MTBE contamination lawsuits over for City Hall
The multi-year and multi-million dollar legal battle over Santa Monica’s contaminated drinking water is coming to a close now that the last oil company has agreed to pay City Hall $3.55 million.
Lyondell Chemical Co., a manufacturer of MTBE, which contaminated the city’s drinking water in 1996, was the last defendant to settle litigation levied by City Hall in 2000. The City Council officially accepted the settlement on Tuesday, with Councilman Bob Holbrook recusing himself because his family owns stock in the oil company.
City Hall sued 18 oil companies that were responsible for contaminating Santa Monica’s drinking water wells. With Lyondell’s settlement, more than $120 million will be paid to City Hall by the oil companies for allowing MTBE, a gasoline additive, to seep into several of the city’s wells. Methyl Tertiary-Butyl Ether cleans emissions, but is toxic if ingested.
“This will bring to conclusion the lawsuits brought by the city against the companies,” said Assistant City Attorney Joe Lawrence. “This is the last remaining company.”
Since the lawsuits were levied, money has been trickling in by the oil companies. In March, WinAll Oil Co. settled for $350,000. Three oil companies — Shell, ChevronTexaco and ExxonMobil — agreed last year to pay whatever it takes to clean up the contamination, which was caused when underground storage tanks leaked gas into the ground water. The companies also agreed to pay City Hall $92.5 million in cash.
A new treatment facility is planned to be built specifically to clean up the city’s water at the Charnock Well Field in West LA, the city’s main water source.
The settlement by Shell, ChevronTexaco and ExxonMobil, ensures that the oil companies will pay for all costs to construct, operate and maintain the treatment plant, which officials expect will clean the city’s water supply by 2008. Costs could exceed several hundred million dollars. The cash settlements will be used to cover out-of-pocket costs, and other city needs, like continued water quality improvements and water security.
The City Council on Tuesday also agreed to pay Southern California Water Co. $5.6 million as a settlement relating to the MTBE cases. Southern California Water Co. sued City Hall to determine who had water rights at the time of the contamination, Lawrence said. The oil companies used that lawsuit to slow down their court proceedings with City Hall, he added.
In order to move forward with its cases against the oil companies, City Hall had to resolve the lawsuit levied by Southern California Water Co. As a result, City Hall will purchase water rights in the Charnock basin from the Southern California Water Co. for $5.6 million. The money will come from the settlement payments made by the oil companies, Lawrence said.
Santa Monica’s crusade against MTBE set the stage for national efforts to clean up the additive. Though California took an aggressive stance against the additive and banned it this year, the Bush administration in February quietly shelved a proposal to ban MTBE in many communities, helping an industry that has donated more than $1 million to Republicans.
Originally published in the Santa Monica Daily Press print edition on April 29, 2004. Read the original PDF.