Washington (Platts)--13Mar2008

The Bush administration bowed to pressure from coal-fired electric
utilities and other industries in setting a new air-quality standard for
ground-level ozone, a key scientist involved in the process said Wednesday.

Rogene Henderson, the chairwoman of a congressionally chartered panel
known as the Clean Air Science Advisory Committee said the US Environmental
Protection Agency issued a weaker ozone standard than it should have because
of pressure from the energy industry.

Henderson, a senior scientist at the Lovelace Respiratory Research
Institute in Albuquerque, New Mexico, said she disagreed with EPA
Administrator Stephen Johnson's decision to set a weaker standard than her
advisory group had recommended.

"I think [Johnson] is responding to the pressure of the industrial groups
about the cost," Henderson said.

However, EPA is prohibited by law and a landmark Supreme Court ruling
from considering cost factors when setting air-quality regulations. Instead,
the agency is supposed to make the regulations as stringent as they need to be
to protect public health.

Johnson announced earlier Wednesday (Story, 2239 GMT) that EPA would
tighten the ozone standard to 75 parts per billion, a more stringent level
than 80-ppb level that was set in 1997 during the Clinton administration. EPA
rejected CASAC's call to set the standard at an even more stringent 60-ppb to
70-ppb level.

"That's not what we would have preferred at all," Henderson said of EPA's
decision, adding that she believes EPA issued a weaker standard because "we
are a country that is highly dependent on fossil fuel." She noted that motor
vehicles and coal-fired power plants both contribute to formulation of smog
through emissions of nitrogen oxide.

Henderson said that if EPA had set a tighter standard, it would have
given electric utilities and other industries an "impetus" to devise cleaner
forms of energy.

Even so, the 75-ppb standard that EPA set Wednesday does deal 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.

John Kinsman, director of air quality programs at the Edison Electric
Institute, a trade group of large 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
had urged EPA to set an even stricter standard, on the order of the 60 ppb
that CASAC had recommended.

"EPA has taken a baby step instead of the strong action doctors say is
needed to protect our lungs," said David Baron, an attorney at Earthjustice.

Meanwhile, some Democratic lawmakers called on EPA to explain why it had
rejected CASAC's advice and set a weaker standard. Henry Waxman, Chairman of
the House of Representatives Oversight and Government Reform Committee,
suggested that EPA did so in order to appease the energy industry.

Waxman, in a letter to Johnson, said EPA's new standard "suggests that
science is not the primary basis for your decisions."

Johnson, in a teleconference with reporters earlier Wednesday, rejected
that type of allegation. Johnson said repeatedly that he based the standard on
the available science and the requirements of the federal Clean Air Act.

"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.

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

After EPA publishes the new standard in the Federal Register, any
stakeholders that are not happy with will have 60 days to sue the agency over
the measure.

Assuming that the standard is not struck down through a lawsuit, states
would have to start submitting their plans to meet the standard in 2013.

A huge legal battle erupted when EPA last tightened the ozone standards
during the Clinton administration. A host of industry groups sued EPA over the
move, saying the agency had no scientific basis for strengthening the
standard. The case went all the way to the Supreme Court, which rejected the
challenge and ruled that EPA could tighten the standard regardless of the
economic costs of doing so.
--Brian Hansen, brian_hansen@platts.com