The Santa Monica City Council has approved a settlement with two oil companies that the city said were partly responsible for contaminating its municipal water supply with the gasoline additive MTBE.
The accord comes six years after Santa Monica discovered the turpentine-scented compound in its drinking water wells--drawing attention to a problem now known to affect thousands of public and private wells across the nation.
Under the settlement, Chevron Products Co., a subsidiary of ChevronTexaco Corp., and Exxon Mobil Corp. would pay to design, build and operate a facility to treat the city's water--a venture that is expected to cost more than $200 million over several years. The companies would also pay the city $30 million in cash to cover damages.
The settlement, still subject to court approval, is expected to be closely watched by other communities with MTBE contamination linked to underground gas tanks and pipelines. The case is being handled by Superior Court Judge Stephen J. Sundvold in Orange County, where it was moved at the request of the oil companies.
With the council's approval, "we have reached an important milestone toward restoring Santa Monica's water and ridding our wells of a dangerous chemical," said City Atty. Marsha Jones Moutrie. "We still have a long way to go, but we're moving in the right direction."
Two years ago, Santa Monica sued seven major oil companies and 11 other manufacturers, suppliers, refiners and pipeline operators, claiming that they had tainted much of the city's drinking water with MTBE, a probable cancer-causing chemical that is added to gasoline to make it burn cleaner.
MTBE, or methyl tertiary butyl ether, was first added to gasoline more than two decades ago to reduce air pollution. Its use became widespread in the early 1990s.
But further research indicated that the chemical is dangerous and spreads fast in soil and ground water. Even small amounts can make drinking water smell like turpentine.
Communities nationwide then found water wells contaminated with the substance. A sweeping cleanup will cost at least $29 billion, a study by Santa Monica and several other cities found.
Santa Monica was suddenly thrust into a discussion of the little-known chemical in 1996, when MTBE was detected in seven of its 11 drinking water wells. The city was unusual in having its own water supply, and the closure of the seven wells sent it scrambling to find replacement water.
Years ago, ChevronTexaco, Shell Oil Co. and Exxon Mobil voluntarily agreed to help the city deal with the contamination. But that pact expired in January 2000. The city sued five months later.
In the interim, Shell has been paying Santa Monica $3.25 million a year to cover the cost of importing water. Federal and regional environmental officials had designated Shell as the company primarily responsible for the contamination, and that persuaded it to help the city pay for more imported water, said Craig Perkins, city director of environmental and public works management.
As part of its settlement, the city has agreed to cease legal action against the two oil companies. If the city prevails against the oil companies not involved in the settlement, Exxon Mobil and ChevronTexaco might be able to recoup a portion of the amount they have agreed to spend to restore the city's drinking water, Perkins said.
It will be at least five years before the facility to treat all the city's water opens, he added.
Exxon Mobil said in a statement that it was pleased with the accord. Rod Spackman, Chevron Products' manager of government and public affairs in the Los Angeles area, said: "Protracted litigation around these issues we think is unproductive, and you draw resources away from fixing the problem."
Spackman added that "it is our strong belief that our facilities have in no way contributed to the contamination." Chevron Products is based in San Ramon, Calif.
Said City Atty. Moutrie: "It is to [the firms'] credit that they are accepting responsibility, rather than fighting it tooth and nail."