Ethanol gas prompts another lawsuit

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For the second time this year, a class-action lawsuit has been filed against major U.S. oil companies for failing to alert boaters about the damaging characteristics of gasoline with the additive ethanol.

“This is an effort to even the playing field in a David-and-Goliath situation,” says David Ferguson, a Fort Lauderdale, Fla., attorney representing Erick Kelecseny, 33, of Lake Placid, Fla. “The oil companies have known it could cause problems, and they should have warned boat owners — and they didn’t.”

After opening a boat-rental business in central Florida about 18 months ago, Kelecseny’s five-vessel fleet of small powerboats became plagued with consistent propulsion and fuel-system problems. “Customers were calling me from the lake, saying the engine was sputtering and cutting out,” says Kelecseny, who runs the business, Freedom Marine, with the help of his wife, Bonnie, and two other employees. “I had to go out and tow them in. It was frustrating, time-consuming, and I was losing money.”

The business owner’s suit was filed Aug. 12 in U.S. District Court in Miami. It names Chevron, Exxon Mobil, Shell Oil and Tower Energy Group as defendants. In addition to Kelecseny, the suit represents all boat owners who filled their fuel tanks with ethanol-blended gas in Florida and owners of boats in Florida with fiberglass fuel tanks that had to be replaced because of gas containing ethanol. The lawsuit seeks monetary damages, but does not name an amount. To file a class-action suit, overall estimated damages to plaintiffs must exceed $5 million, says Ferguson.

“We’re not looking to give everyone a windfall, just pay back what boat owners have lost,” he says.

A similar action was brought against Chevron, Exxon Mobil, Shell and seven other oil companies in April. Lawrence Turner, the plaintiff, bought ethanol-blended gasoline for his 1992 Mediterranean 38, Grateful Med, which has fiberglass fuel tanks and is powered by twin 454 Crusaders. In 2006, the engines began stalling, and then Turner discovered the fuel tanks were disintegrating. The ethanol was breaking down the resin in the fiberglass, and it was leaching into the fuel. In all, Turner has spent $35,000 on repairs to the engines and to replace the fiberglass tanks with aluminum tanks, he says.

“I’ve had the boat since 1992 and never had a problem until this,” says Turner, 51, an attorney and accountant from the Los Angeles area who keeps his boat in Marina del Rey, Calif. “It took me completely by surprise. I had never heard of ethanol and that it was detrimental to boats.”

Exxon Mobil is aware of both lawsuits and is reviewing them, says spokesman Kevin Allexon. “Because it is pending litigation, we cannot comment on the issue any further,” he says.

The lawsuits have merit, says Bob Adriance, technical services director for BoatU.S.

The oil companies fell down on the job during the transition in 2004 from gasoline with MTBE to ethanol, he says. Fuel distributors and gasoline stations were aware they needed tanks manufactured with a resin that can withstand the effects of ethanol, he says. “Nobody told boat owners. Due diligence was not carried out,” says Adriance.

Research done by BoatUS in late 2006 indicates there are 5,000 to 10,000 boats in the United States with fiberglass fuel tanks, says Adriance.

In addition to the problems with fiberglass fuel tanks, ethanol-blended gas gums up fuel lines and can cause pistons and valves to fail. Ethanol attracts water, and because boats are kept in damp environments, accumulation of moisture is inevitable in a boat’s fuel tank. When the ethanol/water mixture falls out of the fuel in what is known as phase separation, a layer of sludge and/or water forms at the bottom of the tank, which can cause engine problems.

“It’s not so much the fuel itself,” says Soundings technical advisor Erik Klockars. “The engines will burn the fuel. The problem is what ethanol-blended fuel causes in the fuel system and what it attracts on its way to the engine.” Gas that sits in an engine’s carburetor for a lengthy period can actually absorb moisture through the carburetor vent, he says.

Kelecseny runs five boats. Four of the five are powered with carbureted 2-stroke outboards.

“The carburetors were gummed up; the gaskets were eaten away,” says Kelecseny. “We were constantly rebuilding the carburetors and changing [fuel] filters. It seemed to be never-ending.”

Kelecseny solved the problem: He found a gas station that sells gasoline without ethanol. “It’s 17 miles from my business, but it is worth the trip,” says Kelecseny, who keeps his boats on trailers, launching and retrieving them for customers at lakes in the area.

Kelecseny says the gas stations he previously used sold E10 — a fuel consisting of 90 percent gasoline and 10 percent ethanol.