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Prepared Witness Testimony The House Committee on Energy and Commerce
Comprehensive National Energy Policy
Subcommittee on Energy and Air Quality
Mr. Erik Olson
MTBE and reformulated
gasoline probably have contributed to reductions in air emissions. However,
MTBE is extremely soluble in water, persistent, and smells and tastes foul. It
renders water containing fairly low levels (about 20-40 parts per billion
according to EPA) unusable for drinking, because the public refuses to consume
or use it. There also are potential health concerns with MTBE, including
possible carcinogenicity and other toxicity issues. Moreover, it is nearly
impossible, and very expensive, to remove MTBE from water supplies once they
become contaminated. Because of its
properties, MTBE has caused widespread contamination of water across the
country. USGS data show about 3% of wells, 5% of surface waters, and 9% of
drinking water supplies have detectable MTBE. In the Northeast, about 14% of
drinking water supplies contain MTBE. Large numbers of underground storage
tank leaks, spills, and other sources have lead to releases of MTBE-containing
fuel, and MTBE migrates in the environment very quickly. Most MTBE
contamination to date apparently is below EPA's 20 ppb advisory level, but
many contamination incidents above this level have been reported. A map of
MTBE contamination incidents is included in this testimony. It has been argued that
the oil industry was "forced" to use MTBE as part of the 1990 Clean Air
Act's oxygenate mandate, and that therefore the industry should not be held
responsible for the widespread water contamination. However, this is a
distortion of the truth. Neither EPA nor Congress ever mandated that industry
use MTBE. Elements of the petroleum industry urged the use of MTBE as an
oxygenate. Moreover, internal industry documents that were not released to the
public until litigation recently pried them loose show an entirely different
story. The industry knew at least in the early 1980s that MTBE was highly
mobile, highly water soluble, highly persistent, and could render water
unusable at low levels of contamination. Moreover, the industry was aware that
many of its tanks were leaking fuel, often including MTBE. A court recently
held major oil companies responsible for acting "with malice" in failing
to warn the public about MTBE. We support legislation
that would phase out MTBE and would eliminate the 2% oxygenate requirement,
while maintaining air quality benefits. We do not favor an ethanol mandate.
The "deal" that was struck previously in the Senate was marred by a
deal-breaker amendment that preempted both state and federal liability for oil
company contamination of water supplies by "renewable fuels." This was
expanded in a House counter offer to include MTBE. We strongly oppose any
provision that would eliminate any legal tools available to local governments,
water suppliers, or others harmed by contamination of water supplies. Industry
knew about MTBE problems and could have controlled them, and must have the
incentive to minimize and address the impacts of new fuels and additives Finally, there is a
related issue involving potential groundwater contamination with MTBE and
other toxic materials that may arise in the energy bill. Hydraulic fracturing
is a process of injecting fluids under high pressure, sometimes containing
MTBE, diesel fuel, or other toxins, to fracture underground formations to
remove natural gas. A court has ruled that HF must be regulated under the Safe
Drinking Water Act, and the Congressionally-chartered National Drinking Water
Advisory Council has recommended that EPA retain its authority to regulate
this potentially harmful practice. Congress should not impede this current EPA
authority. Introduction Good
Morning Mr. Chairman and Members of the Subcommittee, I am Erik D. Olson, a
Senior Attorney at the Natural Resources Defense Council (NRDC), a national
non-profit organization with over 500,000 members dedicated to the protection
of public health and the environment. I also serve as chair of the Campaign
for Safe and Affordable Drinking Water, an alliance of over 300 public health,
medical, consumer, environmental, and other organizations seeking to assure
safe drinking water at a reasonable price to all Americans, though today I do
not appear on behalf of the Campaign. Part
1 of this testimony focuses primarily on MTBE. Part 2 briefly notes another
important water issue likely to be addressed in the energy legislation, the
use of hydraulic fracturing in oil and gas activities, which may harm water
supplies. Part 3 highlights what the oil industry knew about MTBE problems,
and when they knew about them, and was written by the Environmental Working
Group, which authored the report summarized in that section, and joins in this
testimony. We
appreciate the opportunity to testify today. We have found it difficult,
however, to testify on legislation whose full text we have not seen. In this
testimony, with respect to certain issues we are essentially "reading the
tea leaves" from last year's introduced and passed bills, the House offer
to the Senate conferees, and frankly we are guessing as to what the House
energy bill may say. We therefore respectfully request that we be provided an
opportunity to testify again when the bill has been introduced. PART 1. MTBE: WATER QUALITY CONCERNS, AND THE NEED FOR FEDERAL LEGISLATION Why MTBE? Because
of serious air pollution triggering smog alerts in many "non-attainment"
areas around the nation, EPA began investigating changes in fuel supplies that
could result in air quality improvements. For many years EPA was investigating
the possible widespread use of methanol (a chemical cousin of ethanol) as a
fuel. The petroleum industry, on the other hand, had another idea:
reformulated gasoline that was produced from a byproduct fraction of petroleum
cracking that for years had little market, called methyl tert-butyl
ether (MTBE). MTBE could be used as an "oxygenate," elements of the
petroleum industry argued, and would reduce carbon monoxide emissions and
ozone levels in the atmosphere, leading to air quality benefits. 1990 Clean Air Act Amendments In
enacting the Clean Air Act Amendments (CAA) of 1990, Congress required the use
of oxygenates in gas, in order to improve air quality. The use of oxygenates
makes gas burn cleaner. The oxygenate requirement also was enacted in part
because Congress hoped to give a big boost to the ethanol industry,
which can use distilled "biomass" to make this alcohol. Instead of
switching mostly to ethanol, the petroleum industry chose to use MTBE as the
oxygenate of choice. MTBE use skyrocketed (see figure 1). By 1998, MTBE became
"the second most-produced organic chemical in the U.S.," with about 10
million gallons used per day.[i]
EPA Blue Ribbon Panel on MTBE EPA's
Blue Ribbon Panel on MTBE concluded that the Reformulated
Gasoline Program (RFG) established in the Clean Air Act Amendments of 1990
"has provided substantial reductions in the emissions of a number of air
pollutants from motor vehicles.." The reductions were greater, in fact,
than legally required. The panel also noted that "there
is disagreement about the precise role of oxygenates [such as MTBE] in
attaining the RFG air quality benefits," though oxygenated fuels did, the
panel concluded, probably reduce emissions. But in large because of the water
quality problems caused by MTBE, the panel recommended:
FIGURE 1: U.S.
