Accord Near on Water Cleanup

The city of Santa Monica, whose contaminated ground water may be an omen of the downside of cleaner-burning gasoline, is expected to announce an agreement today with two oil companies to begin solving the problem of its MTBE-polluted wells.

In a deal worth at least $5 million, Shell Oil Co. and Chevron Corp. will begin efforts to clean the closed Charnock well field--which was once Santa Monica’s largest source of drinking water. The agreement also calls for the companies to repay the city’s costs for importing residents’ water and investigating the site.

“This takes us very far along in solving the water problems in Santa Monica,” said Joseph Lawrence, Santa Monica’s assistant city attorney. “Santa Monica was the first victim of MTBE and now it has become the first survivor.”

In addition to being the first step toward cleaning the wells tainted by MTBE, or methyl tertiary butyl ether, the agreement is also the first bit of relief for beleaguered Santa Monica residents who saw their water rate jump by almost one-third.

Santa Monica Mayor Pam O’Connor said she expects the council to take some action on the matter in July, although it is unclear whether the city would be able to offer its residents rebates or a rate reduction.

Today’s deal, which has been in negotiation since last fall, does not end Santa Monica’s water problems.

Shell and Chevron admit no wrongdoing, and it has never been proved that they are responsible for the well contamination.

The pool of possible polluters also includes the owners of 41 nearby sites of underground gas tanks and pipelines, so Shell and Chevron have agreed to cover only 75% of the city’s costs to import water for the first year.

Remaining costs would be made up to the city by Shell and Chevron after the first year if the oil companies continue with the agreement, which would mean an additional $3-million payment to the city.

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The agreement is structured with a series of points--starting in January--at which the oil companies can pull out of the agreement if they later determine that they are not the cause of the pollution. That would cap their payments to the city at $5 million.

With no other companies so far agreeing to take responsibility for the cleanup, that would put the city back on the road to suing Shell, Chevron and the other site owners to recover their losses, city attorneys say.

“The incentives are in place, we believe, for them to continue on with the agreement,” Lawrence said. “Otherwise they have paid the city $5 million and all they’ll have to show for it is a lawsuit.”

An Environmental Protection Agency meeting with city officials and all the site owners, also set for today, could go part of the way toward encouraging the others to enter into the Shell/Chevron agreement.

The agreement allows Shell and Chevron to avoid far greater litigation costs, potential monetary damages and public ill will.

“The value for us is the fact that we are working cooperatively with the city to solve this problem,” said Rod Spackman, a Chevron spokesman.

“Nobody’s wasting resources,” Spackman added. “We’re not tying up people or talent or money to worry about the legal issues involved with this, we’re using all our resources to alleviate the problem.”

As part of the agreement, the city and the oil companies have agreed to work together to bring the other site owners into the deal--upping the city’s chances of fully recovering its out-of-pocket costs and increasing the likelihood of quickly restoring its wells.

Shell and Chevron’s expenditures, as the deal stands now, are almost certain to go beyond the $5-million mark. Already, Spackman said, Chevron has invested “several million dollars” in investigating the site.

And the initial payments to the city are likely to be far surpassed by the costs, to whomever is responsible for the tainted wells, of cleaning the site along Sawtelle Boulevard in Mar Vista.

As part of their deal, the parties have agreed that the wells should have an MTBE limit no higher than 20 parts per billion--far lower than the EPA’s advisory limit of 70 ppb and lower than the state’s recommended limit of 35 ppb, the level at which taste and odor are generally affected.

But how the responsible parties will get the MTBE levels back down to that level, and how quickly they can do it, is still unknown. As part of the deal, Shell and Chevron will pay for a three-person scientific advisory panel.

“They could potentially spend tens of millions of dollars on this problem,” Lawrence said. “Both because the sources of pollution are not presently known and because the technology to clean it up is not in place, we’re talking about cleanup that could go well into the early part of the next century.”

The irony of the danger that MTBE poses to the nation’s water supply is in the chemical’s intended use: as a gasoline additive designed to cut down on air pollution.

Now in 90% of the state’s gasoline supply, MTBE is responsible for removing 520 tons of carbon monoxide daily from California air.

Santa Monica’s predicament was the first and most severe indication of a problem with the chemical, which the Environmental Protection Agency has said is a possible carcinogen when introduced into the water supply.

“You’ve got the most environmentally respected city in the nation and yet almost as if God has a sense of humor, that’s where the problem first arises,” said Barry Groveman, special counsel to the city.

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The city first detected MTBE in September 1995. By March 1996, soon after state health officials recommended testing water wells for the chemical, the city began closing down first Charnock and then the Arcadia well field, which is not covered in today’s agreement.

Although other California wells have demonstrated some levels of contamination--including some in Orange County, San Fernando Valley, South Lake Tahoe and Marysville, north of Sacramento--none had it as bad as Santa Monica.

The first measurements at the Charnock site detected MTBE at 35 parts per billion, the state’s recommended safety limit.

But over the next several weeks, the MTBE level increased so much--to as much as 610 parts per billion--that workers at Charnock were able to smell MTBE’s distinctive, paint-thinner odor.

The city has alleged that MTBE contamination at its Arcadia well site, with two wells as compared to Charnock’s five, is solely the result of leakage from a Mobil Oil Corp. service station.

MTBE was first used by oil companies in small amounts in 1979, as a way to increase gasoline octane.

When Congress in 1990 approved the Clean Air Act, requiring states to dramatically reduce auto emissions, the oil industry offered MTBE--an additive that increases the oxygen content in gas--as a partial solution.

Since then, MTBE has become the second-most-common commercial chemical produced in the United States, with oil companies and their subsidiaries producing 20 billion pounds each year. And production is rising 25% each year, with California the largest single market.

“Underground storage tanks leak, they always have, they always will, and so does the piping associated with it,” Groveman said. “There’s absolutely no reason why this isn’t going to be happening everywhere.”