UPDATE 2-U.S. proposes tighter rules on soot pollution

Fri Jun 15, 2012 2:07pm EDT

* EPA says affects only 6 U.S. counties at present

* Agency acted under court order after state lawsuits

* Republicans critical of EPA rules, impact on jobs

* EPA says cost of rule offset by health savings (Adds background, Republican comment, EPA estimates of costs and benefits)

By Timothy Gardner and John Crawley

WASHINGTON, June 15 (Reuters) - The Obama administration proposed stricter standards to control harmful soot from heavy industry on Friday, a move expected to save lives but which drew criticism from Republicans and industry worried the costs of compliance will hurt the economy.

Under a court order, the Environmental Protection Agency proposed tightening exposure to the particulate pollution that threatens the elderly, people with heart disease, and children.

The move was welcomed by environmental groups, an important part of President Barack Obama's base of support. But it will give more fuel to Republicans who have staged sharp attacks on the EPA as the Nov. 6 presidential and congressional elections draw nearer.

The standard would cut fine-particle soot to between 12 and 13 micrograms per cubic meter of air from 15 micrograms. The EPA said the cost of compliance would be more than offset by healthcare savings.

At the moment only six U.S. counties, including ones in California, Arizona, Alabama, Michigan and Montana are out of compliance with the standard, the EPA said. Diesel exhaust from trains and ships, as well as construction operations, have made soot a problem in those places.

But industry groups fear far more counties that contain oil and gas plants and other heavy industry could eventually violate the standard and be forced to add pollution control.

"We are concerned that it could come at a significant economic cost and lost investments and limit our ability to produce the energy our nation needs," said Howard Feldman, the head of regulation at the American Petroleum Institute, the main lobby group for the oil industry. Feldman said the rule could eventually hit power plants and refineries in the Midwest, Texas and the East Coast.

Republicans in Congress have fought a suite of EPA air pollution rules this year, saying they will add billions of dollars in costs to heavy industries and kill jobs. It has mostly been an uphill battle as Democrats control the Senate.

"Despite the ongoing economic challenges facing our country, the Obama-EPA continues to roll out strict environmental standards that cause severe economic strain on state and local communities, millions of lost jobs, and skyrocketing energy prices," said Republican Senator James Inhofe.

The Obama administration was forced to act on the standard ahead of the Nov. 6 election after California, New York and nine other states on the coasts sued the EPA to act.

Barbara Boxer, the chairman of the Senate environment committee, and who is from California, said the proposal is "an important step forward in protecting our families and children."

The EPA, which expects to finalize the proposal by Dec. 14 after a public comment period, estimated the rules will cost industry from $2.9 million to $69 million a year, depending on the final level of the standard.

Benefits from lower health care bills would range from $88 million to $5.9 billion a year, it said.

Paul Billings, a vice president at the American Lung Association, a health group that had joined the states on lawsuits that prodded the EPA to act, said the clean air laws have had strong support from both Democrats and Republicans since 1970.

Billings was confident both parties want strong laws to protect health. "We will work to ensure that whoever is in Congress in the future will understand the health benefits of strong soot standards," he said.

Republicans believe they could pick up enough seats in the Senate in the election to gain control of that chamber and turn back EPA rules.

Inhofe, the ranking Republican on Boxer's committee, plans to introduce a measure next week that would stop the EPA from implementing a rule on toxic emissions from coal-fired power plants. (Reporting By Timothy Gardner and John Crawley; Editing by Peter Cooney, M.D. Golan and Tim Dobbyn)

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