Summary of the matter addressed in the submission:

The Submitters allege that “the State of California and/or the United States of America, has failed to enforce California’s environmental laws and regulations related to water resource protection and to the regulation of underground storage tanks (USTs); and the State of California has failed to properly protect water resources by allowing gasoline to be released into the environment from leaking USTs…and by not regulating all sources of environmental contamination.” The submission alleges that “Executive Order D-5-99 (California) requiring that Methyl Tertiary-Butyl Ether (“MTBE”) be phased-out of gasoline by no later than December 31, 2002…acknowledges the UST issue, but focuses attention on one gasoline component, namely MTBE. It thus treats a symptom (MTBE) of gasoline leakage, rather than the leakage itself, deflecting attention from the State’s failure to enforce its environmental laws. Further, by noting that MTBE poses a risk to the environment because of leaking USTs, the Executive Order also effectively admits that California has failed to enforce its environmental laws.” “Methanex Corporation…incorporated under the laws of the province of Alberta,… produces just one product, methanol, which it exports (among other destinations) to the United States for sale and distribution to U.S. refiners and other manufacturers through its U.S. subsidiaries. A major portion of the methanol exported to the U.S. is used in the production of MTBE.”

Summary of the response provided by the Party:

In its response to the consolidated Methanex-SEM-99-001 and Neste-SEM-00-002 Submissions, the United States asserts that it believes the Articles 14 and 15 process is a critical component of the cooperative efforts for environmental protection among the Parties to the NAAEC.

The Party asserts that although the U.S. Government is a firm supporter of the submission process, the Secretariat should not request authorization for development of a factual record, because the matter raised in the Submission is the subject of a pending judicial or administrative proceeding. Methanex is already challenging California’s enforcement of its Underground Storage Tanks regulations as part of its arbitration claim against the United States under NAFTA Chapter 11. The Party claims that, in accordance with Article 14.3(a) of the NAAEC, the Secretariat should proceed no further with the consideration of the submission. The Party also asserts that California is vigorously and effectively enforcing its law pertaining to underground storage tanks and water resources and that Methanex’s undifferentiated claim that the State of California is failing to effectively enforce its environmental laws relating to underground storage tanks is belied by the vigorous enforcement program now being carried out by the State.

Names and citations of the environmental laws in question:

Underground Storage Tank Regulations (California), California Water Code (California) Safe Drinking Water Act (U.S.), and U.S. Clean Water Act (U.S.)

Submitter(s):

Methanex

Submission Timeline

October 18, 1999

The Secretariat received a submission and began a preliminary analysis of it under the guidelines.

Acknowledgement - Communication to Submitter(s) authored by Secretariat on 20/10/1999

Submission - Submission authored by Submitter(s) on 14/10/1999

October 18, 1999

The Secretariat began reviewing the submission under Article 14(1)

March 30, 2000

The Secretariat determined that the submission met the criteria of Article 14(1) and requested a response from the concerned government Party in accordance with Article 14(2).

Determination - Secretariat Determination under Article 14 (1) and 14 (2) authored by Secretariat on 30/03/2000

May 30, 2000

The Secretariat received a response from the concerned government Party and began considering whether to recommend a factual record.

Acknowledgement - authored by Secretariat on 31/05/2001

Party Response - Response from the Party under Article 14 (3) authored by United States on 30/05/2000

June 30, 2000

The Secretariat determined to proceed no further because the matter is the subject of a pending judicial or administrative proceeding.

Determination - Secretariat Determination under Article 14(3)(a) authored by Secretariat on 30/06/2000