$28 Million For Lake Pollution

A San Francisco court approved a settlement Monday under which oil companies will pay $28 million to end a case involving pollution of Lake Tahoe groundwater with the gasoline additive MTBE.

Shell Oil Co., Shell Products Co., Equilon Enterprises LLC and Texaco Inc. agreed to settle with the South Tahoe Public Utilities District and formalized their deal Monday in San Francisco Superior Court.

In April, a jury found the companies liable for pollution with MTBE, a chemical that helps fuel burn more cleanly but which the U.S. Environmental Protection Agency has said may cause cancer.

The companies maintain they aren't liable, despite the settlement.

"We felt that settling now was the best thing to do to no longer deal with protracted litigation costs," said Shell spokesman Cameron Smyth.

The utilities district sued the companies in 1998 after MTBE pollution forced it to close a third of its drinking-water wells. The south Tahoe area has shallow wells, many near gas station storage tanks, and surface runoff helped the chemical reach drinking water.

Dennis Cocking, spokesman for the district, said that the total $69 million from both Monday's settlement and prior settlements in the case should cover the cost of cleanup as well as legal fees.

"We're very gratified," Cocking said. "We achieved what we set out to achieve."

Monday's deal, approved by Judge Carlos Bea, also included a separate $300,000 settlement between the utilities district and a Tahoe gas station. Two weeks ago, Lyondell Chemical Co., once a leading producer of MTBE, agreed to pay $4 million to settle the case.

Shell Oil Products US announced in June that it would join other suppliers and stop using MTBE in gasoline sold in California by the end of 2002.


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