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Govt. U-Turn On Gas Additive

The government admitted Tuesday its attempts to clear the air in smog-filled urban areas may have backfired. The fuel additive MTBE that worked so well to reduce smog levels actually ended up polluting the groundwater supply, reports CBS News Correspondent Sandra Hughes.

In response to an advisory panel report that the additive is getting into drinking water, the Environmental Protection Agency reversed course and urged a prompt and significant rollback in use of the chemical.

"We did find between five to 10 percent of the water supplies in areas that have been sampled, showing some detection of MTBE in the water supply," says panel member Daniel Greenbaum.

In Santa Monica, Calif., it contaminated more than half the water supply. "We've been dealing with this nightmare for four years," says Gil Borboa of the city's water division.

The methanol-based additive is used in reformulated gasoline in 16 states. Federal research shows the compound causes tumors in rats and may also do so in humans. A University of California study concluded that MTBE has affected at least 10,000 groundwater sites in the state.

Once released into the ground through small cracks in gas station or oil company pipes, MTBE is so soluble that it's quickly absorbed into the groundwater supply.

Mark Feldman actually had MTBE leaking into his home in New York. "I would start picking up this gasoline-type odor right outside the front door of my house," he says.

Recently, California announced it would ban MTBE, and Maine officials pulled out of the "reformulated gasoline" program because of concern over the additive.

Producers warn that gasoline prices will rise if they are forced to use alternative methods to make cleaner burning gas.

Terry Wigglesworth of the Oxygenated Fuels Association says, "We'll be forced to rely on imports. We'll be forced to rely on physical changes to refineries and distribution systems. This has only one result: higher gasoline prices at the pump."

While many see the EPA announcement as the first step toward a nationwide ban, Greenbaum says MTBE does not yet pose health concerns. "This is not an issue of health and safety," Greenbaum said. "But when you cannot use a water supply because your consumers will not drink it, that is a huge loss to a community."