MTBE USE (gal/day) Serious Concerns about Water Quality While MTBE may have contributed to improved air
quality in some communities, the bad news is that MTBE is extremely soluble in
water, far more soluble than hydrocarbon components such as benzene, toluene,
and xylene (see Figure 2). Industry Knew Long
Before 1990 CAA Amendments MTBE Was a Problem As discussed at length in Part 3 in this testimony, internal oil industry documents that were only released in litigation show that the oil industry well aware of MTBE's water-contaminating properties before the 1990 Clean Air Act Amendments. These documents also show that the industry was aware that spills or leaks containing MTBE spread very fast, and were extremely difficult and expensive to clean up. Indeed, by 1981, a Shell scientist wrote an internal report on an MTBE contamination problem and the difficulties of cleanup. The joke inside Shell was that MTBE really stood for "Most Things Biodegrade Easier;" later, other versions of the joke circulated, including "Menace Threatening Our Bountiful Environment," or "Major Threat to Better Earnings." (Attachment 5) These and many other facts, documents, and
testimony were considered by the jury that found that there was "clear and
convincing evidence" in the South Tahoe case that Shell Oil and Lyondell
Chemical Company (ARCO chemical Company) acted "with malice" in selling
gasoline containing MTBE both because it was "defective in design" because
the risks of harm outweighed its benefits, and because of their failure to
disclose the threats posed by MTBE.[ii]
Several other oil company defendants opted to settle the case before these
findings were rendered. Other MTBE Chemical
Cousins May Also Present Problems Other ethers being considered as gasoline additives, such as ethyl-tert-butyl ether (ETBE), tert-amyl methyl ether (TAME), and di-isoproyl ether (DIPE) also are extremely soluble, like MTBE. (Figure 2). The high solubility of MTBE has lead to widespread contamination of groundwater and surface waters across the nation. 
Figure2: Solubility of Hyrdocarbon Compounds Vs. MTBE and Other Ethers Source: NRDC, Based on API Data Widespread MTBE
Contamination of Water According
to estimates from U.S. Geological Survey (USGS) experts, there may be 250,000
leaking underground storage tank (LUST) releases of MTBE.[iii] Pipeline releases, gas spills, and other sources also contaminate
groundwater and surface water with MTBE. USGS estimates that about 35% of
community water system wells are located within 1 km of a LUST (9000 wells).[iv]
USGS data indicates that about 3% of groundwater wells in the U.S. contain
MTBE, and about 5% of surface waters contain MTBE (FIGURE 3).[v]
Testing also indicates that MTBE is often found in tap water-about 9% of
water supplies tested.[vi] According to USGS testing,
about 15% of drinking water in the Northeast contained MTBE.[vii]
Most is found at relatively low levels; about 1% exceed the low end of EPA's
advisory level (20 ppb), with1% over the low end of EPA's advisory level.[viii] FIGURE 3
USGS DETECTIONS OF MTBE
(Source: Moran & Zogorski, Pers. Comm. 2003) 
FREQUENCY OF DETECTION OF MTBE
(Source: Moran & Zogorski, Pers. Comm., 2003) Health Concerns With MTBE MTBE
contamination of drinking water poses health concerns, but as is usually true
with chemical contaminants, there remains some uncertainty as to how serious
these risks are. EPA has found that MTBE may be a carcinogen, but has not
reached a final verdict on the issue. There have been reports of acute
human-health effects of MTBE such as nausea, dizziness, and headaches by
people exposed to MTBE-containing fuel vapors in air, though some argue that
these symptoms have not been clearly linked to MTBE exposure.[ix]
The human-health effects of long-term inhalation or oral exposures to MTBE are
unknown.[x]
However, there is some evidence of possible reproductive and
developmental effects.[xi] There
are no published studies evaluating MTBE and cancer in humans, but MTBE has
been shown to cause cancer in rats and mice exposed by inhalation or orally.[xii]
Federal agency reports indicate that MTBE should be regarded as posing
a potential cancer risk to people based on animal cancer data.[xiii] Although EPA has
concluded that "MTBE poses a potential for human carcinogenicity at high
doses" based on animal data, EPA says that these animal data "do not
support confident, quantitative estimation of risk at low exposure"[xiv] EPA has based its
Drinking Water Advisory upon taste and odor thresholds (20 to 40 µg/L) in
humans, and has not yet established any enforceable health standard for MTBE.[xv]
Consumer
rejection due to taste and odor of MTBE often has been a factor in water
utility decisions to stop using or to treat water sources contaminated with
MTBE. State Actions Banning or
Restricting MTBE In
response to widespread concerns about MTBE contamination, at least 17 States
have adopted bans or serious restrictions on MTBE usage, and two have required
intensive studies of MTBE contamination (Attachment 1). Need for federal Legislation There is an urgent need for federal
legislation that would:
No Waiver or Preemption of State or Other Liability for Fuel Contamination Our
