LIBBY, Mont. -- The legacy of industrial poisoning in America is a grim one: There are the copper mines of Butte, Mont., that created a poisonous pit more than a mile wide and 1,800 feet deep. There is Cleveland's Cuyahoga River, once so polluted it caught fire. There is New York's Love Canal. But for sheer human misery, there rarely has been anything like Libby.

At least 200 people have died because they worked at the Zonolite Mountain vermiculite mine, or had a husband who worked there, or jumped as children from ropes into fluffy piles of vermiculite, or played on the high school running track or the elementary school ice rink, both filled with mine tailings.

At the grocery store, you're likely to run into one or two Libby residents with oxygen boosters slung over their shoulders, connected to plastic tubes running into their nose. The ones who can't get to the store sit home next to their oxygen tanks. They struggle to get a breath of air in lungs that can't expand anymore, they cough until they vomit, they peer from behind oxygen masks through eyes filled with fear. They wait for their children to show signs of the disease. Many already do. Asbestos--the invisible, deadly fiber that laces the vermiculite at Libby--seems a problem from the past. Many people assume it has been banned. Wrong on both counts. And the fact that asbestos lurks in the lungs for up to 40 years before sickening and killing means that mortality rates still are expanding, decades after the world first realized asbestos could kill.

Annual claims for work-related asbestos exposure hit 50,000 last year--more than double the rate of the mid-1990s--with medical and environmental cleanup claims projected to reach $200 billion in the U.S. by 2030.

Libby is the latest asbestos crisis to come to light--exposed less than two years ago by a group of residents, their lawyers and the Seattle Post-Intelligencer. It also--in the way asbestos disease has afflicted much of an entire town--is one of the worst. The small northwest Montana town's 2,700 residents have the distinction, said Environmental Protection Agency toxicologist Chris Weis, of experiencing "the most severe residential exposure to a hazardous material this country has ever seen."

Death rates from asbestosis in Libby are 40 to 60 times the national average. And Libby has stunned toxicologists with evidence for the first time that asbestos, long known as an occupational hazard, has affected large numbers of people who never worked with asbestos--or lived with anyone who did.

A wide-ranging health survey released last month showed that at least 18%, and possibly as many as 30%, of the 5,590 residents of Libby and surrounding rural communities had lung abnormalities. Many had no exposure to asbestos other than breathing Libby's air. A total of 48% of former mine workers had lung problems.

With cleanup costs estimated at $50 million for the town alone--not counting the massive contamination at the old mine itself--the EPA will decide over the next few months whether to add Libby to the federal Superfund program, which provides aid for the nation's most polluted industrial sites. As an alternative, W.R. Grace & Co., which operated the mine from 1963 until it closed in 1990, has offered to do the cleanup itself.

Grace, a $1.6-billion chemical and building materials company, has already paid $20 million in individual claims and spent more than $2 million cleaning up its plants in Libby. The company has pledged millions more to pay medical bills for anyone in Libby diagnosed with an asbestos-related illness and $250,000 a year to the local hospital for health screenings.

EPA administrator Christie Whitman, scheduled to visit the town today, also will take on the difficult question of whether Superfund cleanup money can be used in Libby to remove Zonolite home insulation, which was installed in anywhere from 800,000 to 10 million attics across America. Libby attics are eligible for Superfund money only if the EPA finds a public health emergency or if someone not living in the home could be exposed to dangerous quantities of asbestos.

The extent of asbestos contamination in this town is hard to grasp. While it's perfectly safe to breathe Libby's mountain air--the mine's processing plants no longer belch asbestos fibers into the atmosphere--all you have to do is scratch in the dirt in some places to find it.

Vermiculite is a naturally occurring mineral that has been used for decades in insulation, soil conditioning, fireproofing compounds and fertilizers. While vermiculite itself is nonhazardous, its ore is sometimes threaded with tremolite, a rare and extremely toxic form of asbestos. Milling removed most, but not all, of the tremolite. And Libby's ore had a higher-than-normal tremolite content.

In Libby, vermiculite was free. Residents drove away with pickup loads to distribute in their gardens as mulch and their attics and chicken coops as insulation.

Federal agencies for years documented--and largely ignored--potential hazards to workers. It took a series of lawsuits to begin tallying the deaths. When Paul Peronard was sent from the EPA's Denver office in November 1999 to check out news reports that up to 200 people had died of asbestos exposure, he didn't see how it could be true.

