(Bloomberg News) The Obama administration said it will set the first U.S. standard for perchlorate in drinking water, reversing a Bush-era decision against regulating the chemical that may impair the human thyroid and put babies at risk.

The Environmental Protection Agency said today it will propose a rule for the toxic chemical, which is used to make rocket fuel by companies such as Lockheed Martin Corp. and to produce fireworks and explosive devices. Former President George W. Bush's EPA declined to set standards.

The chemical, found in more than 4% of public U.S. water systems, may hurt the development of fetuses and babies, the EPA said. The Perchlorate Information Bureau, a group funded by industries that make or use the chemical, said the EPA is misguided and a federal standard isn't warranted.

"To date, no research has shown an adverse effect in humans exposed to perchlorate," the Sacramento, California- based organization said in a statement.

The group, backed by companies such as Lockheed, the world's largest military contractor, said perchlorate hasn't been detected in public drinking water at levels posing a public-health danger.

Spokesmen for Bethesda, Maryland-based Lockheed didn't immediately return calls seeking comment.

The EPA said 5 million to 17 million people may drink water containing the chemical, citing monitoring data. The agency said it received almost 39,000 comments about regulating perchlorate.

16 Chemicals

The EPA also said today that it will establish a rule to protect people from as many as 16 chemicals found in drinking water that may cause cancer.

Jackson told lawmakers that the agency probably will revise drinking-water rules to reflect evidence about dangers from chromium-6, which was deemed a probable carcinogen by the National Institutes of Health in 2008.

The EPA is waiting for further studies to be concluded before deciding how to proceed, Jackson said at a hearing of the Senate committee on public health and drinking water issues.

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