3 Companies Liable in Tahoe MTBE Pollution

A jury has found three companies responsible for poisoning South Lake Tahoe’s drinking water supply with a possible carcinogen found in gasoline--and found that two of the firms knew the chemical’s dangers for years but failed to warn water officials.

Shell Oil, Lyondell Chemical Co. and Tosco Corp. are responsible for pollution that shut down more than a third of South Lake Tahoe’s 34 drinking wells, the San Francisco Superior Court jury said Monday.

The jury also found that Shell and Lyondell withheld information about the dangers of MTBE (methyl tertiary butyl ether) and that the gasoline additive is a defective product. Deliberations on damages are tentatively scheduled to begin April 22.

South Tahoe Public Utility District officials and spokespeople for Lyondell and Tosco declined to comment Tuesday. Attempts to reach Shell officials were unsuccessful.

“It’s a big decision. For the first time, MTBE in gasoline is considered a product defect. It’s going to have ramifications across the country,” said Will Rospov, an attorney with San Francisco-based Communities for a Better Environment. “It shows that the oil companies are finally going to be held accountable for MTBE contamination.”

MTBE was first added to gasoline more than two decades ago to make it burn cleaner, and its use became widespread in the 1990s. Later research revealed that it spreads quickly through the soil and groundwater and may cause cancer.

Officials struggling with MTBE contamination elsewhere praised the decision.

“It should reverberate in the executive suites and board rooms of oil companies and cause them to realize they have embarked on a legal strategy that will bring them nothing but grief,” said Joe Lawrence, Santa Monica’s assistant city attorney. The city has sued seven major oil companies and 11 other firms for allegedly tainting much of its drinking water with MTBE.

Cleanup costs could reach $200 million, according to the U.S. Environmental Protection Agency. The case is expected to go to trial next year.

Lawrence said several dozen similar cases have been filed across the nation.

Cleanup nationwide is expected to cost at least $29 billion, according to a study commissioned by Santa Monica and several other cities. California is phasing out use of the chemical by Jan. 1, 2004.

In Orange County, prosecutors have sued several oil companies, seeking civil penalties from Atlantic Richfield Co., BP Amoco Corp., Thrifty Oil Co., Shell Oil Co., ARCO Chemical Co. and Lyondell Chemical Co. The suits allege that the firms are responsible for contaminating ground water under 330 gas stations in Orange County.

The South Lake Tahoe decision “doesn’t carry any precedential value legally,” said Michelle Lyman, a deputy district attorney. “As a practical matter, it should send a message to the defendants that at least one set of jurors believes that they failed to disclose what they knew about MTBE.”