Republican Energy Bill Blocked Over MTBE Lawsuits
The energy bill was blocked by Democratic opposition led by Charles Schumer, D-N.Y, joined by a few Republicans from northeast states where groundwater contamination has become a major political issue. The Republicans have vowed to bring the legislation up for another vote as early as Monday. Provisions shielding makers of MTBE from product liability lawsuits were one of the main reasons the bill was blocked.
MTBE (methyl tertiary butyl ether) is a gasoline additive that reduces air pollution and smog and increases the level of octane in gasoline, and does so more cheaply than some of the alternatives such as ethanol. Leaks of the chemical have contaminated drinking water in at least 28 states. The EPA says low levels of the chemical are not harmful, although the agency sets no national standard for what constitutes a safe level of the chemical. According to the EPA the additive is a "potential human carcinogen at high doses". The agency states 20 to 40 ppb is probably safe although it admits, "It is possible your water would taste and/or smell like turpentine" at or above those levels. Levels of as high as 610 ppb have been found in the water supplies of some cities, leading to lawsuits against the producers of the product. MTBE contamination can be cleaned up but it is, again according to the EPA, "difficult and time consuming" to do so.
There are large sums of money at stake here. The city of Santa Monica, CA had two of its major sources of drinking water rendered unusable by MTBE contamination. The corporations responsible settled on Friday with the city and agreed to pay hundreds of millions of dollars to clean up the contamination. The passage of the energy bill would prevent cities such as Santa Monica from proceeding with product liability lawsuits against the corporations responsible for MTBE contamination if it was found they acted irresponsibly, as it has in fact been found in other court cases.
For example, in the recent South Tahoe case, corporations were found to have lied about the ability of MTBE to contaminate groundwater. The companies were found by the court to have acted with malice. After the jury returned those findings, the energy companies settled for 28 million dollars rather than face the damages phase of the trial. The energy bill would block such lawsuits. The law would also be applied retroactively, which would reverse some of the recent decisions against the makers of MTBE, many of whom are located in Texas.
Protection from liability for their actions is not the only benefit MTBE producers would receive under the bill in question. 2 billion dollars would be provided to producers of MTBE to facilitate their move to other products before a nationwide ban on MTBE becomes effective in 2014 (some states already ban the chemical from being used as a fuel additive). They would be able to continue to market the chemical in the interim, while being protected from liability for their actions even if they are found to have acted with malice.
The energy bill that contained the liability protection clause was written behind closed doors by a solely Republican committee. This continues the administration's policy of secrecy and lies regarding its energy policy. The bill is 1000 pages of bigger government that will cost 31 billion dollars over the next 10 years. The MTBE provisions of the bill draw into sharp focus a few of the attributes that have defined this administration.
Over and over again, the Republican administration has advocated policies that socialize risks and costs while privatizing corresponding profits. The energy bill would leave homeowners and local governments to bear the costs of pollution that is caused by corporations that act with incompetence or malice, while allowing energy companies to profit from those actions. In addition it would socialize the costs of developing new products for those companies. The companies will keep the profits from those new products, of course.