most overwhelming concern is that the legislation should not include
any waiver or preemption of state or other liability for renewable fuels or
MTBE. Introduced legislation (Rep. Peterson's H.R. 837 and Sen. Daschle's
S. 385) include a so-called "safe harbor" provision that would preempt
state law and effectively remove tools available to states and municipalities
to remedy tap water contamination problems from fuel containing "renewable
fuels." The provision would block lawsuits alleging that gasoline is a
defective in design or manufacture because it contains such renewable fuels. A
similar Senate measure last year was answered by a House conferees' offer
that would have expanded this waiver of liability and preemption to MTBE. Such
a waiver of liability and preemption of State law is an unacceptable overreach
that will hurt the public, local governments, the environment, and will
encourage irresponsible corporate behavior. As the South Tahoe jury found
after an extensive trial and review of an enormous number of industry
documents and witnesses, many in the oil industry knew of the risks of MTBE,
and irresponsibly failed to act or to warn the public or their customers. Well
before Congress enacted the 1990 CAA, the oil industry was aware of the risks
posed by MTBE to water supplies, of the difficulty of cleaning up spills and
leaks, of the persistence of MTBE, and of the fact that many oil storage tanks
were leaking. Elements of the oil industry knew of problems a long time ago,
and according to the California jury, acted "with malice" in failing to
disclose these risks. (Attachment 4). (Adobe PDF) As between this highly culpable oil
industry that knew about the problem, failed to remedy it, and profited from
the sale of their defective product, and the public water supplies that had
nothing to do with creating the problem, and would have to bill their
customers to remedy it, who should pay for the cleanup? Clearly, the oil industry should not be let off the hook for this
liability. Why deny an important tool to local government and water utilities
to address this important drinking water quality and potential health problem? A
liability waiver and preemption also would create unacceptable incentives for
manufacturers to introduce defective products. What will be the next MTBE?
TAME? DIPE? ETBE? Why do the renewable fuels manufacturers need such
liability protection? Do they know of problems with their products that they
are not telling Congress or us about, much like the oil industry was not very
forthcoming about the problems with MTBE before it came into such widespread
use? The
petroleum industry is clearly in best position to know about and to take
action to avoid another MTBE. Industry must have the incentive to minimize the
impacts of new fuel additives or new fuels. Last year, there was a strong alliance behind a sensible solution to
the MTBE and oxygenate problem, which included API. The liability waiver and
preemption was added after that deal was cut, and is a deal breaker. We oppose
the safe harbor provision in the bill offered by Senator Daschle (S. 385) and
others this year in the Senate, and we would oppose any legislation that
contains the provision as part of the energy bill. PART
2 THE
NEED TO REGULATE HYDRAULIC FRACTURING TO PROTECT UNDERGROUND SOURCES OF
DRINKING WATER There
is another threat to drinking water and ground water by chemicals also used in
gasoline and diesel fuel that is worthy of discussion and protective action by
Congress. Hydraulic fracturing is
a well development process that is designed to increase the yield of natural
gas from underground rock formations, including coal. Fluid is injected down a well and into a rock formation at very high
pressure in order to break up the rock formation and enable more gas to flow
toward the well after all the groundwater has been removed. Hydraulic
fracturing fluid commonly contains many toxic chemicals that pose a
significant threat to underground sources of drinking water. The carcinogen benzene, and MTBE, diesel fuel, and many other chemicals
are known to be used in hydraulic fracturing fluids. It is well known that very small volumes of potent chemicals like
benzene and MTBE can contaminate millions of liters of ground water. In recent years, that has been painfully obvious as MTBE contaminated
ground water and surface water across the country. Just 28 tablespoons of MTBE could contaminate millions of liters of
ground water at concentrations that would render it unusable.[xvi]
It is important to note that the large number of coal bed methane
wells planned in the US are of particular concern because their depths are
relatively shallow and 10 of the 11 coal basins in the US are likely to lie,
at least in part within existing underground sources of drinking water.[xvii]
A
draft report by EPA reveals that many of the estimated concentrations of
chemicals used in hydraulic fracturing fluids at the edge of the fracturing
zone exceed the drinking water maximum contaminant levels (MCL) - even with
an estimated dilution effect of 30.[xviii]
The EPA report reveals that the estimated concentration of the
