MERAUX, La. -- Now that water has receded from some of the most heavily damaged areas of New Orleans, it is becoming increasingly clear that Hurricane Katrina has left a major environmental mess in its wake.

Assessment teams and local emergency officials have identified at least six serious oil spills and numerous smaller incidents in southern Louisiana, but they are most concerned about a leak of an estimated 672,000 gallons of crude oil from a storage tank at a Murphy Oil Corp. refinery, some of which seeped into densely populated neighborhoods on the southeastern outskirts of New Orleans.

Federal officials told area leaders in private meetings over the weekend that they have designated the location around the Murphy refinery in Meraux in St. Bernard Parish as a "hot zone," or a potentially deadly hazard. Official access to the area has been restricted, but reporters from The Wall Street Journal who drove through city streets in the area saw block after block of homes within a mile of the refinery that had been inundated with what appears to be a mixture of oil and mud. Streets and much of the ground are covered in several inches of oozing muck.

Only limited work has been performed to remove the spilled crude since water began to recede from the area this past Thursday. As more of the crude sinks into the earth, officials say, the probability grows that as many as 4,000 homes will have to be razed and two to three feet of soil removed before the area could be inhabited again. Government officials say oil sludge spread across an area of three square miles.

The company believes most of the spilled oil was trapped behind a containment dike around the storage tank, and "we don't think very much oil got out of our refinery property, as far as we can tell," says Kevin Fitzgerald, a Murphy spokesman. The U.S. Coast Guard says Murphy estimated that 672,000 gallons of crude oil leaked out of the partially filled, 3.6 million gallon storage tank. The company says the tank may have dislodged from its foundation during the flood, floated as far as 15 feet and was punctured. Murphy says the containing wall around the tank was damaged during the storm, causing an unknown amount of oil to spread into the neighborhood.

Mr. Fitzgerald says he thinks much of that flowing liquid was muddy water containing a range of pollutants other than oil. Cleanup crews were using vacuum trucks and drum skimmers to suck up the oil, the Coast Guard says.

Crude oil is an unrefined form of oil that contains several harmful substances, including benzene, says Dr. Lynn Goldman, a professor of environmental health sciences at the Bloomberg School of Public Health at Johns Hopkins University.

Most spills occur outdoors, where the sun and air help break down the oil, causing it to evaporate. But if the crude from the Meraux tank seeps inside homes it will take longer to vaporize. "If it winds up inside structures it can stay there for a long time," says Dr. Goldman, a former assistant administrator at the EPA. She adds that the oil could seep into storm drains and sewers and spread through the city. "Literally the environment around the city would become polluted from it," she says.

The U.S. Coast Guard says it is helping clean up as many as six separate oil spills in Louisiana, including the one in Meraux. The other spills occurred along the Louisiana coast, south of New Orleans at facilities owned by Chevron Corp., Royal Dutch/Shell and others. Most of the discharged oil -- totaling more than 5.4 million gallons, according to the Coast Guard -- was contained by retaining systems around the storage tanks, although there was some reported leakage beyond the protective walls. (By comparison, the 1989 Exxon Valdez spill in Prince William Sound in Alaska was about 11 million gallons.)

Other areas of concern to environmental officials in New Orleans include a federal Superfund site near the Industrial Canal where a school and housing were built on top of a former landfill. That area was underwater for days. Before the hurricane, cleanup crews had removed soil that may have been contaminated with arsenic and lead and capped the area with a special covering. The site was in the process of being taken off the Environmental Protection Agency's national priority list of polluted sites when the hurricane hit. While the EPA won't speculate on whether the flood may have stirred up buried pollutants, "we don't know what lies before us with regard to that site," said Stephen Johnson, head of the agency.

The Washington, D.C.-based National Environmental Trust has identified 66 chemical plants and petroleum refineries and storage facilities in the Louisiana parishes hardest hit by the hurricane.

Last Tuesday, a team of eight scientists from the Centers for Disease Control and Prevention and the EPA, led by Dr. Henry Falk, a government expert in environmental hazards and their health effects, arrived in Baton Rouge, La., to assess the environmental hazards in New Orleans in the wake of the hurricane, and what needs to be done so people can return safely to their homes. The plan, Dr. Falk says, is to compile a list of those hazards, define who is responsible for addressing them, and pinpoint the obstacles toward fixing them or cleaning them up.

The team plans to deliver a report to the CDC and EPA soon, says Dr. Falk. Its observations and EPA testing so far show the hazards run the gamut from toxic chemicals in the floodwaters and soil to municipal issues such as making the drinking water clean again, getting sewage disposal working, and checking for gas leaks, he says. Houses will be examined for structural problems and mold damage, he says.

"I've worked on Three Mile Island, Mount St. Helens, Hurricane Hugo and Hurricane Andrew, but this is a unique situation," Dr. Falk says. "It involves a large urban area. There's a lot to coordinate. There's a staggering amount of debris."

The EPA's Mr. Johnson said that the agency is testing the floodwaters, soil and air in New Orleans for bacteria and more than 100 chemicals. So far, results of tests of the floodwaters in residential areas have consistently revealed high levels of ecoli and similar sewage-related bacteria, along with unsafe levels of lead. Mr. Johnson said he couldn't give an assessment about the overall environmental impact of the hurricane. "There are so many unknowns. We have to get the floodwaters out," he said.

Local leaders in Meraux had their first indication of the spill when a wildlife official noticed oil floating on the floodwaters after the hurricane, says Jeff McClain, director of the St. Bernard Parish Port. Little could be done since communications were cut off -- for five days no outside assistance came. When water levels dropped last week, sludge clung to trees and grass, houses and buildings. Cars and boats are scattered haphazardly on rooftops and streets. Abandoned dogs, many slick with oil, walked feebly along the median of Judge Perez Drive.

Three men in yellow hazardous material slickers used large squeegees to push through a petroleum slush that was as deep as a foot along Judge Perez Drive late last week. The men worked about a half-mile away from the refinery, piling up the sludge so it could be vacuumed into a pair of waiting tanker trucks. The sludge had the consistency of pudding, and the smell of petroleum hung heavy in the air.

On side streets, what appeared to be oil was thinner and ran deep in the streets. The brown stain of oil marked the high water points on buildings in the neighborhood, which run up to the boundaries of the refinery. A burnt line of grass on the main street's median marked the level the oil had reached when the water disappeared, well over a foot deep. On the southeast end of the refinery property, two men emptied the contents of a tanker truck, using a small pump to drain it into a canal. Mr. Fitzgerald, the Murphy spokesman, says he didn't know whether the canal was part of the spill-containment system or whether the workers were employed by Murphy.

The Coast Guard said Friday that more than 67,200 gallons had been recovered from the spill. For the last several days, volunteer emergency crews from Macon, Ga., Baltimore and other parts of Louisiana have donned protective gear in Meraux, searching for hurricane survivors or the bodies of victims whose presence could hamper the cleanup. Bulldozers have spread sand on the street to soak up the crude. Meraux's toxicity level is so high that vehicles leaving the area must pass through a decontamination spray.

Stragglers found in recent days have been given decontamination baths. "It's about as apocalyptic as you can imagine," St. Bernard Parish Sheriff Jack Stephens says.