Bloomberg News

Exxon, Chevron Sued by Pennsylvania Over Gas Additive

June 20, 2014

Exxon Mobil Corp. (XOM:US) and Chevron Corp. (CVX:US) were among oil companies accused by Pennsylvania of polluting groundwater with a gasoline additive in lawsuits similar to ones brought by New York City, New Hampshire and Vermont.

BP Plc (BP/) and Citgo, the Houston-based unit of Venezuela’s state-owned Petroleos de Venezuela SA, also were named in two complaints made public today in state court that seek damages for costs to clean up groundwater tainted by Methyl Tertiary Butyl Ether, or MTBE. Pennsylvania Attorney General Kathleen Kane and Governor Tom Corbett’s office of general counsel filed the complaints.

“MTBE-related spills over the past 20 years have cost Pennsylvania hundreds of millions of dollars,” James Schultz, the governor’s general counsel, said yesterday in a statement. “We cannot take the health of Pennsylvania’s waters for granted and their protection must remain our utmost priority.”

The Pennsylvania lawsuits follow scores of claims filed by cities, states and individuals around the U.S. against oil refiners, retailers and distributors over MTBE. Exxon Mobil, Chevron and BP were among two dozen U.S. refiners sued this month by Vermont Attorney General William Sorrell.

The U.S. Supreme Court in April upheld a jury’s $104.7 million damage award against Irving, Texas-based Exxon Mobil for contaminating New York City wells with the additive.

Clean Air

The city sued oil companies in 2003, alleging they knew the additive would pollute groundwater. Exxon Mobil argued that state laws were pre-empted by the federal Clean Air Act, which required oil companies to reformulate gasoline to reduce air pollution from vehicle emissions. Oil companies added MTBE to make the fuel burn more efficiently.

Reasonable alternatives to MTBE were available at the time oil companies jointly promoted gasoline with the additive, Pennsylvania claims in its lawsuit.

Braden Reddall, a spokesman for San Ramon, California-based Chevron, said the company hadn’t yet seen the suit and couldn’t comment.

“BP acted at all times in good faith,” said Scott Dean, a spokesman in Houston for the London-based company. “BP plans to defend itself against the allegations.

Todd Spitler, an Exxon Mobil spokesman, said the company is reviewing the claims, although ‘‘such litigation is flawed in that energy companies are being held liable not for spilling gasoline, but for simply including oxygenates in gasoline as required.’’

Second-Guessing

‘‘If a company spills gasoline in Pennsylvania, it is required to clean it up, as should be the case,’’ Spitler said. ‘‘These cases are about second-guessing decisions made by state and federal regulators to rely on MTBE-blended gasoline to reduce air pollution. We take very seriously our responsibility to operate in an environmentally sound manner.’’

Fernando Garay, a Citgo spokesman, didn’t immediately return an e-mail seeking comment.

Pennsylvania wants the companies held liable for manufacturing a defective product, creating public nuisances and negligence. The complaint also seeks punitive damages for ‘‘wanton, malicious, oppressive and fraudulent conduct,’’ according to the filing.

The case is Commonwealth of Pennsylvania v. Exxon Mobil Corp., 140602881, Court of Common Pleas of Philadelphia County (Philadelphia).

To contact the reporters on this story: Edvard Pettersson in Federal court in Los Angeles at

epettersson@bloomberg.net; Sophia Pearson in federal court in Philadelphia at

spearson3@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider, Fred Strasser


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $104.39 USD
    • 0.14
    • 0.13%
  • CVX
    (Chevron Corp)
    • $134.57 USD
    • 0.69
    • 0.52%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus