"MTBE is being detected nationwide because...it had been used as an octane enhancer in gasoline in the past and because the pipes and trucks used to carry gasoline throughout the nation have been cross contaminated with the substance," said John Stephenson, director of the GAO's Natural Resources and Environment division. GAO is the investigative arm of Congress.

Testifying before a House subcommittee looking into MTBE groundwater contamination, Stephenson said leaks of the fuel additive pose health risks to those who live nearby or drink the water.

"Such health risks can range from nausea to kidney or liver damage or even cancer," Stephenson said.

As a result, 14 states have partially or completely banned MTBE and some communities have closed their drinking water wells.

Stephenson pointed out that a school in Roselawn, Indiana, discovered that students have been drinking water with nearly 10 times the federally recommended safe level of MTBE, and officials are trying to determine if the additive came from a nearby tank and whether it caused the students' nosebleeds.

MTBE is less likely to cling to soil and than other gasoline components and dissolves more easily into wafer, allowing the substance to travel faster, farther and deeper.

The extent of MTBE contamination may be understated, according to Stephenson, because some leaks go undetected and only 19 states conduct extra tests to ensure that MTBE does not travel further from a tank site.

Energy legislation passed by the Senate last month would phase out the use of MTBE nationwide. The House of Representatives did not include such a phaseout in its energy bill.

The Oxygenated Fuels Association, which is the main trade group for MTBE producers, has said that instead of banning the fuel additive, federal and state regulators should enforce the laws against owners of leaky underground storage tanks.