Suit Settled in Fuel Leaks

Oil giant Shell has agreed to pay an “unlimited” amount to fund underground cleanup of its contaminated Orange County gas stations, a total that could exceed $170 million, prosecutors said Thursday.

Houston-based Shell Oil Products US is the last of three oil companies to settle with the district attorney’s office since prosecutors filed the environmental protection lawsuit six years ago.

The settlements are considered groundbreaking, prosecutors said, because the county was able to win the cleanup commitments before the pollution harmed the water supply.

“It is important to prevent the drinking water from becoming contaminated in the first place because, once polluted, it is extremely expensive and difficult to clean up,” Dist. Atty. Tony Rackauckas said during a news conference at his Santa Ana office.

But an assemblyman from Orange County and lawyers for the Orange County Water District, which sued major oil companies including Texaco and Shell in May 2003, say the actions ordered in the settlement won’t sufficiently protect the county’s water supply.

The water district’s suit addresses the oil companies’ liability for using the gasoline additive MTBE, a suspected human carcinogen now phased out, and their alleged failure to prevent it from seeping into underground drinking water supplies -- something that has not yet been detected.

“The D.A.’s suit focuses on the very narrow, technical issue of the companies’ violations of state regulations,” said Vic Sher, the district’s San Francisco-based lawyer. “Everything helps, but it appears that the D.A.’s contribution is quite a small one.”

As such, he doesn’t expect the county prosecutor’s settlement to affect the water district’s ongoing case, currently set to be heard along with similar lawsuits from other states in a New York federal court.

Assemblyman Todd Spitzer (R-Orange) said the district attorney’s settlement was useless because it required the oil companies to do what was already required by law. Prosecutors should have required a specific dollar amount for the cleanup to ensure that it would happen, he said.

“This is a completely empty settlement with no teeth in the enforcement of the cleanup,” said Spitzer, considered a likely candidate to oppose Rackauckas in his 2006 reelection bid. “ ‘Unlimited’ in this case means nothing.”

Prosecutors, though, said naming a dollar amount could have limited the lawsuit’s reach, if the cleanup costs exceeded the total. With a neutral company selected to oversee the pollution probes and cleanup, Orange County is assured a thorough cleanup job, said Assistant Dist. Atty. Joe D’Agostino.

The district attorney’s office filed the suit when the companies allegedly refused to comply with regulations and after the county discovered contaminants leaking beneath 80% of the county’s 184 Shell and Texaco gas stations.

Improperly maintained storage tanks at nearly 150 stations led to gasoline leaking into the surrounding soil and groundwater, prosecutors said, although not deep enough to contaminate drinking water aquifers.

In addition to providing as much as needed to clean up the stations, the settlement will fund a $10.5-million program to test for leaks, $3.5 million to the district attorney’s office to reimburse costs of the case and to fund future investigations, and a combined $500,000 to the county Health Care Agency and four city fire departments to enforce county underground storage tank programs.