The best I can findout about the "Environmental Impact of Butanol" is that it is nothing like MTBE.

If spilled when filling it evaporates very quickly and is not expected to get into ground water as MTBE did in California. 

It would be good to compare the following information with those facts known about gasoline and diesel.

Butanol might be easier to work with then gasoline and cleaner than dielsel.  Butanol leaves less mess (no oil residue after evaporation). 

No long term studies have been taken on at this time to determine the real ground water effects of using butanol as a general transportation fuel and safe reforming source for hydrogen in the fuel cell paradigm of the future.

Environmental Impact

 Release of n-butanol to the environment is expected to result from its use as a solvent in a variety of products ans as a fuel. It may also be released by the action of anaerobic microorganisms. Release of n-butanol to soil may result in volatilization from the soil surface and biodegradation is expected to be significant. n-Butanol should not bind strongly to soil and so is expected to leach into groundwater. Release of n-butanol to water is expected to result in biodegradation and in volatilization from the water surface.

Photooxidation by hydroxyl radicals is expected to be slow. Bioconcentration is not expected to be significant. Vapor phase n-butanol in the atmosphere is expected to react with photochemically generated hydroxyl radicals with a half-life of 1.2 (experimental)-2.3 (estimated) days. Human exposure to n-butanol is expected to result primarily from contact with products containing the compound.

 Environmental Fate

 
TERRESTRIAL FATE
: When released to soil, n-butanol is expected to leach to groundwater or to biodegrade. Volatilization from the soil surface may also occur.

AQUATIC FATE: In water, n-butanol is expected to biodegrade. Volatilization from the water surface is expected to occur with estimated half-lives of 2.4 hr, 3.9 hr and 125.9 days in streams, rivers and lakes . The actual tendency of n-butanol to volatilize depends upon the temperature, turbulence, wind speed, current velocity and the depth of the water bodies. n-Butanol is not expected to bind strongly to suspended sediments. Bioconcentration is not expected to be significant. The rate of the reaction between hydroxyl radicals and n-butanol in water is 2.2X10 9 l/mol sec . Assuming an hydroxyl radical concentration of 1X10-17 M in water, this corresponds to a half-life of about 1 year(2,SRC).

 ATMOSPHERIC FATE: The rate constant for the reaction between n-butanol and hydroxyl radicals is 6.8X10-10 cc/molecule sec . Using a hydroxyl radical concentration of 1X10 6 molecule/cc, the half-life was calculated to be 1.2 days . The half-life of n-butanol in a sunlit urban atmosphere was estimated to be 5 hr . The half-life for the reaction of vapor phase n-butanol in the atmosphere with photochemically generated hydroxyl radicals was estimated to be 2.30 days .

Drinking Water Impact

 SURFACE WATER: Tatsuno City, Japan - 318 ppb . n-Butanol was detected but not quantified in water samples from Lake Ontario . EFFL: Effluents from an unidentified petrochemical company contained about 16.0 mg/l n-butanol and discharged approximately 90 lbs n-butanol/day . In yr-old leachate of artificial sanitary landfill: 0.21 g/l