Washington (Platts)--12Mar2008

The Bush administration strengthened the US air-quality standard for
ground-level ozone Wednesday, dealing a potentially expensive financial blow
to electric utilities, oil refineries and other industries that may have to
install billions of dollars of new pollution controls to comply with the
measure.

But environmental groups also objected to the new standard, saying it is
too weak to adequately protect public health. Green groups also complained
that the new standard is weaker than what a congressionally charted panel of
scientists had recommended.

The regulation, issued by the US Environmental Protection Agency, updates
the existing 11-year-old standard for ozone, one of the primary components of
smog. EPA set the standard at 75 parts per billion, tightening it from the
80-ppb level set during the Clinton administration.

EPA was under court order to revise the standard by midnight Wednesday
because of a lawsuit filed by environmental groups that accused EPA of
stalling on the standard.

EPA Administrator Stephen Johnson said the new standard meets the
requirements of the federal Clean Air Act. The act requires EPA to
periodically review the standard to ensure that it is as stringent as it needs
to be to protect public health, regardless of costs borne by electric
utilities and other industries.

"While the standards I signed today may be strict, we have a
responsibility to overhaul and enhance the Clean Air Act to ensure it
translates from paper promises into cleaner air," Johnson said.

Ozone has been linked to asthma, heart attacks and other serious medical
conditions, and it is responsible for thousands of illnesses and premature
deaths annually, according to EPA and public health organizations.

Tightening the standard could heap hundreds of millions of dollars of new
regulatory costs on coal-fired power plants, which contribute to the
formulation of smog through emissions of nitrogen oxide.

The proposal could also lead to new and expensive pollution-control
requirements for the transportation sector, which is the single largest single
source of smog-causing pollutants.

John Kinsman, director of air quality programs at the Edison Electric
Institute, a trade group for utilities, said tightening the standard is "the
wrong call."

He said the science does not support strengthening the standard, and that
the price tag of the move could reach into the billions of dollars.

"In order to meet a tighter standard, states will have to seek emissions
cuts from a wide range of sources -- large and small -- throughout the
country," he said.

Karen Matusic, a spokeswoman for the American Petroleum Institute, echoed
that view. "The uncertainty in the latest science does not support tightening
the standards," she said.

"Changing the ozone standards will not, by itself, improve air quality,
but will result in unnecessary negative economic consequences for the American
people," she added.

Environmental and public health groups were also disappointed, as they
urged EPA to set an even stricter standard in the order of 60 ppb.

--Brian Hansen, brian_hansen@platts.com