The U.S. Environmental Protection Agency (EPA) said it will develop a first-ever national standard for perchlorate, a naturally occurring and man-made chemical found in rocket propellant, fireworks, explosives and in some drinking water systems.

The agency's decision to regulate perchlorate reverses a Bush-era decision that provided a guideline of 15 parts of perchlorate for every billion parts of water.

EPA said perchlorate may have adverse health effects because scientific research indicates that this contaminant can disrupt the thyroid’s ability to produce hormones that are critical to developing fetuses and infants. There is a substantial likelihood that perchlorate occurs with frequency at levels of health concern in public water systems because monitoring data show over four percent of public water systems have detected perchlorate.

In addition, there is a meaningful opportunity for health risk reduction for the between 5.2 and 16.6 million people who may be served drinking water containing perchlorate.

Based on these potential concerns, EPA said it will move forward with proposing a formal rule and that it will start evaluating the feasibility and affordability of treatment technologies to remove perchlorate and will examine the costs and benefits of potential standards. The agency plans to publish the proposed regulation within 24 months and it expects to promulgate a final regulation within 18 months of the proposal.

In addition, EPA said it will be moving towards establishing a drinking water standard to address a group of up to 16 toxic chemicals that may pose risks to human health.

"Our decisions are based on extensive review of the best available science and the health needs of the American people," said EPA Administrator Lisa Jackson.

Responding to the EPA decision, the Perchlorate Information Bureau (PIB) said "despite 50 years of scientific research that indicate the low levels of perchlorate being detected in the environment have no effect on human health, much is already being done – even in the absence of a regulatory standard – to further ensure public health is protected."

EPA's determination, despite the overwhelming scientific evidence contradicting it, now starts what will likely be a multi-year process of scientific review and public input before a final decision is made, said PIB. "The public should expect that commitments by President Obama and EPA Administrator Jackson to science-based regulation would be upheld throughout such a process, and that regulations will protect both public health and scarce public resources."

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