Methanex Files Suit Over Gas-Additive Ban

Methanex Corp., a Canadian fuel-additive manufacturer, has filed a lawsuit seeking nearly $1 billion in damages against the U.S. government. The suit alleges that a California ban on the use of the gas additive MTBE has violated its investor rights under the North American Free Trade Agreement. The controversial Chapter 11 clause of NAFTA, which the Canadian government is seeking to amend, allows companies to seek compensation from the governments of Canada, Mexico or the U.S. for imposing measures that impede commerce. In California, the use of MTBE is being phased out because of environmental concerns. This is the second NAFTA action to be filed against the U.S. since the free trade agreement took effect five years ago. Most of the half-dozen claims filed by companies under the Chapter 11 clause are still in arbitration. Last year, Canada paid $13 million to Ethyl Corp. and agreed to drop a ban on another fuel additive known as MMT after the Richmond, Va., company filed a similar Chapter 11 complaint.