ConocoPhillips to Pay $39M in New Jersey Contamination Case

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By John Herzfeld

ConocoPhillips Co. will pay $39 million to settle its part of a long-running lawsuit by New Jersey claiming environmental damages from groundwater contamination by the gasoline additive MTBE, state Attorney General Christopher S. Porrino announced May 25 ( New Jersey DEP v. Atlantic Richfield Co. , S.D.N.Y., No. 1:08-cv-00312, settlement 5/23/17 ).

The settlement with the New Jersey Department of Environmental Protection was among the largest reached in a case originally filed in state court in 2007 against nearly 50 oil and chemical companies that manufactured, blended, or distributed methyl tertiary butyl ether used in gasoline. It was approved May 23 by Judge Vernon S. Broderick of the U.S. District Court for the Southern District of New York.

The lawsuit, which alleged MTBE contamination of groundwater at some 5,000 sites throughout the state, has resulted in nearly $157 million in settlements, Porrino said. It sought recovery of damages and cleanup costs under the New Jersey Spill Compensation and Control Act.

New Jersey is among several states, municipalities, and water districts that have sued oil and chemical companies over contamination by MTBE, which hasn’t been used since 2006 but leaked from gas stations for decades.

A bid by Exxon Mobil Corp. to overturn a $236 million MTBE contamination verdict in New Hampshire ended in May 2016 when the U.S. Supreme Court denied review of its unsuccessful appeal of a jury verdict. ExxonMobil also lost a 2013 appeal of a $104.7 million damage award for MTBE contamination in New York City.

Past settlements in the New Jersey case included agreements with Hess Corp. ($35.5 million), Citgo Petroleum Co. ($23.25 million), and Valero Energy Corp. ($17.5 million).

No Liability Admitted

The settlement, which the two sides said was reached to avoid prolonged litigation, included no admission or findings of liability.

A ConocoPhillips spokesman, Daren Beaudo, said in a phone interview May 25 that although the company is the named defendant in the settlement, the agreement was reached and signed by Phillips 66 Co., which was spun off from ConocoPhillips in 2012. The liabilities for the downstream business, including MTBE liabilities, went to Phillips 66, he said. The downstream business includes refineries, chemical plants, pipelines and retail brands.

A Phillips 66 spokesman, Dennis Nuss, said in a statement that the company “is committed to the highest ethical standards and takes seriously our responsibilities to the communities where we live and work.” The case, he said, was settled “on terms mutually acceptable to both parties.”

For More Information

The settlement is at http://src.bna.com/pfa.

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