Talks Stall Over Payment for Tainted Wells

State-ordered negotiations between Mobil Oil Corp. and Santa Monica have failed to resolve how the oil company will pay to replenish water allegedly fouled by leaky underground gas tanks, officials said Tuesday.

In January, Santa Monica filed a lawsuit against Mobil charging that leaks at a local Mobil gas station’s underground tanks contaminated city wells with methyl tertiary butyl ether or MTBE, an additive used to cut smog that may cause cancer.

The city shut down two wells at the Arcadia Well field last fall after the seeping chemicals contaminated 10% of the city’s ground water supply, forcing the city to purchase replacement water at a cost of $300,000 a year. The city believes that several other companies share responsibility for the well pollution, which has tainted 75% of its water supply.

Mobil was supposed to resolve the terms of payment for Santa Monica’s substitute water by March 1, according to a consent agreement reached last month between the state’s Los Angeles Regional Water Quality Control Board and the oil company. But when Mobil executives met with state officials Tuesday, they reported an impasse with the city.

“We put an offer on the table we thought was fair and acceptable,” said Carolin Keith, a spokeswoman for Mobil. “We disagreed with their response.” The state agency gave the oil company until noon today to explain the stalemate in writing.

Santa Monica officials charge that Mobil failed to seriously negotiate. The city charged that the oil company wanted the lawsuit suspended while it began paying for the replacement water--a demand the city called unacceptable.

“Mobil did nothing, as far as we’re concerned,” said Assistant City Atty. Joseph Lawrence. “It was not a good-faith effort. . . . It’s high time Mobil takes responsibility for this.”

Regional water board officials said they will make a decision in the next few days about what action to take. The agency could extend the deadline for negotiations or issue an abatement order requiring the oil company to provide or pay for replacement water immediately.

“We’re still exploring our options,” said James Kuykendall, head of ground water tank activities for the water board. “It is disappointing” that no consensus occurred, he said.

Santa Monica officials--already angered that the state entered a consent agreement with Mobil without including the city in talks--want the board to order Mobil to pay for the replacement water costs.

“The state has regrettably walked arm in arm with Mobil along a path that has led to pollution and no cleanup and no hope for a cleanup in the near future,” Lawrence said. “We think the state should have been tougher and demanded more from Mobil.”

State environmental protection officials balked at accusations that the agency has given Mobil preferential treatment.

“The state’s involvement has led to real action in this,” said James Strock, head of the California Environmental Protection Agency. “The question of how the city’s interests are protected is one we’ve made a top priority.”

Lawrence said the city was willing to consider putting the lawsuit on hold, but in return wanted additional money from Mobil to pay for the costs of investigating the contaminated water supply.

Mobil officials said they have agreed to pay for replacing the water from Arcadia Well field, but refused to pay for related costs while the source of contamination is being investigated.

“We’re not asking the city to set aside any of their rights to recover costs down the road,” oil company spokeswoman Keith said.