MTBE clean-up costs linger despite US phase-out

28 April 2010 21:46  [Source: ICIS news]

ATLANTIC CITY, New Jersey (ICIS news)--The gasoline additive methyl tertiary butyl ether (MTBE) was phased out of the US gasoline pool years ago, but groups were still fighting over who should pay the cleanup costs, a partner with an insurance firm said on Wednesday.

"They're still trying to figure out who is to blame for the cost of cleaning it all up," said Dave Resch of DANA Insurance and Risk Management.

He said it was not unusual for insurance companies that offered $1m (€760,000) in policy coverage to get stuck with cleanup costs in excess of $2m.

The US government mandated the use of MTBE in several states and populated areas back in the late 1970s as an octane booster for gasoline, but its use was phased out in 2005 in favour of corn-based ethanol.

When MTBE was discovered in several water tables in California and other states, the government passed rigorous standards for underground storage tanks via the 2005 Energy Policy Act.

MTBE's phase-out was not explicit in the policy, as original plans for the legislation were to limit the liability for MTBE producers. Instead, the legislation enacted ethanol as the oxygenate of choice.

Resch said he saw court cases carrying on for several years.

($1 = €0.76)

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By: Steven McGinn
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