As a result of the 1990 Federal Clean Air Act Amendments (CAAA) and the subsequent state laws to comply with the federal mandate, approximately 30% of gasolines currently used in the US contain a percentage of oxygenates for air quality improvement programs. California currently uses approximately 1.5 billion gallons of Methyl tert-Butyl Ether (MTBE) per year, with local production representing only about 12% of local demand. About 80% of US MTBE production is located in Texas. Exposure risks and costs associated with water contamination due to the use of MTBE are discussed. Policy recommendations to reduce the cost of using MTBE while protecting water supplies are listed.