Source: http://www.insurancejournal.com, June 6, 2014
By: Chris Dolmetsch and Zain Shauk

BP Plc, Chevron Corp. and Exxon Mobil Corp. are among two dozen U.S. refiners sued by Vermont Attorney General William Sorrell and accused of polluting the state’s groundwater with a gasoline additive.

Sorrell filed the case Thursday in state court in Montpelier, the capital. The refiners promoted, marketed and distributed gasoline containing the additive Methyl Tertiary Butyl Ether, or MTBE, knowing that it posed “unprecedented risks” to groundwater, Sorrell’s office said in a statement.
“These companies knew years ago that MTBE was a uniquely bad actor in groundwater, and they ignored the risks and sold it anyway,” Sorrell said. “This lawsuit is about holding them accountable and ensuring that they — and not Vermonters — pay to clean up our groundwater.”
The suit is one of scores of claims filed by cities, states and individuals around the U.S. against oil refiners, retailers and distributors over MTBE. The U.S. Supreme Court in April upheld a jury’s $104.7 million damage award against Exxon Mobil for contaminating New York City wells with the additive.
New York sued oil companies in 2003, alleging they knew the additive would pollute groundwater. Exxon Mobil argued that state laws are 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 it burn more efficiently.
Exxon Statement
An Exxon Mobil spokesman, Todd Spitler, said the company is reviewing the state’s claims. The foundation of MTBE litigation is flawed because companies are being held liable for including oxygenates in gasoline that were required by Congress and approved by regulators, he said by e-mail.
“Companies that complied with the law and regulations to blend approved oxygenates in gasoline should not be held liable simply for following a government mandate,” Spitler said.
There hasn’t been a single recorded case of anyone’s becoming sick from MTBE water contamination, he said. The company takes seriously its responsibility to operate in an “environmentally sound manner” and works hard to protect the health and safety of the communities where it operates, he said.
A Chevron spokesman, Braden Reddall, said the company will “review the complaint once we are served.”
Carlton Carroll, an American Petroleum Institute spokesman, declined to comment on the suit. Diana Cronan, a spokeswoman for the American Fuel & Petrochemical Manufacturers, didn’t immediately respond to requests for comment.
State Findings
While MTBE is banned as a gasoline additive in Vermont, the state’s Agency of Natural Resources continues to oversee remediation of past releases and keeps finding new contaminated wells, according to Sorrell’s office.
The state claims violations of its Groundwater Protection Act and alleges that the refiners used MTBE as an additive despite knowing it was hazardous and would pollute groundwater, and that they failed to inform state regulators, resellers or consumers of the hazards and how to mitigate them.
The case is State of Vermont v. Atlantic Richfield Co., Vermont Superior Court, Washington County (Montpelier).