New Jersey water suppliers will share in settlement

More than a dozen water suppliers in New Jersey likely will share at least $67 million as part of a national settlement with oil companies over drinking water contamination caused by the fuel additive MTBE.

The chemical, methyl tertiary butyl ether, was added to the nation's gasoline supply beginning in 1979. It was used to raise octane levels so vehicle engines would burn cleaner and emit less pollution.

But MTBE, which is highly soluble and a possible carcinogen, began to show up in groundwater not long after, mainly due to leaking underground storage tanks at gasoline stations. The first documented case was in Rockaway, N.J., in 1980.

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.

As other suits streamed into other state courts, he said, the oil companies were able to get them consolidated in a federal court in New York established to hear MTBE cases nationwide.

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 lead attorneys termed the $422 million total the largest MTBE settlement to date.

ExxonMobil and Lyondell Chemical Co. did not settle.

McGovern issued a news release on the New Jersey settlement yesterday, saying he wanted to alert other water suppliers in the state that had dealt with the contamination.

McGovern said that as he was preparing the state litigation in 2003, the U.S. Senate was considering legislation that would absolve oil companies of liability in MTBE claims, so he had to file the case before that happened. The legislative move failed.

McGovern ultimately represented 16 companies, including New Jersey-American Water Co. and municipal water suppliers in Penns Grove, Bridgeton, Camden, Gloucester City, Little Egg Harbor, Toms River, Point Pleasant and Mount Laurel.

The water suppliers he represented spent considerable sums, he said, either installing equipment to filter out MTBE or closing wells and drilling new ones.

Lindel Jones, spokeswoman for New Jersey-American, said yesterday that air strippers were used to filter out MTBE in places where it was found, but that she did not know the cost.

Because the court is still validating the settlement, McGovern said, it is not clear how much the municipal systems he represents will get. They will share in the $40 million to $45 million total, he said.

The Princeton law firm Lieberman & Blacher represented Vineland, which has disclosed it will receive $10 million, and Montclair, in North Jersey.

The suits contended that the chemical companies overstated the environmental benefits of MTBE and understated or concealed the environmental harms.

New Jersey has banned use of the additive starting in 2009. Pennsylvania has not, according to the lead law firm, Baron & Budd PC of Dallas. The firm said the Northampton (Bucks County) Municipal Authority would also share in the settlement.

Southeastern Pennsylvania has several hundred sites contaminated with MTBE, according to the state Department of Environmental Protection. A 2003 study showed that 21 percent of "ambient" groundwater samples had detectable levels of MTBE.

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