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    MTBE Suit Settled

    ExxonMobil, ChevronTexaco agree to pay a combined $60 million to California city.

    LOS ANGELES -- Two major oil companies agreed to build a water treatment plant to clean up polluted groundwater in wells owned by the city of Santa Monica, Calif., at a cost of as much as $200 million

    In a tentative settlement to a two-year-old lawsuit, San Francisco-based ChevronTexaco Corp. and Irving, Texas-based Exxon Mobil Corp. each agreed to pay $30 million in cash and foot the full cost of building and running a water treatment facility to clean the gasoline additive MTBE and other contaminants from the wells, Reuters reported.

    In return, Santa Monica will drop the companies from its lawsuit filed in 2000 against a group of oil manufacturers, suppliers, refiners and owners and operators of pipelines and other facilities for allegedly contributing to the pollution.

    The tentative agreement, which must be approved by the court, also states that the two companies may be repaid a portion of those costs if the city settles with any of the other companies named in the suit, the report said.

    Chevron officials denied responsibility for the well contamination but said the company was "strongly concerned about the need to work cooperatively ... to resolve this issue." Chevron spokesman Rod Spackman said litigation would have been "expensive and counterproductive," explaining the company preferred to focus on "developing an effective solution to city's water needs."

    The city asserts that MTBE-laced gasoline leached from underground pipelines and storage tanks at service stations into wells that supply most of the beachside city's drinking water. The wells in West Los Angeles, which the city has owned for nearly a century, were closed in 1996 after the potential carcinogen was discovered.

    An oxygenate added to U.S. gasoline since 1979 to cut air emissions, MTBE has been banned in several states. California Gov. Gray Davis has ordered the additive phased out by the end of 2003.

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