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Murphy Administration Settles MTBE Pollution Cases for $200 Million

Natural-resources damage suit involves three oil companies who contaminated groundwater with potentially carcinogenic gasoline additive

gasoline puddle
Credit: Wikipedia

The Murphy administration yesterday said it has settled cases with three oil companies who have agreed to pay nearly $200 million for polluting water with a potential human carcinogen.

Attorney General Gurbir S. Grewal announced approval of draft settlements reached by the Christie administration to resolve natural-resources damage lawsuits against the three defendants involving contamination of groundwater with an additive to gasoline.

The cases involve a decade-old lawsuit filed against nearly 50 companies alleging they were responsible for polluting state waters with the gasoline additive, methyl tertiary butyl ether (MTBE). The state Department of Environmental Protection has found the potential human carcinogen at over 6,000 sites.

MTBE was an additive to gasoline approved by the federal Environmental Protection Agency in 1979 to help make the fuel burn cleaner and lower carbon monoxide pollution from vehicles. At the time, the state was not in compliance with federal health-quality standards for the pollutant.

"These are important legal settlements on behalf of New Jersey citizens — not only in terms of dollars, but in terms of sending a message that we are committed to working with the DEP to protect our state's natural resources and hold accountable companies that pollute,'' Grewal said in a statement from his press office.

The initial lawsuit was brought by the Corzine administration in 2007 under a natural-resources damage case, which allows the state to recover the costs for the spills and to restore the natural resources damaged by the pollution.

The case is the first to be finalized since voters approved a constitutional amendment prohibiting money from such lawsuits being diverted away from cleanup and restoration of natural resources. The Christie administration frequently diverted such money to help plug deficits in the state budget, a practice routinely criticized by environmental groups.

In the most recent settlement, Shell agreed to pay $68.5 million to resolve its liability; Sunoco already has paid $64 million; and BP agreed to pay $64 million, in addition to the $32 million it already has paid.

The remaining defendants include major petroleum refiners, distributors, and sellers of gasoline in New Jersey, as well as independent chemical manufacturers of MTBE.

With the three settlements announced yesterday, the Division of Law has obtained more than $350 million in settlements with defendant companies in the MTBE litigation.

Jeff Tittel, director of the New Jersey Sierra Club, criticized the latest settlement. "We believe these companies got off the hook cheap,'' he said. "They polluted millions of gallons of drinking water in communities across New Jersey.''

The DEP continues to pursue its MTBE damage claims against the remaining defendants who have not settled, including ExxonMobil.

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