FALLON, Nev. - A blond fourth-grader in a Minnie Mouse T-shirt gulps some of the nation's most arsenic-tainted drinking water from a hallway water fountain.
In a nearby classroom, well-behaved 6-year-olds sip from bottles of tap water that some scientists say could cause fatal cancer in one in 50 people.
It's an ordinary school day in a small town fighting to keep its water polluted.
The aquifer beneath this placid Navy town contains arsenic at twice the maximum level allowed by safe drinking water laws. For almost 30 years, city officials skeptical of federal regulators have refused to filter the toxic element from their wells.
''It's the Mount Everest of arsenic situations,'' said Jon Merkle, an environmental scientist in the Environmental Protection Agency's San Francisco office. ''I would call it a long-term drinking-water emergency.''
Some federal housing programs have cut off aid to the area, and the EPA is threatening to fine Fallon $27,500 a day until the city complies with the agency's standard.
Yet there is no clear-cut evidence of arsenic-related illness here. And city officials scoff at the idea that their refusal to install a costly water treatment system could be causing hundreds of needless cancer deaths.
''We don't believe there is a health hazard,'' City Attorney Mike Mackedon said. ''I regard it as a legitimate dispute. They regard it as a matter of obedience. This is power and arrogance.''
These are the first salvos in a public health battle promising to spread far beyond the arid Lahontan Valley.
The EPA is expected by Jan. 1, 2001, to drastically lower the limit for arsenic in drinking water from 50 parts per billion to as little as 5 parts per billion. On New Year's Day, thousands of communities from New Hampshire to California could be in violation of the stricter new standard.
The cost of compliance for utilities nationwide could spiral into hundreds of millions, even billions, of dollars.
''So far, this is the most expensive drinking water regulation ever promulgated,'' said Michelle Frey, a Colorado-based environmental engineer who studied the standard for the municipal water industry.
Observers on all sides expect the acrimony in Fallon to spread across the country as lawsuits and intergovernmental battles erupt over the bills for cleaning arsenic from water supplies. Some even say the fighting could change the way Americans receive that most essential commodity: unlimited safe drinking water.
A small group of Fallon's most senior citizens gather most mornings at the Depot Restaurant and Casino on Williams Avenue to pass the time of day as they wash down steaming cups of coffee with tall glasses of iced tap water.
At 100 parts per billion, the arsenic in that water almost certainly threatens public health, say scientists, environmentalists and even water industry officials arguing for a relatively lenient new standard.
After decades of resistance, Fallon officials in 1990 promised to build a filtration system, but only after a new standard is finalized. EPA officials say that pledge doesn't allow the city to continue violating the current limit.
City officials acknowledge they could be fighting a losing battle against the federal government. Yet, many residents maintain they don't believe the arsenic is harming them.
''I think that's what keeps us young, that Fallon water,'' said 72-year-old Elmo Dericco, the city's retired school superintendent and a 45-year resident.
Many in Fallon accuse the federal government of using shaky science in a vengeful attempt to financially cripple the town. Fallon, population 8,500, has sued a host of federal agencies for transferring farmers' irrigation water to local American Indian tribes and environmental projects.
''The federal government's dictating, is what they're doing,'' said Mario Recanzone, a 78-year-old senior state judge who has lived in Fallon 50 years. ''I think they're more concerned with the fish and wildlife than they are with human beings.''
Other residents have turned to bottled water for drinking and cooking, saying they no longer know whether their tap water is poisoning them.
The local High Mountain Spring Water Co. trucks water from the Sierra Nevada to 900 homes throughout Fallon. And on most afternoons, shoppers push carts groaning with bottled water through the local Wal-Mart parking lot.
Natural arsenic deposits, not industrial pollution, create most drinking water contamination nationwide, experts say.
In wetter regions, rainfall long ago leached the arsenic out of soil and rocks. In the arid West, flowing water continues to carry high levels of arsenic into groundwater supplies.
The financial effect of the lower arsenic standard is expected to be highest in mineral-rich Western states like Nevada.
