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January 23. 2013 10:58PM

Former state environmental officer takes stand in MTBE trial

CONCORD - Attorneys for the state and ExxonMobil got to the heart of their case on Wednesday, in week two of a civil trial over statewide groundwater contamination caused by the gasoline additive MTBE.

New Hampshire's former chief environmental officer spent the day on the witness stand for questioning designed to determine what he knew about MTBE and when he knew it.

Former Commissioner of the Department of Environmental Services Robert Varney testified that he was "deeply disappointed, shocked and stunned" by internal Exxon memos from the 1980s about the dangers of MTBE, which he did not see until preparations for the trial got under way.

Under questioning by the state's lead counsel, Jessica Grant, Varney said he would never have agreed to a reformulated gasoline program with MTBE to mitigate air pollution if the oil company had shared with him the contents of those memos.

In cross-examination, ExxonMobil attorney James Quinn produced documents and a video-taped deposition by Varney suggesting that state environmental officials were well aware of MTBE's dangers, and were on record opposing an MTBE ban proposed in the state Legislature in 1999. The state eventually banned MTBE in 2007, after filing suit against ExxonMobil and 21 other oil and gas companies in 2003.

All but ExxonMobil have since settled with the state, which has collected at least $120 million in the case and is seeking approximately $245 million from ExxonMobil, based on its share of the gasoline market in New Hampshire. A settlement with Citgo is pending, and should be in the range of $25 million to $50 million. Irving Oil settled for $57 million on Nov. 19.

The Superior Court civil case now being heard before a jury in the federal court building in Concord could determine whether ExxonMobil is required to contribute to the $800 million the state estimates as the cost of testing, treating and monitoring all public and private water supplies in the state.

The state produced internal memos from Exxon environmental specialist Barbara Mickelson, who in 1985 was assigned by Exxon to lead a study into the use of MTBE as a gasoline additive to increase octane.

Mickelson and her team recommended that "from an environmental risk point of view that MTBE not be considered as an additive to Exxon gasoline on a blanket basis throughout the United States," according to documents produced in court.

She informed Exxon executives at the time that her research suggested well contamination incidents would increase three-fold following the introduction of MTBE; that contaminated plumes would spread much further and be much more expensive to clean up, given the highly soluble qualities of the ether-based compound.

When asked by Grant how he reacted to the Mickelson research when it was recently revealed, Varney responded, "To put it frankly, I was shocked; I was stunned. I felt this was significant information that was not shared with New Hampshire or other states embarking on the RFG program."

New Hampshire and many other northeastern states began using reformulated gasoline (RFG) with MTBE in the 1990s to comply with amendments to the Clean Air Act designed to reduce smog in populated areas.

"To find that the oil companies knew about this way back in 1984 was an absolute shock and deeply disappointing to me," Varney said.

Varney, who came to the NH-DES in 1989, testified that the state was not fully aware of MTBE dangers and the potential extent of contamination until studies were conducted in Maine and California in 1998. Grant then took him through a series of letters, memos and reports designed to prove that the state immediately began to engage other states on the issue and tried to obtain a waiver from the federal government to get out of the RFG program, but was denied.

Quinn produced internal DES memos, warnings by the EPA that were posted in the Federal Register, and communications among various states that he said brought MTBE dangers to the attention of policymakers in the 1980s and 1990s. He also cited an underground tank leak at a gas station in Northwood in 1987 that contaminated 11 nearby wells and an elementary school water supply with high levels of MTBE, suggesting that should have put the state on notice.

Varney testified that the early concerns cited by Quinn were not nearly as specific as the Mickelson memos, and that the Northwood incident did not play into the state's decision to participate in the RFG program eight years later.

Quinn questioned Varney's assertion that a Maine study released in 1998 contained new information that mobilized the state's opposition to MTBE. When Varney insisted that was the case, Quinn played a video of a May 10, 2011, deposition, in which Varney said in reference to the Maine study, "I don't see anything in here in terms of analysis that was particularly new information."

dsolomon@unionleader.com



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