The Collision of MTBE and NRD in New Jersey

The Situation

The New Jersey Department of Environmental Protection (NJDEP) recently filed a natural resource damage (NRD) complaint against a long list of petrochemical companies who previously provided the state’s gasoline supply. The suit is specifically targeted at alleged releases of methyl tertiary butyl ether (MTBE), a fuel oxygenate approved by U.S. EPA in 1979 and added to gasoline to reduce combustion emissions.

MTBE contamination primarily impacts groundwater after accidental releases. NJDEP has set a health-based primary maximum contaminant level (MCL) of 70 ppb for drinking water. Several states have previously sued suppliers of reformulated gasoline for exceedances of this standard.

NRD claims have traditionally focused on both lost ecological and human use services. Claims for non-NRD damage resulting from MTBE in New Jersey and other states have previously focused on groundwater and human health effects. This recent NRD claim, however, is not limited to injuries to groundwater resources. Now for the first time, damages associated with MTBE releases are being claimed for injuries to surface waters and ecological resources. The state is claiming compensatory damages for the lost interim value of the water as well as a long list of other damages ostensibly related to the discharge of MTBE.

Background

MTBE in Groundwater

The presence of MTBE may significantly increase the footprint of the many alleged gasoline releases in New Jersey. A typical plume for a gasoline release from a service station is less than one acre, based on the area exceeding the groundwater criterion for benzene. However, when based on MTBE, the plume size may cover a much larger area, because the concentration of MTBE in gasoline is higher than that of benzene, MTBE is much more soluble in groundwater, and MTBE has a slower degradation rate than benzene.

NJ Groundwater NRD Formula

NJDEP has developed a formula (now commonly known as the “New Jersey formula”) for determining damages to groundwater for settlement purposes. While the formula is simple, it may overestimate actual damages. To use a specific example, a TCE spill in 1986 created a 252-acre plume. Using the New Jersey formula, groundwater damage was calculated to be $765,000. Using more realistic methods to calculate the actual volume of water that flows through the plume, the volume affected was much smaller than predicted by NJDEP’s formula, and potential damages decreased to $496,000. If damages are based on actual service loss, as they should be in NRDA, they are even lower. In this case, the TCE spill affected several water supply wells; however, the number of wells affected by the plume at any one time changed as the area of the plume grew and shrank. Using 178 gallons/day as the assumed household water use, tabulating the number of households affected each year, and calculating the present value of the volume of water that could not be used (the lost service), groundwater damage was $27,384, approximately 3.5 percent of what was calculated using the New Jersey formula.

The rate of release of a chemical from the fuel is inversely proportional to its solubility, which is usually inversely proportional to the amount of sorption

Technical Challenges

While the mere presence of a listed contaminant in groundwater in excess of the drinking water standard had previously been the basis of most NRD groundwater claims, the scientific assessment of damages to groundwater is far more technically complex. Extending the damage claims to surface water and ecological resources raises a number of important technical issues and questions that will need to be addressed.

Groundwater - Surface Water Interactions

Groundwater-surface water interactions are complex. NRD claims may assume that if groundwater is injured then the nearby surface waters must also be injured. This assumption overlooks several important processes, especially in the case of MTBE. As a worst case, groundwater can be the sole source of water to wetlands, seepage lakes, and first order streams, emerging from the ground with MTBE undiluted. However, the threshold for ecological effects of MTBE is much higher than the state’s drinking water MCL (70 ppb), so actual effects on aquatic organisms are unlikely. Furthermore, microorganisms that degrade MTBE are naturally abundant in sediments and aerated surface waters. In more realistic and typical cases involving larger streams, the flux of groundwater to overlying surface water is small compared to river flow. Considerable dilution is achieved quickly. MTBE also volatilizes from surface water to air. In tidal waters, the phenomenon of “tidal pumping” must be taken into account as this transport route may, in some cases, further dilute MTBE in groundwater before it influences surface waters.

Limited Data on Ecotoxicity of MTBE and Its Degradation Products

While much has been written on potential human health effects of MTBE, far fewer reliable and applicable data are available on the potential toxicity of MTBE to specific ecological receptors (e.g., fish, birds, mammals). Available data indicate that appropriate acute and chronic aquatic toxicity thresholds are approximately 150 ppm and 50 ppm, respectively, values that are one thousand times higher than the drinking water MCL. Data are also limited on the ecotoxicity of MTBE’s principal degradation product, tertiary butyl alcohol (TBA), which is included along with MTBE in the NRD complaint. However, it is known that TBA is less toxic to ecological receptors than MTBE. Further, MTBE does not bioaccumulate and is rapidly excreted, unlike, for example, PCBs and mercury, whose persistence in fish tissue is a common NRD issue. Available toxicity data suggest that, at commonly observed environmental concentrations, MTBE should not be toxic to aquatic life. Given the expected low concentrations of MTBE in surface water, its relatively low ecotoxicity, and lack of bioaccumulation, there is low potential for adverse ecological effects from exposure to MTBE.

Restoration Options

The preferred approach to settlement of NRD liability is to provide restoration of the injured resource rather than to pay monetary damages. In other NRD claims, restoration often takes the form of wetland creation, aquatic habitat enhancement, fish stocking programs, and other approaches that depend on the specific site. Restoration of damaged groundwater in New Jersey typically involves setting land aside in the same drainage basin to create recharge zones free from future development. Given the potential scope of the MTBE NRD claim and expected limited impact to surface waters, a lack of available land in the densely populated region may limit this restoration approach and other restoration approaches may need to be considered.

Causation and Baseline: Beware

Plaintiffs and regulators will often attribute alleged natural resource injuries to a contaminant regardless of a causal linkage. The rules of NRDA, however, require that a linkage (causation) between contaminant and alleged injury be demonstrated. The rules also require that the environment be considered on a “but for the release” basis. In other words, a defendant cannot be held responsible for a reduction in service of a natural resource if that reduction is likely the result of other natural or anthropogenic causes. In the highly industrial and commercially developed climate in most areas of New Jersey, many other factors and a host of other industrial chemicals unrelated to MTBE releases will greatly complicate the determination of the causality of injury from any single contaminant such as MTBE. The baseline factors are critical elements in a valid NRD claim.

Summary: Need for a Technically Based Strategy

NRD claims need to be based on sound science and linkages of a source to the injured resources being claimed. While MTBE injury to groundwater may be demonstrated through simple comparisons of MTBE concentrations to drinking water standards (MCLs), translation of groundwater contamination to surface water and ecological resource injuries requires generation of a far stronger and more complex set of data and use of good science. Therefore, it is challenging to develop a well-founded NRD claim for resources beyond groundwater and to mount a strong defense of such a claim. Ample data on the chemical baseline, hydrogeology, and transport and fate elements relating to linking groundwater and surface water, the application of ecotoxicological benchmarks and/or fundamentals, and the use of defensible and realistic models to calculate damages, all must be considered as part of a valid claim and/or a sciencebased defense of New Jersey’s MTBE NRD complaints.