carcinogen benzene is twice the drinking water MCL. The estimated concentrations of other chemicals exceed their MCLs by
much greater factors - 431 times the MCL in the case of methanol.[xix] There
are a very limited number of empirical scientific studies that have evaluated
the behavior of these chemicals in the subsurface and their effects on
groundwater quality. The toxic
chemicals used in fracturing fluid can be continuous sources of ground water
contamination since, as the EPA report reveals, as much as 39-75% of
fracturing fluids remain in the ground.[xx]
After
briefing some staff from this committee last September, it was discovered that
EPA's calculations for estimated subsurface concentrations of chemicals of
concern were based on values that were not consistent with data in their
report that resulted in estimated concentrations 10 times lower.[xxi] [xxii]
A January 2003 article in Environmental Science & Technology
includes the suggestion by a USGS hydrologist that EPA's dilution factor of
30 is not justified and that even if "only 20-30% of the fracturing fluids
remain in the formation and the fluids include diesel fuel, the aquifer would
be destroyed because the diesel will remain as a contaminant for
generations." [xxiii] The
near-impossibility of cleaning up underground sources of drinking water once
they have become contaminated is precisely why Congress acted with precaution
to protect existing and future sources of drinking water in the Underground
Injection Control provisions of the Safe Drinking Water Act. Preventing widespread contamination of drinking water is far less
expensive than attempting to clean it up later. EPA's
Congressionally-chartered National Drinking Water Advisory Council, comprised
of representatives of the water industry, state and local governments, public
health experts, consumers, environmental groups, and others, unanimously
adopted a resolution December 12, 2002 urging the Administrator "to
work through voluntary and/or regulatory means as appropriate in order to
eliminate the use of diesel fuel and related additives in fracturing fluids
that are emplaced in geologic formations containing sources of drinking
water." (Attachment 2) (Adobe PDF). Furthermore,
the National Drinking Water Advisory Council
urged the
Administrator "to defend as necessary the US EPA's existing authority and
discretion to implement the Underground Injection Control Program in a manner
that advances the protection of our ground water resources from
contamination." Support for oversight of
state Underground Injection Control programs by EPA is growing in many states
as they face serious budget shortages.[xxiv] We
are very concerned about Section 2201 of the legislation filed by Congressman
Barton that addresses hydraulic fracturing. EPA should not finalize its report entitled "Evaluation of Impacts to
Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed
Methane Reservoirs" until meaningful field investigation has been
accomplished that includes collection and analysis of groundwater samples and
installation of monitoring wells. In
addition, EPA must retain its authority to oversee state regulation of
hydraulic fracturing through the Underground Injection Control program to
prevent contamination of underground sources of drinking water - consistent
with Congress' intentional precautionary action via the Safe Drinking Water
Act. PART
3: MTBE: WHAT THE OIL COMPANIES KNEW AND WHEN THEY KNEW IT Internal
Industry Documents Are Rewriting The MTBE Pollution Story In
2002, the Environmental Working Group released a report summarizing a series of
internal oil industry documents that highlight the true story about MTBE. That
report, available in full at www.ewg.org, is excerpted in this section of the
testimony (web links to electronic versions of the industry documents cited in
this testimony are included for readers of the electronic version of the
testimony; copies of some of the key documents are attached to the hard copy
version of the testimony). Congress
is considering legislation to strictly limit oil company liability for
contaminating groundwater in at least 35 states with MTBE. The industry says
it's only fair to shield MTBE makers from lawsuits, since, they claim, it was
the government that mandated oil companies to reformulate gas with MTBE in the
first place, to clean the air. But
a different story has emerged from internal industry documents and depositions,
made public in recent successful lawsuits brought by cities and Communities for
a Better Environment that want oil companies to pay to clean up water made
undrinkable and unhealthy by MTBE. The documents, provided to EWG by CBE's
lawyers Scott Summy and Celeste Evangelisti, show that the oil industry itself
lobbied hard for the MTBE mandate because they made the additive and stood to
profit. A top ARCO executive admitted under oath, "The EPA did not initiate
reformulated gasoline...." He clarified that "the oil industry... brought
this [MTBE] forward as an alternative to what the EPA had initially proposed."
(Attachment 3) (Adobe PDF) [Excerpt | Full document] By
1986, the oil industry was adding 54,000 barrels of MTBE to gasoline each day.
