The Nelson A. Rockefeller Center for Public Policy and the Social Sciences

MTBE Presence in Groundwater

Current Legal and Policy Implications for Prevention and Cleanup
PRS Briefs
PRS Policy Brief 0607-01
December 05, 2006
Elizabeth
A.
Hadzima
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Executive Summary

Methyl Tertiary Butyl Ether (MTBE) has replaced lead as an on the United States to increase engine combustion efficiency and reduce tailpipe emissions. The use of MTBE was expanded after the 1990 Clean Air Acts Amendments (CAA Amendments) both banned the use of lead as a gas additive and established oxygenate requirements. These oxygen requirements mandated that oxygen must be added to gasoline in areas that do not reach National Ambient Air Quality Standards for both ozone and carbon monoxide.

The CAA Amendments do not specify what type of oxygenate must be used yet petroleum producers prefer to use MTBE because of its low cost and facile production compared to other potential additives such as ethanol. The two programs established to regulate oxygenate use are as follows: 1) the Oxygenated Fuels Program (OXY) in which gasoline must contain 2.7 percent oxygen by weight during the cold season in areas that fail to meet NAAQS for carbon monoxide, and 2) the Reformulated Gasoline Program (RFG) in which gasoline must contain 2.0 percent oxygen by weight year-round in areas which have the highest levels of tropospheric ozone. As a result, MTBE use is higher in colder and more densely populated regions like the Northeast.

However, increased use of MTBE has resulted in extensive groundwater contamination because of its soluble properties making it costly and difficult to remove from the groundwater. The largest source of MTBE contamination is thought to be from leaking underground storage tanks. The health impacts of MTBE contaminated groundwater are not fully understood but its presence causes poor taste and odor in drinking water which is a major concern for public water suppliers. As a result, a number of states, including New Hampshire, have opt-ed out of the Reformulated Gas Program and have banned the use of MTBE as a gas additive as of January 1, 2007. Other states, including Vermont, who are not required to use oxygenates have voluntarily used them in the past and are now banning their use as well as of January 1, 2007.

MTBE is likely to be phased out over the next decade as a gasoline additive through both federal and state legislation. However, its extent and pervasiveness as a groundwater contaminate pose a major problem for public water supplies in states like Vermont and New Hampshire who have existing MTBE groundwater contamination.

A review of the available MTBE case law suggests some degree of MTBE cleanup and remediation will be handed through litigation and settlement suits against responsible parties. A recent multi-district litigation case has set precedent indicating that the Clean Air Act Amendments do not preempt state tort over MTBE contamination. Furthermore, case law indicates that these parties include not only parties responsible for petroleum spills and leaks but also MTBE producers and refiners who can be held liable for producing a defective product that contaminates the groundwater without warning the public about its potential risks. As a provision that would have granted a liability waiver for the MTBE industry failed in the 2005 Energy Policy Act, the use of liability suits by states, municipalities and individuals to cover cleanup costs is likely to continue. Lastly, case law suggests that states have jurisdictional standing over municipalities in filing suits against the same defendants.

Remediation and cleanup of MTBE groundwater contamination must focus on both cleanup of existing contamination in water supplies as well as addressing priority point source prevention. Public system wells in urban areas are the most vulnerable to contamination by MTBE and should be a priority for state and municipal governments in MTBE cleanup and remediation. Funding for MTBE cleanup in public water supplies is limited, but available through the Clean Water State Revolving Fund as well as other state-based funds such as New Hampshire's Gasoline Remediation and Elimination of Ethers Fund.

Monitoring and cleanup of leaking underground storage tanks is a priority for the prevention of future MTBE contamination. At both the state and federal level, adequate funding exists for petroleum spill prevention and cleanup. However, understaffing of cleanup programs in both New Hampshire and Vermont appear to be a barrier in completing cleanup at leaking underground storage tank sites. A reallocation of funding would likely increase site cleanup success ultimately reducing MTBE groundwater contamination in the future.

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