Government environmental policies and regulations sometime made costly mistakes too. Remember the disaster of reformulated gasoline (RFG) with MTBE? It was mandated by Clean Air Act Amendments (CAA) imposed by EPA as an oxygenate for gasoline in 1992. As part of the Energy Policy Act of 2005, Congress finally voted to remove the oxygen content requirement for RFG due to health concerns from MTBE. But MTBE had contaminated groundwater and soil so much which now needs $1~30 billions to clean up!
Your story is not accurate.
The EPA has
never mandated the use of MTBE, that was a cheap way private industry met clean burning standards. Some refiners met the same standards without using any MTBE.
In fact, many, if not most, states have
banned the use of MTBE.
What the Clean Air Act Amendments required was than refiners use
some type of oxygenate. It could be alcohol or ETBE which comes without the problems of MTBE but costs more.