By 1991, one year before the EPA requirements went into effect, the industry was
using more than 100,000 barrels of MTBE per day in reformulated gasoline. Yet
secret oil company studies, conducted at least as early as 1980, showed the
industry knew that MTBE contaminated ground water in numerous locations where it
was used. Oil
companies are pressing Congress for liability protection because hundreds of
communities have serious MTBE contamination problems, and company documents are
coming back to haunt them in the courtroom. In April 2002, the documents
convinced a California jury to find Shell, Texaco, Tosco, Lyondell Chemical
(ARCO Chemical), and Equilon Enterprises liable for selling a defective product
(gasoline with MTBE) while failing to warn of its pollution hazard, forcing a
$60 million settlement with the water district for South Tahoe. (Attachment 4)
(Adobe PDF) [View document]. "The Government Made Us Do It" As
noted earlier in this testimony, MTBE is an "oxygenate" that makes gasoline
burn cleaner and more efficiently. Unfortunately, it is also a foul-tasting,
nasty-smelling, potential carcinogen that spreads rapidly when gasoline escapes
from leaky underground storage tanks, contaminating sources of groundwater and
drinking water from New York to California [View document]. Once in soil or
water, MTBE breaks down very slowly while it accelerates the spread of other
contaminants in gasoline, such as benzene, a known carcinogen. Some
communities, including Santa Monica and South Lake Tahoe, Calif., face tens or
hundreds of millions of dollars in costs of cleaning up MTBE or replacing
contaminated water supplies. At least 17 states already have passed measures to
ban or significantly limit the use of MTBE in gasoline; two more have required
intensive studies. We believe that a federal ban is more a question of when than
if. Pressure
is building to follow the lead of many states and ban MTBE nationally by the
year 2006. Members of Congress from corn-producing states support the phase out
in part because ethanol made from corn is the primary MTBE substitute. Other
members sympathetic to oil industry concerns, in turn, are demanding that any
ban on MTBE shield its makers from product-defect liability. The proposal
apparently would not preclude suits against parties responsible for allowing
MTBE to leak from storage tanks, but would provide immunity from suits claiming
that MTBE itself was a defective product - precisely the charge that won a $60
million settlement for the South Tahoe Water District this year. The jury in
that case found five oil and chemical companies liable for selling a defective
product - MTBE -while failing to warn of its pollution risks. (Attachment 4)
[View document] The MTBE Papers The
paper trail, dating at least to 1980, tells a different story: How the oil
companies took a byproduct fraction of gasoline refining that had little
profitable use and created a profitable market. Beginning in the mid-1980s, well
in advance of the 1992 federal mandate to reformulate gasoline to meet the
standards of the Clean Air Act, elements of the petrochemical industry promoted
MTBE to U.S. and state regulators as the additive of choice. Thousands
of pages of internal documents and sworn depositions from the producers at
Shell, Exxon, Mobil, ARCO, Chevron, Unocal, Texaco and Tosco (now Valero) have
come to light through a lawsuit by Communities for a Better Environment, a
California public interest group. Many of the same documents were used in a suit
by the South Lake Tahoe Water District against four oil companies and Lyondell
Chemical Co. of Houston (ARCO Chemical Company), the nation's largest MTBE
producer. In the CBE suit, several of the companies settled by agreeing to clean
up MTBE spills at more than 1,300 California gas stations; the others continue
to contest the case. In
2002, a jury in the Tahoe case found Lyondell, Shell, Texaco, Equilon, and Tosco
guilty of irresponsibly manufacturing and distributing a product they knew would
contaminate water. In addition, the jury found by "clear and convincing
evidence" that both Shell Oil Company and Lyondell Chemical Company acted with
"malice" by failing to warn customers of the almost certain environmental
dangers of MTBE water contamination. (Attachment 4) [View document] In
an interview with The Sacramento Bee, the jury foreman said he found the
MTBE papers, which demonstrated the industry's early knowledge that MTBE would
threaten water supplies "among the most compelling evidence he recorded in 635
pages of handwritten notes." The foreman stated that "[t]here were lessons
to be learned, but (Shell) didn't (learn them) because it saw money to be made
in selling the product." After the jury verdict establishing liability, but
before the jury could assess monetary damages, the companies settled the case
for $60 million. Oil Companies Knew MTBE Was a Threat to Water Supplies Even
though MTBE was not classified as a potential cause of cancer in humans until
1995, refiners knew much earlier that its powerfully foul taste and smell meant
that small concentrations could render water undrinkable, and that once it got
into water supplies it was all but impossible to clean up. A Shell
hydrogeologist testified in the South Lake Tahoe case that he first dealt with
an MTBE spill in 1980 in Rockaway, N.J., where seven MTBE plumes were leaking
from underground storage tanks. [Excerpt | Full document] By 1981, when the
Shell scientist wrote an internal report on the Rockaway plumes, the joke inside
Shell was that MTBE really stood for "Most Things Biodegrade Easier." Later,
other versions of the joke circulated, including "Menace Threatening Our
Bountiful Environment," or apropos to the present attempt to limit liability,
"Major Threat to Better Earnings." (Attachment 5) [Excerpt | Full document]
and [Excerpt | Full document] In
1983, Shell was one of at least nine companies surveyed by a task force of the
American Petroleum Institute on "the environmental fate and health effects"
of MTBE and other oxygenates. Shell's Environmental Affairs department replied
to the trade association: "In our spill situation the MTBE was detectable (by
drinking) in 7 to 15 parts per billion so even if it were not a factor to
