CA: Trade panel rejects Canadian firm's challenge to Calif MTBE ban

AP on Bakersfield Californian ^ | 8/9/05 | Terence Chea - AP

[NormsRevenge]

SAN FRANCISCO (AP) - A trade tribunal has rejected a Canadian company's challenge to California's ban on the gasoline additive MTBE under the North American Free Trade Agreement.

Methanex Corp., which produces an MTBE component called methanol, had filed a $970 million claim against the United States under NAFTA six years ago. The Vancouver-based firm claimed the state ban was aimed at removing foreign competition for American makers of ethanol, a potential substitute for MTBE, or methyl tertiary-butyl ether.

The U.S. State Department has not officially announced the ruling and declined to comment on the case, said spokesman Steven Pike.

But Methanex, California Attorney General Bill Lockyer's office and Oakland-based Earthjustice said Tuesday they had received notification about the NAFTA trade tribunal's decision to dismiss all of Methanex's claims. The ruling should be available later this week on the State Department's Web site, according to Lockyer's office.

"Today's decision is a resounding victory for the rights of Californians to keep their drinking water safe and clean," Lockyer said in a statement. "This sends a message to all foreign investors who would challenge the environmental and labor laws that are the fabric of our democracy."

Methanex was still reviewing the tribunal's ruling and would not comment, said spokeswoman Diana Barkley.

In March 1999, Gov. Gray Davis ordered a phase-out of MTBE - a gasoline additive designed to lower air pollution - because it contaminated drinking water and studies showed it may cause cancer.

Three months later, Methanex filed a claim under Chapter 11 of NAFTA, seeking almost $1 billion in compensation for lost profits and business opportunities that resulted from the ban, which went into effect last year. Its product, methanol, is one of MTBE's main ingredients.

The Canadian firm claimed there wasn't any credible evidence that MTBE caused health problems, and that several international bodies have declined to list it as a carcinogen.

"California did not have to ban MTBE and nor did the scientific data available support such a ban," the company argues on its Web site. "The decision to ban MTBE is certainly related more to the political influence of those who produce ethanol, MTBE's and methanol's heavily subsidized competitor."

Martin Wagner, an Earthjustice attorney who wrote a legal brief supporting California's right to regulate MTBE, applauded the tribunal's decision, but warned that free trade agreements like NAFTA were undermining the United States' ability to protect public health and the environment.

"Trade agreements like this are trading away our sovereignty over our environmental protection in order to give corporations guaranteed profits," Wagner said. "This case should be a wake-up call to all Americans."

[AmishDude]

Like Kissinger said about the Iran/Iraq war: It's too bad they can't both lose.

[JustDoItAlways]

MTBE has proven to be a long-lasting chemical in the environment (too long) and has been shown to have some harmful effects on people so it should be banned.

This is the way the environmental movement should work. When a chemical is actually scientifically proven by multiple unbiased studies to be harmful, it should be taken out of the economy.

And there are lots of harmful chemicals. But the point is, when something is called a chemical, it is not automatically bad for the environment or human health.

Methanex has no point or claim. MTBE is on the list of stuff we don't need.

[Fred Hayek]

I thought Feinswine pushed for MTBE years ago.

[Carry_Okie]

This is the way the environmental movement should work.

The environmental movement is RESPONSIBLE for MTBE contamination, principally the Natural Resources Defense Council, which is primarily funded by major investors in petrochemicals and natural gas.