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GOP Proposes Fund to Clean Water

With an energy bill stalled, House Republicans suggest spreading the cost of removing fuel additive MTBE from supplies.

July 23, 2005|Richard Simon | Times Staff Writer

WASHINGTON — In a bid to remove the chief stumbling block to long-debated energy legislation, House Republicans on Friday proposed creating a multibillion-dollar fund to pay for cleaning water supplies fouled by a gasoline additive. The cost would be shared by the oil industry and federal and state governments.

The energy bill was thwarted two years ago largely because of a dispute over methyl tertiary-butyl ether, or MTBE, a fuel additive credited with helping reduce smog but blamed for contaminating water supplies across the country.

White House officials and lawmakers from both parties have hoped that rising gasoline prices and growing concern about U.S. dependence on foreign oil would create momentum for an energy bill to clear Congress this year. And the proposed cleanup fund represents the most aggressive effort yet to reach agreement on the MTBE issue.

More negotiating appears necessary, however. The proposed compromise failed to move at least one of the targeted senators, Republican Judd Gregg of New Hampshire, who dismissed it as "more smoke and gas brought to you by Big Oil."

New Hampshire is among the states with contaminated water supplies, as is California.

Gregg's response showed that more White House involvement might be needed to settle the dispute that again threatened to doom the sweeping energy legislation. Overhauling the nation's energy policy has been a priority for President Bush since 2001.

The energy bill, which includes several provisions designed to address high energy prices, passed the House in 2003 but fell two votes short of overcoming a filibuster in the Senate. A bipartisan group of senators objected to a House-backed provision that would have protected producers of MTBE from pollution-related lawsuits.

This year's House-passed energy bill included the MTBE protection provision; the Senate version did not.

To resolve the dispute, Rep. Joe L. Barton (R-Texas), chairman of the House Energy Committee, on Friday proposed having the oil industry and taxpayers pay into an $11.4-billion cleanup fund.

The industry, including gas retailers as well as major manufacturers, would contribute about $4 billion over 12 years. The federal government would pay about $4.5 billion, and states would chip in about $3 billion.

In return, MTBE producers still would be shielded from product-liability lawsuits brought because of contaminated water supplies.

But in a move to win the support of the New Hampshire senators who helped kill the last energy bill, the proposed deal would allow one lawsuit filed after Sept. 5, 2003, to go ahead -- the one brought by the state of New Hampshire.

To make clear he was targeting Gregg and New Hampshire's other senator, Republican John E. Sununu, Barton was joined in offering the compromise by Rep. Charles Bass (R-N.H.).

The proposal is expected to be presented within the next few days to House-Senate negotiators working to bridge differences on an energy bill.

But the reaction from Gregg -- and a similarly cool response from Sununu -- was not a good sign for House Republicans hoping for a speedy agreement.

The U.S. Conference of Mayors also criticized the compromise, calling the proposed fund "woefully inadequate" to cover cleanup costs estimated at $25 billion or more. And the American Water Works Assn. issued a statement saying any agreement must "not pass on cleanup costs to local governments, water consumers and local taxpayers who did not cause this mess."

Oil industry groups attacked the proposed fund as excessive. The American Petroleum Institute and other industry groups issued a statement saying the proposal would create a fund "that is much larger than what experts indicate is needed." The industry contends the cleanup would cost about $2 billion.

Some Democrats assailed the proposal.

"Now that the details of this industry bailout have emerged from back-room, closed-door discussions, it's clear why they've been kept in the dark," said Rep. Lois Capps (D-Santa Barbara).

In California, a spokesman for state Atty. Gen. Bill Lockyer said his office had "grave concerns" about the proposal.

In announcing the compromise at a Capitol Hill news conference, Barton took aim at a popular target of congressional Republicans: trial lawyers.

"If you want to clean up the water supply, this is a good deal," he said. "If you want to put more money in the trial lawyers' pockets, this is a bad deal."

The legal protections for MTBE producers have been championed by House Majority Leader Tom DeLay (R-Texas), whose state is one of the additive's main producers.

Industry officials have contended that Congress was responsible for promoting the use of MTBE by requiring cleaner-burning gasoline in the nation's smoggiest regions. Supporters of the provision argue that the legislation would not prevent all MTBE-related lawsuits, such as for negligence or mishandling of the additive, but would prevent plaintiffs from claiming that MTBE is a defective product.

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