health, it still had to be removed to below the detectable amount in order
to use the water." (emphasis added). [View document] The survey, the results
of which were later distributed to all API members, asked for information about
the number and extent of spills, chemical analysis of the spill and the
contaminated water, and health effects to people in the community. Clearly,
Shell was not the only company that knew about MTBE problems. An environmental
engineer for ExxonMobil (the companies merged in 1999) testified that he learned
of MTBE contamination from Exxon gasoline in 1980, when a tank leak in
Jacksonville, Maryland, fouled wells for a planned subdivision. The ExxonMobil
engineer said it was learned MTBE had also leaked into the subdivision's wells
from a Gulf and an Amoco station. [View document] Storage
Tanks Were Known to be Leaking in the 1970s and 1980s Refiners
also knew that underground gasoline storage tanks were susceptible to leaks, a
fact that would amplify the problem with MTBE. In 1973, an Exxon report on the
problem said: "The subject of underground leaks at service stations is one of
growing concern to gasoline marketers. Large sums of money, time, and effort are
exhausted on a continuing basis in the location and detection of leaking tanks
and lines." [Excerpt | Full document] In
1981, an ARCO memo said leaking tanks were "a major problem.... The issue is
essentially a health/safety and environmental one. Escaping vapors can seep into
basements, sewers and conduits, creating not only a nuisance but the danger of
explosion and/or fire. Escaping gasoline also enters and pollutes the water
table. (Groundwater is a major source of the U.S. water supply.) Certain
chemicals in gasoline (namely the aromatics like benzene) may be carcinogenic or
toxic in certain quantities." [View document] By
1980, Exxon had an annual testing program for tanks and found that 27 percent
were leaking; two years later the failure rate was up to 38 percent. [View
document] In 1981, Shell and ARCO, the first refiners to add MTBE, estimated
that 20 percent of all U.S. underground storage tanks were leaking. [View
document] Five years later, in 1986, the EPA concurred. [Excerpt | Full
document] Prior knowledge of the extent of leaking gasoline storage tanks was a
major part of South Lake Tahoe's case: Fully aware that tanks were leaking,
the petrochemical industry nonetheless introduced an additive known to rapidly
percolate down to groundwater from gasoline distribution systems with known
leaks. Efforts were ongoing to upgrade storage tank systems, but when industry
learned quickly that the new tanks were still leaking, it continued to expand
the use of MTBE anyway. The
Industry, not the EPA, Promoted MTBE as an Oxygenate Recently
disclosed court documents clearly show that the oil companies, not state or
federal regulators, were the boosters of MTBE. The industry developed and
promoted the concept of using reformulated gasoline to reduce air emissions,
assuring the EPA that reformulated gasoline would be better than other options
being considered. ARCO Chemical Co.'s Manager of Business Development from
1987 to 1998 testified: "What I recall is the EPA actually promoting using
methanol blends... and the refining industry said here's another option... we
can reformulate gasoline to reduce the emissions... that would be equal to or
better than you would get by substituting or mandating the use of methanol
vehicles... [T]he oil industry... brought this forward as an alternative to what
the EPA had initially proposed." He continued, "The EPA did not initiate
reformulated gasoline." (Attachment 3)[Excerpt | Full document Well
before EPA mandated reformulated gasoline in 1992, the oil industry was
aggressively promoting MTBE. According to the American Petroleum Institute,
refiners were adding an average of 74,000 barrels of MTBE to gasoline per day
from 1986 through 1991, roughly one third of the peak amount added to gasoline
in 1998. [View document] In
1987, a representative of ARCO Chemical (later absorbed by Lyondell), which was
rapidly expanding its MTBE production, testified before the Colorado Air Quality
Control Commission that the additive would reduce emissions and improve gas
mileage, that supply and price were no barrier, and that consumers didn't need
to be warned about the presence of MTBE in gasoline. [Excerpt | Full document]
Nothing was said about the leak and contamination problems that ARCO and the
rest of the industry had known about for at least seven years. ARCO's
representative testified that in the 1980s he played a similar role in
"assisting" the states of Arizona and Nevada in the development of oxygenate
programs - programs that resulted in those states adopting MTBE. [Excerpt |
Full document] The Industry Attacked Safety Studies and Withheld
Information From Regulators In
1986, the Maine Department of Environmental Protection published a report
documenting extensive MTBE groundwater contamination in the state. The authors
identified MTBE as a "rapidly spreading groundwater contaminant" and
discussed the option that "MTBE could be abandoned as an additive in gasoline
stored underground" or that gas with MTBE "be stored only in
double-contained facilities." [Excerpt | Full document] The Maine Paper was
perhaps the earliest warning from government health officials about the dangers
of MTBE. To the oil companies, it was a call to arms. Documents show that even
as they were internally disseminating this study and treating its findings
seriously, the oil companies joined forces to attack the study's authors and
the article's "damage" in an effort to discredit their findings and
downplay the risks of MTBE. The
industry disinformation effort began even before publication of the paper. A
1987 ARCO memo details the continued attack on the authors and their research: "We
initially became involved with the Maine DEP prior to the presentation of their
first version of this paper at the National Well Water Conference on November
13, 1986... Since the paper was presented last November, we have been working
with API, the newly formed MTBE Committee [of the Oxygenated Fuels Association],
and on our view to assess the potential impact of this paper on state
policymakers [and] to contain the potential 'damage' from this paper...."
