WASHINGTON – House and Senate conferees abandoned giving makers of the gasoline additive MTBE liability protection against environmental lawsuits yesterday, removing the major roadblock to enactment of broad energy legislation.

Senate negotiators rejected a House proposal for an $11.4 billion MTBE cleanup fund that House Republicans had hoped would serve as a compromise and still provide the liability shield to the oil industry.

But Rep. Joe Barton, a Republican of Texas, said “the proposal has not been accepted by the Senate” and that he would offer another MTBE proposal on Monday.

A Republican of New Mexico and leader of the Senate energy negotiating team, Senator Domenici, said that while some MTBE issues were still being discussed, those did not include a cleanup fund or liability protection.

“Those are gone,” Mr. Domenici told reporters as the House-Senate conferees held an unusual Sunday session in hopes of completing work on a sweeping energy bill by Monday night.

If the negotiators are successful, an energy bill could pass Congress before week’s end, meeting an August 1 goal to have a bill at the White House as urged by President Bush.

The MTBE liability issue has dogged lawmakers trying to pass an energy bill for more than two years. Many senators have vowed to block any bill that gives the oil industry protection against environmental lawsuits.

But the House has pushed a provision that would shield the MTBE makers against lawsuits that claim the additive is a defective product because it has been found to contaminate drinking water.

On Friday, Barton proposed a $11.4 billion cleanup fund for MTBE, a third of which would be paid for by the oil industry, including MTBE manufacturers, refiners, and corner gasoline station owners.

MTBE, an additive introduced into widespread use in the mid-1990s to reduce air pollution, has been found to contaminate drinking water supplies in at least 36 states. Communities and water agencies say they’re facing billions of dollars in cleanup costs. More than 150 lawsuits have been filed seeking cleanup payments from MTBE producers.

But the cleanup fund proposal immediately drew criticism from all sides in the MTBE dispute.

The oil industry thought the plan’s requirement that they contribute $4.1 billion into the fund was too much. Water agencies argued the fund had too many loopholes and not enough money to meet cleanup needs.

Mr. Barton’s proposal would have included liability protection for MTBE manufacturers.

The MTBE liability issue had been viewed by Senate negotiators, especially Mr. Domenici, as a deal breaker that – as it did two years ago – would scuttle any chances of getting an energy bill through the Senate.

While a number of contentious issues remained to be worked, none was expected to create a roadblock that could not be overcome.

Mr. Barton, chairman of the negotiating conference, and Mr. Domenici both expressed optimism that they will finish the legislation in the coming days, hopefully by Monday night.

“We’re making tremendous headway,” said Mr. Domenici.