When Fallon officials contemplate filtering arsenic from the city's water, they paint this dire picture:
A filtration plant could cost between $10 million and $20 million. Without state or federal financial assistance, the expense would be passed on to consumers.
Skyrocketing bills would force massive water cutbacks in a community that proudly calls itself ''the Oasis of Nevada,'' an island of greenery in the alkaline Northern Nevada desert.
The average monthly water bill could rise from about $20 to $100 in a town populated largely by retirees, military families, farmers and school district employees. The town's annual budget is $5.4 million.
''Your town goes from being green to rolling tumbleweeds,'' said five-year Mayor Ken Tedford, whose uncle and grandfather held the office before him. ''Instead of grass out there we'd have gravel and dirt.''
The cost of complying nationwide with a 5 parts per billion standard has been estimated at as much as $17 billion to build new systems and as much as $630 million a year to operate them.
A 1999 EPA report estimated that a 5 parts per billion standard would affect 4,923 water systems nationwide and compliance costs could reach $686 million a year. As many as 450 Nevada water systems might have to spend $350 million to build new filtration systems and $18 million a year to operate them, according to the Nevada Rural Water Association.
Some environmentalists believe the costs of filtering arsenic have been overstated.
Erik Olson, a senior attorney for the Washington, D.C.-based Natural Resources Defense Council, said the EPA probably has exaggerated compliance costs. And federal funding for rural water systems could defray some expenses.
In Fallon, the fight over arsenic has gone beyond dollar figures. For many here, refusing to filter arsenic has become a point of civic pride. Until late last month, Fallon refused to obey an EPA order to attach to monthly water bills a flier warning residents to seek alternative sources of drinking water.
The federal government hasn't taken kindly to the city's stance. The EPA has threatened fines. And five years ago, the U.S. Housing and Urban Development Department, the Agriculture Department and the Veterans Administration ceased insuring mortgages for new homes in the area.
''It's not a safe place and so we won't insure the mortgages there,'' said HUD spokeswoman Sandi Abadinsky.
The USDA and VA accepted Fallon officials' promise that they would comply when the new standard is released, and they have begun insuring mortgages again.
Scientists only recently have begun to conduct large-scale studies of Fallon and the handful of American communities whose drinking water supplies contain similar arsenic levels.
''There's nothing quite like it,'' said Dr. Allan Smith, head of the University of California, Berkeley's Arsenic Health Effects Research Program, which is conducting the first comprehensive study of potential arsenic-related diseases in Fallon. ''It's by far the largest population exposed above the current drinking water standard.''
But registered nurse Arlene McDonnell supervised a study searching for arsenic-related health problems after she joined Fallon's only hospital in 1982.
''At first I was really worried,'' she said. ''You'd think we'd find something. We didn't find anything. When you find absolutely nothing, then you begin to wonder.''
Why don't people in Fallon seem to be getting sick?
The town is so small that a higher cancer risk probably would not be noticeable to the average person, scientists say.
Epidemiologists expect 20 people out of 100 to die of cancer, Smith said. One in 100 Fallon residents could be dying of arsenic-related cancers, but those 80 additional deaths in 8,000 might easily be going unnoticed, he said.
''These suckers can't prove what level you can poison someone with,'' said Dr. Gary Ridenour, a local internist. ''I've got 15 years of seeing 30 patients a day with no evidence of arsenic poisoning.''
Arsenic Levels in Nevada's Water
-Source: Nevada Rural Water Association
A current Environmental Protection Agency proposal would lower the federally accepted level of arsenic in water to 5 parts per billion. Dozens of Nevada water systems, listed with current arsenic levels below, might have to spend millions to comply with a new limit. They include:
- Fallon: 100 parts per billion
- Goldfield: 36 parts per billion
- Nevada Test Site: 29 parts per billion
- Reno: 26 parts per billion
- Nellis Air Force Base: 21 parts per billion
- Panaca: 18 parts per billion
- Elko: 12 parts per billion
- Tonopah: 12 parts per billion
- Searchlight: 10 parts per billion
- Beatty: 10 parts per billion
- Source: Nevada Rural Water Association