[View document] The
memo goes on to explain how the Maine Petroleum Council, the state affiliate of
the API, was preparing a paper claiming that MTBE didn't speed up the spread
of benzene in water, that MTBE "only spreads slightly further" than benzene
and other contaminants, and that MTBE could be easily removed from water with
existing technology - none of which is true. Internally, however, the industry
admitted the Maine paper was a scientifically credible threat. A 1987 letter
from an ARCO refining executive to his Unocal counterpart admits the MTBE task
force didn't "have any data to refute comments made in the paper that MTBE
may spread further in a plume or may be more difficult to remove/clean up than
other gasoline constituents." In
1987, at the same time that ARCO and API were leading the attack on the Maine
Paper, EPA issued a request to the industry for "more information on the
presence and persistence of MTBE in groundwater." As reported in 2001 by the San
Francisco Chronicle and The Sacramento Bee, ARCO responded: "Where
gasoline containing MTBE is stored at refineries, terminals or service stations,
there is little information on MTBE in groundwater. We feel that there are no
unique handling problems when gasoline containing MTBE is compared to
hydrocarbon-only gasoline." Internal
Memos Warning Against MTBE Were Ignored There
were voices within the industry that warned against the use of MTBE, on grounds
both of public health and cleanup costs from the inevitable leaks. A document
dated April 3, 1984 from an Exxon employee said: "[W]e
have ethical and environmental concerns that are not too well defined at this
point; e.g., (1) possible leakage of [storage] tanks into underground water
systems of a gasoline component that is soluble in water to a much greater
extent [than other chemicals], (2) potential necessity of treating water bottoms
as a 'hazardous waste,' [and] (3) delivery of a fuel to our customers that
potentially provides poorer fuel economy.... " (Emphasis added.) [ That
same year, an Exxon engineer wrote the first in a series of memos outlining
"reasons MTBE could add to ground water incident costs and adverse public
exposure:" "Based
on higher mobility and taste/odor characteristics of MTBE, Exxon's experiences
with contaminations in Maryland and our knowledge of Shell's experience with
MTBE contamination incidents, the number of well contamination incidents is
estimated to increase three times following the widespread introduction of MTBE
into Exxon gasoline...." Later, the document notes: "Any increase in
potential groundwater contamination will also increase risk exposure to major
incidents." An
Exxon memo from 1985 discusses MTBE's "much higher aqueous solubility"
than benzene and other gasoline components: "This
can be a factor in instances where underground storage tanks develop a leak
which ultimately may find its way to the underground aquifer. When these
compounds dissolve in ground water and migrate through the soil matrix they
separate into distinct plumes. MTBE creates the most mobile of the common
gasoline plumes. MTBE is not a known carcinogen like Benzene however we can be
required by public health agencies to remove it based on its taste and odor
characteristics." Thus,
it is clear that the oil industry was not only well aware of the fact the MTBE
is extremely soluble, mobile, and persistent, but that leaks could and had
seriously contaminated water sources, well before the Clean Air Act Amendments
of 1990. ENDNOTES [i] Personal Communication with John Zogorski, USGS, March 11, 2003; Johnson, Pankow, Bender, Price, and Zogorski, USGS, "MTBE: To What Extent Will Past Releases Contaminate Community Water Supply Wells?" Environmental Science & Technology at 2A (May 1, 2000). [ii] South Tahoe Public Utility District v. ARCO, No. 999128 (Superior Court, S.F., March 4, 2002), SPECIAL VERDICT PHASE 1 (Attachment 4). [iii] Johnson, Pankow, Bender, Price, and Zogorski, USGS, "MTBE: To What Extent Will Past Releases Contaminate Community Water Supply Wells?" Environmental Science & Technology at 2A (May 1, 2000). [iv] Ibid. [v] Personal Communication with John Zogorski, USGS, March 11, 2003 [vi] Ibid. [vii] Ibid. [viii] Ibid. [ix] Toccalino, P., "Human Health Effects of MTBE: A Literature Summary," USGS, available on the web at http://sd.water.usgs.gov/nawqa/vocns/mtbe_hh_summary.html; citing inter alia Agency for Toxic Substances and Disease Registry, 1996, Toxicological profile for methyl t-butyl ether (MTBE): Atlanta, GA, U.S. Department of Health and Human Services, Public Health Service, August 1996, 268 p., http://atsdr1.atsdr.cdc.gov/toxprofiles/tp91.html; Health Effects Institute, 1996, The potential health effects of oxygenates added to gasoline. A review of the current literature. A special report of the Institute's oxygenates evaluation committee: Cambridge, MA, Health Effects Institute, April 1996, http://www.healtheffects.org/Pubs/oxysum.htm; National Institute of Environmental Health Sciences, 2002, MTBE (in gasoline): National Institute of Environmental Health Sciences, March 13, 2002, http://www.niehs.nih.gov/external/faq/gas.htm; National Research Council, 1996, Toxicological and performance aspects of oxygenated motor vehicle fuels: Washington, D.C., National Academy Press, 160 p.; National