The City of Santa Monica has reached an agreement with a consortium of oil companies that will streamline construction of a new water treatment system as part of the city’s quest to restore its drinking water.

Shell, Chevron and ExxonMobil have agreed to pay the city $131 million, which allows the city to fully fund the companies’ current obligations to construct a water treatment plant for water produced from the city’s Charnock Well Field in Mar Vista.

The money will also allow the city to pay for replacement water until the treatment plant begins its operation and to maintain and monitor regional test wells as well as perform other related tasks.

The city will now assume sole control of the design and construction of the system.

Previously, the city and the companies had jointly managed the plant design and construction, which was to be paid for by the companies.

The new facility is tentatively scheduled to open in 2012.

Since 1996, Santa Monica drinking water has been imported from the Metropolitan Water District at the expense of the companies, after the discovery of MTBE (methyl tertiary-butyl ether), an oxygenate designed to make gasoline burn cleaner, in the aquifer supplying the Charnock Well Field.

In 2003, the city and the oil companies reached an agreement (with the concurrence of local, state and federal regulators) jointly to design and construct a new treatment facility to remove MTBE and related petroleum compounds from Charnock water.

Both the city and the companies believe that their newly announced agreement will better serve their interests and allow for a more efficient resolution of the city’s cleanup needs.

“The city is pleased with the settlement,” said Santa Monica Mayor Richard Bloom. “It means that the citizens of Santa Monica will regain control over one of our most precious resources.”

Charnock Technical Advisory Group representative Brad Boschetto said, “We’re pleased to have worked with the city to reach an agreement that allows the city water independence far into the future as well as full control over its own public works projects.”

Charnock Technical Advisory Group is the oil company consortium that has been working with city staff on the treatment facility.

Charnock Well Field wells were contaminated in 1996. Five of the city’s 11 wells were affected and all five were at Charnock.

The wells were contaminated when underground gasoline storage tanks and pipelines leaked the toxic gasoline additive MTBE.

MTBE was designed as a gasoline additive first as a substitute for lead in gasoline and later to boost fuel performance and reduce emissions.

The colorless chemical compound, which smells and tastes like turpentine even at low levels of concentration, is a suspected carcinogen. It has been used in California since 1986.

Due in large part to public awareness of the loss of Santa Monica’s drinking water, MTBE has been illegal to use in California since 2004.

Craig Perkins, director of environmental and public works management for the City of Santa Monica, appeared on a January 2000 segment of the CBS news program Sixty Minutes to describe the issues the city’s water division faced.

The segment highlighted other cities and regions across the U.S. that have found they also have their own problems with MTBE contamination.

Former California Governor Gray Davis ordered that the use of MTBE as a gasoline additive be phased out in the state. Other states have followed this action.

Through routine testing of its water supply, Santa Monica city officials detected MTBE contamination at Charnock Well Field.

Soon after, the wells were closed. Santa Monica city officials believe there was probably “very little public exposure” and are not aware of any related health problems in residents.

In June 2000, the City of Santa Monica filed a lawsuit against 18 oil industry companies, including refiners, manufacturers, owners, operators and suppliers responsible for contaminating city water with MTBE.

In November 2003, an agreement was reached with Shell, Chevron and ExxonMobil to settle the lawsuit. A separate settlement agreement was reached with other companies in the oil industry.

The three oil companies agreed to pay for all costs to construct, operate and maintain a water treatment plant.

The cleanup costs, which could exceed several hundred million dollars, will come entirely from the three companies.

Additionally, these companies agreed to pay the city $92.5 million to cover out-of-pocket costs and other needs, such as continued water quality improvement and water security.

Since the 1920s, Santa Monica has supplied a large part of its residents’ water needs with its own wells.

As recently as 1995, the city was nearly self-sufficient and relied on imported water supplies for only 20 to 30 percent of its water.

In the aftermath of the 1994 Northridge earthquake, well water was the sole drinking source for Santa Monica residents.

“For over 75 years, Santa Monica’s water was safe and reliable,” said City Councilman Ken Genser at the time the lawsuit was filed. “Now, thanks to the oil industry, the city can no longer use most of its drinking water.”

Ninety percent of Santa Monica’s water is now imported over 400 miles from the Sacramento Bay Delta in Northern California and the Colorado River.

Ten percent is still supplied from groundwater wells in and around Santa Monica.

Water must be imported because Southern California is an arid region that receives an average of 12 inches of rain per year and local water resources have been tapped out.

Santa Monica residents use an average of 144 gallons of water per day. The average daytime visitor use is 60 gallons per day. The average use per day citywide is 13.2 million gallons.

The Charnock Well Field may be cleaned up in ten or more years after a water treatment facility is constructed.

MTBE is more difficult to remove from water supplies than other contaminants because its nature is to spread throughout the contaminated area as it “blends” or mixes nearly completely into water.

This characteristic poses technical challenges to the cleanup process.

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