Arco, O.C. Set Gas Station Cleanup Terms

Oil giant Arco on Tuesday agreed to spend millions of dollars cleaning up contamination beneath 143 gas stations that threatens Orange County’s drinking water supply, ending a lengthy legal battle closely watched around the state.

Atlantic Richfield Co. was one of several that the Orange County district attorney’s office sued for allowing leaking gasoline storage tanks to taint the soil and ground water with MTBE, a gasoline additive that may cause cancer.

Attorneys said Orange County’s settlement provides a roadmap for other counties trying to hold oil companies accountable for pollution. Unlike previous legal settlements involving MTBE pollution, Orange County was able to win cleanup commitments from the corporation even though the pollution has yet to seriously harm the water supply.

“It sets a standard for all the other oil companies,” said Arco spokesman Paul Langland.

“We’ve got a lot of work to do. But I think we are on our way to making sure all of our sites are cleaned up.”

Dist. Atty. Tony Rackauckas said the deal protects Orange County residents and ensures that the water supply will remain safe “for the present and future generations.... You simply cannot put a price on the value of having a fresh, clean supply of drinking water that is free of dangerous contamination.”

Arco, owned by British Petroleum, agreed to spend $3 million to study each gas station, allowing an independent environmental consultant to determine the extent of contamination and required cleanup.

Arco has already spent $16 million cleaning up gas stations in Orange County, and under the settlement, it is required to pay for any additional cleanup that the study finds necessary. Under state and federal law, oil companies are already responsible for cleaning up their contamination, but mandating it in a legally binding agreement carries more weight.

Officials could not estimate the total cleanup cost, but the company is likely to spend millions of dollars more.

In addition, Arco will reimburse the county for $5 million in legal costs.

MTBE, or methyl tertiary butyl ether, is added to gasoline to make it burn cleaner, reducing air pollution. States across the nation realized in recent years that the chemical also spreads rapidly through water and soil, and can, even in small amounts, make drinking water smell like turpentine. It causes cancer in animals and is a likely carcinogen for humans.

These factors led Gov. Gray Davis to phase the chemical out of California gasoline by the end of 2003.

Some communities have lost much of their local drinking water supply because it was tainted by MTBE. Santa Monica won $30 million in a settlement from two oil companies, which also agreed to build a treatment plant to sanitize the city’s ground water.

The vast aquifer beneath northern and central Orange County has remained largely protected from the contamination. So the Arco settlement could open the door for other communities that have leaks but so far no water contamination to seek similar commitments from oil companies.

Davis’ point man on MTBE, California Environmental Protection Agency Assistant Secretary William Rukeyser, praised the settlement.

“We of course are very glad to see local action pay off,” he said. “They have taken the investigation in a considerably different direction than [other counties and the state]. They connected a variety of dots in terms of lack of compliance in upgrades, the leaks, the contamination, and based their case on that.”

Mark Robinson, a consumer attorney whose firm assisted Orange County, said he has already received calls from officials in San Diego, Contra Costa and Alameda counties about following Rackauckas’ lead.

Orange County’s suits against three other companies, including Shell Oil and the Thrifty gas station chain, are pending.

Environmentalists and others expressed mixed feelings about the deal.

The former lead prosecutor on the case, who resigned after what she described as repeated clashes with Rackauckas, said she was disappointed with the outcome.

Former Deputy Dist. Atty. Michelle Lyman said the office should have taken the case to trial and asked for tens of millions of dollars in civil penalties.

“All they’re being required to do by this judgment is what they were already legally required to do,” Lyman said.

“There’s not one red cent of civil penalties to punish them for the hundreds of violations that were committed and for grossly contaminating the county’s drinking water aquifer.”

Rackauckas, however, said it is important that all proceeds from the settlement go to cleaning up the environmental mess.

“We want the money that Arco spends to go to cleaning up the environment, to making sure the ground water is protected,” he said.