Latest House Offer on MTBE Liability

Dear Senator Daschle:

Thank you for your recent letter opposing provisions in the House version of H.R. 6 that would provide defective product liability immunity ("safe harbor") to producers of gasoline with methyl tertiary butyl ether (MTBE). We appreciate your position that Congress not let polluters off the hook for MTBE cleanup.

Unfortunately, since your letter, the House's MTBE safe harbor provisions proposed in conference have gone from bad to worse. Not only would the House provisions block utilities' attempt to recoup cleanup costs based on a defective product liability but MTBE producers have convinced House leaders to change the effective date of the provisions from the date of enactment to a retroactive date of October 1, 2003. This would cause dozens of suits filed in the last few weeks to be thrown out, leaving many local governments and water systems to pick up the tab for cleanup. Further, the proposed revision narrows the scope of negligence only to spills, effectively eliminating suits against gasoline producers under other negligence grounds. The liability grounds allowed in the revision would not apply to the producers of gasoline containing MTBE and would shift the liability burden to gasoline distributors and station owners who were not responsible for making MTBE or adding it to gasoline.

Here are some other points to remember in this debate:

1. MTBE was never mandated, and a court has found the MTBE producers knew of its environmental dangers long before they started marketing it widely.

2. MTBE cleanup costs range from a few million dollars to more than $200 million per utility.

3. Thousands of sources of water have been contaminated across the United States, and spreading MTBE contamination will cause more and more wells to be shut down.

4. The LUST Trust Fund is too poorly allocated and structured to resolve the wide-spread MTBE contamination found across the United States and only applies to leaking underground storage tanks.

This is bad public policy and it harms the American people. Please do not allow H.R. 6 to be enacted with product liability immunity for producers of gasoline with MTBE.


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