MTBE stinks. Literally. It smells like rotten eggs. MTBE has a terrible odor that permeates through water in tiny quantities. Nobody with a nose will drink water with trace amounts of MTBE in it. Although there is no evidence that MTBE is harmful when ingested by humans, a water supply contaminated by MTBE is undrinkable because of the smell.

MTBE became a widely used gasoline additive fifteen years ago to meet the requirements of the Clean Air Act. MTBE, a product
that was once considered good for the air is now considered bad for the ground. Nineteenth century German politician Otto von Bismarck said, “laws are like sausages, it is better not to see them being made.” Now we need a new law to correct the errors of the current law that was instituted a while ago with all good intentions. Some things never change.

It is time for MTBE liability reform. There is confusion and misunderstanding about who is responsible for MTBE spill cleanups. There are wild estimates of total known clean-up costs, ranging from $2 billion to $30 billion. One federal court found MTBE to be a “defective product,” which means that all participants in the chain of supply could be liable for virtually unlimited damages.

The situation is on the verge of getting way out of hand. That is why we need legislation that clarifies MTBE liability. When there are conflicting, confusing and unsubstantiated claims flying around, it becomes necessary for legislation to resolve the matter. We need balanced legislation that addresses the interests of all Americans.

Clarification of MTBE liability is critical to an energy policy that embraces the obvious fact that gasoline is our primary motor fuel. To deem a common gasoline additive a “defective product” is one small step from deeming the fuel that runs America’s cars a defective product. Managing gasoline and MTBE liability makes sense. It makes sense for spillers to be responsible for cleaning spills. It does not make sense for the merchants and producers of gasoline to be targeted by lawyers and plaintiffs who are motivated entirely by greed.

In 2000, our need for a comprehensive energy policy was a key tenet in George Bush’s presidential campaign. Five years later, Congress is trying once again to put an Energy Bill on the president’s desk. H.R. 6, which passed the House of Representatives in March of 2005, is essentially the same legislation that passed the House twice before. The challenge in 2005 lies in the Senate, where the biggest obstacle is the issue of MTBE liability reform.

The SIGMA board of directors has concluded that an Energy Bill without MTBE liability fairness renders an unacceptable threat to the gasoline business. The threat is real, involving over 150 cases brought by trial lawyers against gasoline marketers so far, and potentially huge. The threat of MTBE liability is the potential that, if the law generally recognizes MTBE as a “defective product,” then the disproportionate expense of paying liability claims will arbitrarily thin the ranks of gasoline marketers and producers alike.

SIGMA’s board has resolved to do whatever is necessary, including seeking additional revenues to augment existing federal LUST Trust Fund to cover MTBE cleanup costs, to prevent this outcome. There is a legislative solution to MTBE liability. An appropriate, measured response to MTBE spills is possible. And it belongs in our national energy policy.