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2 oil companies to pay $35M in MTBE suit in NH

CONCORD, N.H. (AP) -- Two oil companies are paying the state of New Hampshire a total of $35 million to settle pending claims from a lawsuit alleging that they added MTBE to gasoline, knowing that it would contaminate ground water supplies, Attorney General Michael Delaney said Thursday.

The state, which sued the companies and others in 2003, contends they knew they were supplying a product with unique hazards — specifically, that MTBE travels father and is more difficult to clean up than other contaminants.

Shell Oil Company and Sunoco Inc. agreed to the settlement, Delaney said.

A trial against remaining defendants is scheduled to start in Concord on Jan. 7, 2013. They are Exxon Mobil Corp., Irving Oil Co., Citgo Petroleum, ConocoPhillips, and Vitol S.A.

The state is seeking damages to perform comprehensive investigation and remediation of MTBE contamination sites.

"We must ensure that our public waters remain clean and safe for the benefit of all our citizens," Delaney said. He called the settlement "a substantial recovery that will be used to clean up contaminated groundwaters throughout New Hampshire."

At the time the lawsuit was filed, some of the oil companies said when used as intended, MTBE is safe and effective, and the problem was with leaking gasoline storage tanks.

MTBE, or methyl tertiary butyl ether, is a petroleum-based additive that has been used in gasoline since the 1970s to increase octane and reduce smog-causing emissions. Since 1990, it had been used widely in states with air quality problems to satisfy a federal requirement that gasoline contains 2 percent oxygen.

While it was credited for cutting air pollution, MTBE was found in the late 1990s to contaminate drinking water supplies when gasoline is spilled or leaks into surface or groundwater.

A number of states found MTBE in groundwater near leaking gasoline storage tanks and water agencies reported MTBE found in drinking water supplies, although in most cases concentrations did not exceed EPA advisory levels.

The additive has been banned in a number of states, including New Hampshire, which has had a ban in effect since 2007.