Lawsuits On Gasoline Additive MTBE Involved Over 6,000 Polluted Groundwater Sites
DEP Has Collected Over $350 Million From Other Big Oil Corporations For MTBE Pollution
DEP Provided No Data On The Number Of Chevron Sites Or The Economic Cost Of Chevron’s Pollution Damages
Chevron Settlement May Rival The Notoriously Corrupt Christie DEP Exxon Deal
The Murphy DEP recently quietly settled a very old lawsuit, initially filed back in 2007, against Chevron (and Texaco and Unocal) for polluting NJ drinking water supplies for just $175,000 (that’s not a typo! $175K!) (read the draft settlement document here).
The DEP’s public notice states: (emphases mine)
“In June 2007, the NJDEP instituted lawsuits against nearly 50 companies, alleging that those companies were responsible for contamination of waters of the State of New Jersey caused by MTBE. The defendants included MTBE manufacturers and refiners, as well as major brand marketers of gasoline containing MTBE. The defendants also included companies within the chain of distribution of gasoline containing MTBE in the State of New Jersey. The NJDEP has identified over 6,000 sites where MTBE has been detected in the waters of the State.”
The DEP public notice and draft settlement document do not provide any information about:
1) how many Chevron/Texaco/Unocal gas stations are involved in the settlement or Chevron’s market share in NJ;
2) how many groundwater pollution sites were caused by Chevron/Texaco;
3) how many public drinking water supplies and private wells were contaminated by Chevron/Texaco;
4) what the costs to the public and ratepayers was to cleanup the Chevron/Texaco pollution and/or monitor and treat polluted drinking water or to develop alternative water supplies; and
5) data or estimates of the economic damages to natural resources caused by Chevron/Texaco.
These are egregious flaws that must be corrected, because DEP’s continuing failure to conduct this work is what is causing these pathetic pennies on the dollar settlements.
DEP merely concluded and alluded to DEP’s “beliefs”, not facts and science:
“In consideration of the valuation of natural resources injured by MTBE contamination, the Chevron Settling Parties’ proportionate responsibility for that contamination, and the public trust benefits described in this notice, the NJDEP, as trustee of the public’s natural resources, believes that the proposed terms are fair, reasonable, faithful to the intent of the aforementioned statutes, and in the public interest.”
I don’t care what DEP “believes” – I care about what they KNOW and are not telling the public.
It is impossible to determine if this draft settlement is in the public interest – as required by law – but I strongly doubt that it is.
I guess that DEP felt that after environmental groups praised the BASF sweetheart NRD deal in Toms River, that anything goes. (and exactly what one would expect from a DEP led by a former corporate lawyer who successfully litigated NRD claims agains DEP:
One case LaTourette litigated, however, stands out for its harm to the environment, DEP, and the public interest. And that case is:
Alan E. Kraus argued the cause for respondent (Latham & Watkins, L.L.P., attorneys; Mr. Kraus, Kira S. Dabby, Kegan A. Brown, and Shawn M. LaTourette, on the brief).
(I even filed an ethics complaint against DEP Commissioner LaTourette for failure to disclose and recuse on that)
This Chevron settlement could actually be worse than the Christie DEP’s notorious Settlement with Exxon, where DEP settled for less than 3 pennies on the dollar of an $8.9 billion claim.
The public comment period closed on Jan. 17 and the agreement is not yet final and approved by the federal judge. I wrote to legislators to demand Legislative oversight hearings to uncover facts and expose major flaws in DEP’s “Natural Resource Damage” program that lead to these pennies on the dollar settlements, but Senate Environment Committee Chairman Smith has ignored my criticisms for years now so I don’t expect a reply. (recall that Smith created a Legislative Task Force to reform DEP’s NRD program, but the corporate polluters killed it).
Let me provide some context, to remind readers of just how corrupt the whole MTBE situation is.
Perhaps you forgot or were not aware of the issues of drinking water pollution caused by the toxic gasoline additive MTBE, a national issue that emerged over 40 years ago.
The first documented case was in Rockaway, N.J., in 1980. The Philadelphia Inquirer reported, way back in 2008, when that first case was settled:
More than a dozen water suppliers in New Jersey likely will share at least $67 million as part of a [$422 million] national settlement with oil companies over drinking water contamination caused by the fuel additive MTBE. […]
MTBE is now the most commonly found volatile organic chemical in the state’s groundwater, said Barker Hamill, who runs the Department of Environmental Protection’s safe drinking water program.
He said perhaps 10 to 15 percent of the state’s wells have detectable levels, but rarely do they rise above the state’s maximum allowable level of 70 parts per billion.
In 2003, Joseph J. McGovern, an environmental lawyer with the Marlton firm Parker McCay, filed suit in the state on behalf of 16 water suppliers.
Most of the companies, including BP Amoco, Atlantic Richfield, Chevron, ConocoPhillips, Shell, Marathon, Citgo and Sunoco, settled the case that included McGovern’s filing on May 8.
The Bergen Record did a followup story back in 2015, updated in 2017, and reported that DEP had recovered over $105 million:
New Jersey has settled with 10 companies in the case, bringing in a combined $105 million. The largest settlements include $33 million from Hess, $30 million from Lyondell and $23 million from Citgo.
Former NJ AG Grewal issued a press release updating the total to $350 million, with $196 million from new with settlements from Sunoco and BP Shell:
With the three settlements announced today, the Division of Law has obtained more than $350 million in settlements with defendant companies in the MTBE litigation.
Nationally, the Environmental Working Group tells the familiar corporate corruption story of MTBE: (at least 138 NJ drinking water systems serving 2.1 million people were polluted by MTBE, as of 2005):
The oil industry and its friends in Congress say it’s only fair to shield MTBE makers from lawsuits, because they claim that the government mandated oil companies to add MTBE to gasoline in the first place, to help clean the air. But another story is told by internal industry documents and depositions made public in the California lawsuits. The documents, provided to EWG by attorneys for the communities, show it was the oil companies themselves who lobbied hard for the MTBE mandate because they made the additive and stood to profit.
A paper trail dating back almost 25 years shows how the oil companies took an unwanted byproduct of gasoline refining that was expensive to dispose of and created a profitable market for it. Beginning in the mid-1980s, well in advance of the 1992 federal mandate to reformulate gasoline to meet the standards of the Clean Air Act, the petrochemical industry promoted MTBE to U.S. and state regulators as the additive of choice – knowing at the time that it would very likely contaminate ground water. Only much later did the companies admit that MTBE doesn’t do much to reduce air pollution after all.
MTBE settlements in other states:
California got $422 million from Chevron
https://www.sfgate.com/business/article/big-mtbe-settlement-to-benefit-california-3214558.php
Under the agreement, the oil companies will pay $422 million up front. They also agree to cover 70 percent of the cleanup costs for any of the plaintiffs’ wells that become contaminated with MTBE within the next 30 years.
New Hampshire – over $400 million and in contrast to DEP secrecy, they issued a comprehensive program and public report:
https://www.des.nh.gov/sites/g/files/ehbemt341/files/documents/2020-01/r-wmd-19-1.pdf
Rhode Island – $6 million Mobil
RI – over $18 million
Even the Christie AG got $39 million from Conoco Phillips
So, we clearly have a major problem here.
What explains the paltry DEP Chevron/Texaco settlement for just $175,000, when other gas companies settled for hundreds of millions of dollars?
How can this be?
I realize that DEP would settle the big cases first and that Chevron/Texaco may not have as many gas stations in NJ, but it sure looks like Chevron was rewarded generously by their intransigence.
It also looks like DEP has zero confidence in the legal defensibility and the scientific credibility of their NRD program.