Methyl tertiary butyl ether is what is known as an “oxygenated hydrocarbon.” For reasons that still weren’t clear the last time I checked, oxygenated hydrocarbons alter the combustion characteristics of gasoline in an internal combustion engine such that combustion is more complete and in particular, carbon monoxide is reduced. Carbon monoxide incidents are more numerous in winter (because atmospheric ventilation rates are lower), so oxygenated fuel additives have been mandated for winter gasoline blends.
Oxygenated hydrocarbons are also generally octane boosters. In fact, ethanol, the alternative oxygenate to MTBE, was originally considered promising as an octane additive in the early days of the automobile. One story as to why tetra ethyl lead became the gasoline octane additive of choice is that ethyl could be patented, while ethanol could not. Another suggestion is simply that ethanol is not generally made from oil, and oilmen didn’t want it in gasoline for that reason.
For whatever reason, I can say from personal experience that the attitude toward ethanol among managers in the petroleum industry is very close to foam-at-the-mouth psychotic. They really, really, hate ethanol. MTBE, on the other hand, is made by the oil and gas industry (from natural gas to methanol to MTBE), and oilmen loved it.
From an environmental standpoint, you could say that MTBE is good for the air and bad for the water. Specifically, MTBE, like ethers generally, is water soluble, and will move into groundwater pretty easily. It also has a characteristic flavor and odor, which is apparently detectable (and unpleasant) in very small concentrations in drinking water.
None of this information is new; it was certainly well known 25 years ago, when MTBE was first being touted as an “environmentally friendly” additive to gasoline. It was, from the start, a big part of the “reformulated gasoline” initiative, whose intent was to bring some environmental awareness kudos to the gasoline industry, and, incidentally, to create a bit of a refinery squeeze to drive some independent filling stations and chains out of the market, or to at least bring them into line.
But everyone was aware of the potential problem of groundwater contamination, especially from leaks in service stations’ underground storage tanks. In fact, the industry had an answer to this problem: double walled storage tanks. There was a certain amount of underground leak contamination anyway, and this was touted as the solution to it. And again, it had the additional benefit of being expensive enough that it would drive some marginal independent stations out of business, again squeezing the supply chain.
So the idea was to retrofit the storage tanks before MTBE was adopted. Unfortunately this didn’t happen. While one part of the petroleum industry was confidently lobbying to put MTBE in, and it won’t be a problem because we’ll have underground tanks to keep the stuff from leaking, another part of the industry was lobbying to delay, delay, delay the storage tank replacement program, because it would cost them money. Often you had lobbyists from the same company arguing both cases, though, it should be admitted, rarely on the same day, or at least not to the same people.
So that, more or less, is how Santa Monica came to lose 70% of its drinking water to MTBE contamination, why Santa Barbara had to spend millions on a new water treatment plant, and why a lot of people across the land came to be really pissed. It also played a role in the current fad for ethanol fuels (I give that one another two or three years, tops) but that's a story for another day.