Science and Technology Council, 1996, Interagency assessment of potential health risks associated with oxygenated gasoline: Washington, DC, National Science and Technology Council, Committee on Environment and Natural Resources, February 1996, http://www.ostp.gov/NSTC/html/MTBE/mtbe-top.html; Office of Science and Technology Policy, 1997, Interagency assessment of oxygenated fuels: Washington, DC, Office of Science and Technology Policy, National Science and Technology Council, Executive Office of the President of the United States, June 1997, 264 p., www.epa.gov/oms/regs/fuels/ostpfin.pdf . [x] Toccalino, supra; citing inter alia National Institute of Environmental Health Sciences, 2002, MTBE (in gasoline): National Institute of Environmental Health Sciences, March 13, 2002, http://www.niehs.nih.gov/external/faq/gas.htm; U. S. Environmental Protection Agency, 1995, Proceedings of the conference on MTBE and other oxygenates: a research update. Conference summary session seven: Research Triangle Park, NC, U.S. Environmental Protection Agency, National Center for Environmental Assessment, EPA/600/R-95/134, August 1995, 274 p., www.epa.gov/ncea/pdfs/mtbe/0850-A.pdf; National Research Council, 1996, Toxicological and performance aspects of oxygenated motor vehicle fuels: Washington, D.C., National Academy Press, 160 p.; National Science and Technology Council, 1996, Interagency assessment of potential health risks associated with oxygenated gasoline: Washington, DC, National Science and Technology Council, Committee on Environment and Natural Resources, February 1996, http://www.ostp.gov/NSTC/html/MTBE/mtbe-top.html' Office of Science and Technology Policy, 1997, Interagency assessment of oxygenated fuels: Washington, DC, Office of Science and Technology Policy, National Science and Technology Council, Executive Office of the President of the United States, June 1997, 264 p., http://www.epa.gov/oms/regs/fuels/ostpfin.pdf. [xi]
Hartley, W.R., A.J. Englande, Jr., and D.J.
Harrington. 1999. "Health risk
assessment of groundwater contaminated with methyl tertiary butyl ether."
Water
Science & Technology 39, no. 11: 305-310. [xii] Toccalino, supra; Health Effects Institute, 1996, The potential health effects of oxygenates added to gasoline. A review of the current literature. A special report of the Institute's oxygenates evaluation committee: Cambridge, MA, Health Effects Institute, April 1996, http://www.healtheffects.org/Pubs/oxysum.htm; National Institute of Environmental Health Sciences, 2002, MTBE (in gasoline): National Institute of Environmental Health Sciences, March 13, 2002, http://www.niehs.nih.gov/external/faq/gas.htm; [xiii] Toccalino, supra citing inter alia; National Science and Technology Council, 1996, Interagency assessment of potential health risks associated with oxygenated gasoline: Washington, DC, National Science and Technology Council, Committee on Environment and Natural Resources, February 1996, http://www.ostp.gov/NSTC/html/MTBE/mtbe-top.html; Office of Science and Technology Policy, 1997, Interagency assessment of oxygenated fuels: Washington, DC, Office of Science and Technology Policy, National Science and Technology Council, Executive Office of the President of the United States, June 1997, 264 p., http://www.epa.gov/oms/regs/fuels/ostpfin.pdf; U. S. Environmental Protection Agency, 1997, Drinking water advisory: Consumer acceptability advice and health effects analysis on methyl tertiary-butyl ether (MTBE): Washington, DC, U. S. Environmental Protection Agency, Office of Water, EPA-822-F-97-009, December 1997, 48 p., http://www.epa.gov/waterscience/drinking/mtbe.pdf.; California Department of Health Services, 2001, Proposed Regulations, California Code of Regulations, Title 22, Chapter 15, Section 64468.2. health effects language - volatile organic chemicals: Sacramento, CA, California Department of Health Services, R-16-01, April 12, 2001, 26 p., http://www.dhs.cahwnet.gov/ps/ddwem/publications/Regulations/R-16-01-RegTxt.pdf. [xiv] U. S. Environmental Protection Agency, 1997, Drinking water advisory: Consumer acceptability advice and health effects analysis on methyl tertiary-butyl ether (MTBE): Washington, DC, U. S. Environmental Protection Agency, Office of Water, EPA-822-F-97-009, December 1997, 48 p., http://www.epa.gov/waterscience/drinking/mtbe.pdf [xv] Ibid. [xvi] Johnson, R., et al., "MTBE: To What Extent Will Past Releases Contaminate Community Water Supply Wells?", Environ. Sci. Technol. 2000, 34 (9), 210 A-217. [xvii] US EPA, 2002, Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs, p. ES-11, 5-14, and 7-2. [xviii] Ibid., p. 4-4. [xix] Ibid., p. 4-4. [xx] Ibid., p. 3-10. [xxi] Gurney, S., 2002, Comments submitted by the Natural Resources Defense Council about US EPA draft report Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs., US EPA Water Docket ID No. W-01-09-11 [xxii] First letter to EPA Administrator Christine Todd Whitman from Congressman Henry Waxman, October 1, 2002. Available at http://www.house.gov/waxman/news_letters.htm. [xxiii] "Does Hydraulic Fracturing Harm Groundwater?," Environ. Sci. Technol. 2003, 37 (1), 11A-12A. [xxiv] News from the Ground Water Protection Council found at http://www.gwpc.org/News-2003/states-weigh.htm .
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