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Uncle Sam Owes Exxon|for Major Cleanup

HOUSTON (CN) - Uncle Sam owned plants built to supply jet fuel and rubber for World War II, so it must pay current owner Exxon Mobil for the cleanup, a federal judge ruled.

During World War II and the Korean War the U.S. government tapped oil companies to ramp up production of high-octane jet fuel, synthetic rubber and toluene, a key component of TNT, for military use.

Among the refineries contracted to produce jet fuel were one in Baton Rouge, La. and another in Baytown, Texas, which were subsequently acquired by Exxon Mobil.

Starting in the early 1940s, the government bought land next to the refineries and leased land within the refineries to build plants to make synthetic rubber, jet fuel ingredients, toluene and other materials, according to U.S. District Judge Lee Rosenthal's June 4 ruling.

Some of the hazardous waste from the refineries and chemical plants was diverted into the Houston Ship Channel and Mississippi River, tributaries of the Gulf of Mexico.

With the nation focused on subduing Nazi Germany and its Japanese allies, environmental stewardship took a back seat to wartime production.

Congress finally addressed the contamination left behind in 1980, in the Comprehensive Environmental Response, Compensation and Liability Act, which requires owners to clean up polluted sites.

The law hit Exxon squarely in the pocketbook.

Exxon estimates it has spent more than $30.5 million cleaning up the Baton Rouge complex, and another $41.7 million on the Baytown site under a settlement with Texas.

Exxon sued the federal government in 2010 and 2011, seeking to hold it liable for past and future remediation costs at the sites.

"The two cases have proceeded on a coordinated basis," Rosenthal wrote.

At bottom, the litigation shakes out to questions of ownership and management. Exxon claims that as a prior owner and operator, Uncle Sam is liable for cleanup costs.

The government claims it's not liable because Exxon's predecessors operated the refineries and plants.

Rosenthal came down in the middle Thursday in an 84-page ruling . She let the government off the hook for pollution from the refineries: "The court rules that the United States did not operate either the Baytown or Baton Rouge refineries during either World War II or the Korean War."

The plants are a different matter. "Because the government admits ownership of the plants, the United States is liable as a 'covered person' for an equitable share of the qualifying cleanup costs," the George H.W. Bush appointee wrote.

Rosenthal said allotment of fault and corresponding costs will be determined in an upcoming phase of the case.

In spite of the ruling Exxon maintains the government should help cover the refinery pollution cleanup.

"We are disappointed with portions of the court's ruling relating to the refineries. We were complying with the government's directives to manage these facilities in an effort to win World War II and believe the government does bear a proportionate responsibility for all cleanup costs," Exxon spokesman Todd Spitler said in an email.

A Justice Department attorney did not respond to a comment request.

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