Firms must pay for MTBEcleanup

The Senate on Friday blocked approval of an energy bill to provide oil companies protection from paying groundwater cleanup costs related to MTBE, a gasoline additive banned at Tahoe since 2001.

The Senate stymied the bill the same day oil companies announced an agreement to pay Santa Monica hundreds of million of dollars to remove MTBE from five drinking wells.

South Tahoe Public Utility District was the first water provider in the country to settle a slew of lawsuits it filed because the additive contaminated 12 district wells. Since the suits were settled in 2002, MTBE has been detected in two more wells.

Lawyers for the district argued that gasoline containing methyl tertiary butyl ether - an oxygenate derived from petroleum that makes gasoline burn cleaner - was a defective product because it pollutes groundwater.

Oil companies settled with the district for $69 million. The district netted about $35 million. So far about $3 million from the settlement has gone to MTBE treatment.

"We're ecstatic," said Dennis Cocking, spokesman for the district, regarding the Senate vote. "I think it's really quite a victory.

"But it's not quite done yet. They still have (this) week to fashion some way to bring this up or down. Although there are a lot of provisions in the energy bill, MTBE seems to be one single issue that polarized and provided enough votes."

The bill includes hundreds of provisions for energy and related industries, including $23.5 billion in tax breaks and a proposal to phase out use of MTBE, a suspected carcinogen, across the nation.

The bill also calls for doubling the use of ethanol, a corn-based fuel additive already sold in gasoline at Tahoe and other places. It would replace MTBE and help oil companies meet federal mandates required since the Clean Air Act passed in 1990.

Republican leaders on Friday fell two votes short of cutting off debate blocking the bill and were forced to scramble in search of changes that might keep the measure alive.

"This will not be the last vote on this bill," promised Majority Leader Bill Frist, R-Tenn. "We're going to keep voting until we pass it and get it to the president."

The safe-harbor language for oil companies regarding MTBE was included in the bill at the insistence of House Majority Leader Tom DeLay of Texas.

MTBE has contaminated drinking water supplies in at least 28 states. Proponents of the safe-harbor language argue that it would not eliminate all MTBE related lawsuits.

"What are they talking about?" said Frank Maisano, a spokesman for petroleum interests, in a released statement.

"In reality, the MTBE provision does not 'wipe out' even a single lawsuit in any region or state of the United States. All the provision would do is weaken or eliminate the defective products claims in these suits while allowing the vast majority of claims to continue. There is not one, single case that only alleges product defect claims."

- Associated Press contributed to this story