"The reports didn't really reconcile with what I'd been taught about asbestos-related disease and exposure," Peronard said. "My understanding of asbestos was it's an occupational problem. You need long-term exposure with fairly consistent doses, and you rarely if ever saw it outside the workplace. And it's an old problem, one that's going away," added Peronard, who now is the EPA's on-site coordinator.

"What I saw was a pretty stark contrast to that."

The asbestos in Libby is more insidious than the more common serpentine asbestos, such as chrysotile, found in old flooring, roofing materials, brake linings and pipe insulation. Tremolite produces sharp, thin fibers that lodge in the outer pleural membrane of the lungs in a way beyond the body's ability to remove them.

Over a period of 15, 20, even 40 years, scar tissue buildup decreases the lung's ability to expand, leaving victims to suffocate, a tortuous process that can take years. The clinic in Libby is now handling 680 active asbestos cases.

"In the last five years, I have seen an alarming number of patients from Libby who had no direct exposure to the mine or to the miners who had asbestosis," Spokane, Wash., physician Alan Whitehouse testified before Congress earlier this summer.

Until now, asbestos mortality in America generally has been tallied by occupation, with construction workers, shipyard workers and manufacturers of asbestos products leading the estimated 8 million people who have had significant asbestos exposure since World War II.

Of the 24 patients of Whitehouse's who have died in Libby over the last three years, only 18 were miners. It is "easily conceivable," he added, that as many as 2,000 Libby residents ultimately will show symptoms.

The EPA tried to ban asbestos in the 1980s. But an appeals court, in a suit brought by the industry, overturned the ban in 1991. It remains a legal component in products such as brake pads and roofing material, and is often present as an unintentional contaminant in everything from potting soil to lawn care products--usually in quantities so small it is considered safe for consumers, particularly with modern manufacturing techniques.

In Libby, it is hard to find a family that doesn't have a case of asbestos disease, or at least a close friend with a bad chest X-ray.

Eva Thompson lost both her parents to asbestosis, along with her husband. Eighteen other family members have been diagnosed with lung problems. Helen Bundrock's husband died on the front lawn two years ago when he left his oxygen bottle inside. Now she is sick. So are all five of her children. Neil Bauer and his twin brother have it. His father-in-law and his sister-in-law's father died "the most horrible death that one wants to watch," he said. Alice Priest walks around with an oxygen booster she calls "Grace." Her husband, a former mine employee, died of lung cancer.

"Luckily, my husband died before he realized what he was carrying home on his clothes would kill me," she said.

World's Biggest Vermiculite Deposit

Zonolite Mountain, six miles outside town, contained the world's largest deposit of vermiculite when E.N. Alley found it near his farm in 1919 and noticed its unique ballooning qualities when heated. In 1940, he began mining, milling and marketing it as Zonolite insulation.

It was the best thing that ever happened to Libby, or so it seemed. There was a silver mine up near Troy, and the lumber mill employed a lot more people. But if you had a job with W.R. Grace & Co. (which bought the Zonolite mine in 1963 and closed it when asbestos injury claims began mounting in 1990), you had the best job in town.

Grace milled the vermiculite to remove all but "trace" amounts of asbestos. But the old dry-process mill blew contaminated dust into the air that settled over the town, so thick kids used to trace their names in it on parked cars. You could hardly see through the dust inside the mill, and respirators the company gave out clogged so quickly that most workers abandoned them.

Les Skramstad remembers his first day as a sweeper at the plant.

"There was probably anywhere from 6 to 10 inches of dust on the floor, and it hung over everything. It was like walking on a mattress," Skramstad said.

"I thought, a guy can't live in this day after day after day. But I had to have that job. So I started sweeping with all my might."

Workers say they were told it was "nuisance dust." When fears about asbestos began to spread, the company conducted yearly X-rays and sent problematic results to employees' doctors. Many workers say they never saw those results.

Grace officials say they did what they could to protect their workers.

"Today, we understand that asbestos is a lot more dangerous than people realized in 1963," said Grace spokesman Greg Houston.

When EPA inspectors came to the plant in the 1970s, he said, "they walked away and they said: 'This isn't a big deal.' That's because they didn't have the scientific knowledge, they didn't have the technology, and they didn't have the understanding. And neither did Grace."

Skramstad quit working at the plant before Grace bought it but not before he got asbestos fibers in his lungs. In 1996, he was told he had five to 10 years to live. Now, at 64, his voice is weak and trembly because he can't get a full breath.

His wife, Norita, has lung problems. So do three of his five children, including his daughter Laurel, who has six children of her own. His son, Brent, has full-blown asbestosis--a near-certain death sentence. So do his brother, his two nieces and their two husbands.

