4 Oil Firms Settle Suit Over Dump : Environment: They agree to pay $18 million for cleanup preparation costs at the McColl site in Fullerton.

The Environmental Protection Agency said Thursday that four oil companies have agreed to pay $18 million to settle a lawsuit over the long-delayed cleanup of a toxic waste dump created in World War II.

The payment by Shell Oil Co., Atlantic Richfield Co., Union Oil Co. of California and Texaco Inc. will reimburse the state and federal governments for past costs associated with preparing for the cleanup of the 22-acre McColl dump site.

Although the settlement is a significant step in the complex litigation over the cleanup effort, the dispute over McColl is far from over. The oil companies are waging a countersuit to determine if the federal government should pay part of the cleanup costs that could reach $125 million.

“The U.S. EPA is pleased the oil companies have recognized their responsibility at this site,” Jeff Zelikson, the agency’s regional hazardous waste management division director, said in a prepared statement.

Under the settlement, the oil companies will reimburse the government for the $18 million spent between 1980 and mid-1990 to secure the dump and explore cleanup options.

The EPA deemed McColl a major toxic problem in 1979 and added it to the federal Superfund priority list of toxic cleanup sites in September, 1983. A fence has been built around the area and a security guard posted to keep out intruders while the debate continues over how to proceed with the cleanup.

Once a remote area in Fullerton, the site contains about 100,000 cubic yards of petroleum waste discarded in the 1940s, later to be covered by oil drilling muds and topsoil. Eventually, the area became part of the Los Coyotes Country Club golf course. In the 1970s, homes were built next to the golf course, and their buyers complained of strong odors that caused headaches, and black goo that oozed into their back yards.

Under the settlement, $13.25 million will go to the EPA and $4.75 million to the state to replenish the Superfund account.

“The settlement prevents the McColl site from becoming an expensive orphan that consumes millions of dollars from the state and federal treasuries,” said William F. Soo Hoo, director of the California Department of Toxic Substances Control.

The settlement figures, spelled out in a consent decree filed Thursday in Los Angeles, represent a compromise, according to EPA officials who said they originally sought $25 million from the oil companies.

Greg Ritter, assistant regional counsel for EPA in San Francisco, said the agency is attempting to get McAuley LCX Corp., owner of Los Coyotes Country Club, to pay the $7-million difference.

Settlement negotiations between the EPA and the oil companies began after U.S. District Court ruled in September, 1993, that the oil companies were legally liable to pay for cleanup of the wastes that they deposited at McColl in World War II during the production of aviation fuel. Until then, the oil companies had denied responsibility.

Bill Duchie, spokesman for the oil companies, said Thursday that the firms will proceed with a countersuit that contends that financial liability for the total cleanup should be shared by the federal government because the dump was created as part of the war effort.

Duchie said the oil companies agreed to put up funds for the past costs “because we want to move directly into the issue of what portion of liability can be assessed to the U.S. government.”

If the federal government is found partly responsible, Duchie said, the oil companies will seek to recover a portion of the $18 million that they have now pledged.

Over the years, the EPA has discarded a variety of proposed cleanup approaches--including removal and incineration of the waste--as too costly or hazardous.

In June, 1993, the EPA decided to go ahead with a plan to solidify and neutralize the waste by mixing it with a cement-like material, but feasibility studies of the process are still under way. Ritter said the oil companies, under orders from the EPA, are designing the clean-up effort. A large-scale field test of the procedures is scheduled in November.