Skramstad is one of only a few victims to have had a case against the company go to trial in Libby. Many others, including two major class actions on behalf of Libby residents and homeowners across the country with Zonolite insulation, are pending. (The insulation is considered relatively safe if left alone, but it can put asbestos fibers into the air when disturbed.)

Skramstad won a $600,000 judgment but took a smaller settlement to avoid waiting for years on appeal. "The company has us . . . because we're talking time--and time is on their side."

Don Kaeding, 79, spends most of his days in his living room, hooked up to his oxygen booster. His problems, he believes, date to the 30 months he worked at the mill and up at the mine, mostly doing carpentry jobs.

"I really feel that W.R. Grace, some of their CEOs, should be tried for murder, because murder is what they committed in this town," Kaeding declared.

So far, he said, Grace is paying $1,042 a month for his oxygen costs, along with all medical bills stemming from Libby contamination. But what happens if the company, which filed for Chapter 11 bankruptcy protection earlier this year, runs out of money?

Gayla Benefield never worked at the mine, but her father did. So did her husband. "He would come home covered with dust, and you'd sort of beat the clothes off and put them in the washer. In the car, you'd turn on the heater and the dust would just fly out."

Her father, after years of working at the plant, began to grow weak. He thought he had a bad heart. A doctor told him "he had no lungs," Benefield said. Her father began collecting $44 a week in workers' compensation and died 18 months later, in 1974.

"He had a mask on his face, and all you could see was the panic in his eyes, because he couldn't breathe," Benefield said.

Her mother made a living selling Christmas trees, fireworks and Avon products until she started coughing, four years after her husband died.

She finally died in 1996, at the age of 79. "Those [last] 17 months were horrendous. . . . It looked like she was coughing up her lungs," Benefield said. "Everybody says she was old, she died. Well, nobody deserves to die like this. At night she would curse the company and she'd curse Dad for leaving her, for having let this happen."

Now comes the next generation. Benefield is sick. And so is Jan Meadows' 21-year-old son, recently diagnosed with breathing abnormalities in one of his lungs.

"I wish it were me," she told Gov. Judy Martz at a town meeting last month. "I wish it were my lungs. But this is my boy."

Grace's Point Man in Libby

Imagine a town like Libby, all wound up and nobody to be mad at except a company. And then imagine Alan Stringer, W.R. Grace's representative here, in his office on Mineral Avenue downtown.

Stringer was a plant manager here for years. (His lungs are "fine," by the way.) Then he retired, moved to San Juan Capistrano and envisioned a pleasant life with little to worry about but his golf score. Until Grace brought him back as point man in Libby.

After the town meeting, Stringer sat in his office. "That was 2 1/2 hours of Grace-bashing," he said. "Two-and-a-half hours of complaining and criticism and retribution. I don't know. Maybe it's cathartic."

Stringer was encouraged by the governor's attitude, he said, her advice that the town forget about blaming the company, the EPA and each other and start pulling together to get the place cleaned up.

"Her words were to the point: Let's fix it and get it done. And that's the commitment we made when we met with her," Stringer said. "People keep talking about the value of a human life. Well, no matter what you say, I still need to know: What's it going to cost to clean it up? . . . We're committed to doing what needs to be done--when the EPA defines what needs to be done."

Many residents fear a Superfund cleanup could drag on for years and discourage new businesses from coming to Libby, which already has double-digit unemployment and a stone-cold real estate market. But considering all they've been through, hardly anyone has left town: Many know they couldn't sell their houses now for what they're worth. Most realize that Libby, for all its past problems, is now a safe place to live. And few, after living all their lives here, have anywhere else to go.

The EPA tries to be reassuring. Peronard says nine of the worst sites in town will be cleaned up by fall and vows he can get the rest of the job done in three years--going from house to house, cleaning up properties that need it. The mine itself is in another category, he admitted--so contaminated it could take the rest of this century to fix.

"Look," said Mayor Tony Berget. "There's contamination, and we want it cleaned up. I have small children, and I want them to grow up in a safe environment. But we're not America's Chernobyl.

"You can still hike up to a mountain lake here, you can spend a whole week and never see another person. And there's not a whole lot of places in the country that can say that," Berget said.

Mike Powers wonders what he should say about that to his kids, who won't bring his grandchildren to his house because it's so contaminated with asbestos. They'd rather take them to the in-laws', he said, where everybody smokes, but it won't kill you as fast.