By Ayesha Rascoe and Timothy Gardner
WASHINGTON (Reuters) - The Obama administration on Wednesday unveiled the first-ever standards to slash mercury emissions from coal-fired plants, a move aimed at protecting public health that critics say will kill jobs as plants shut down.
Facing fierce opposition from industry groups and lawmakers from coal-intensive states, the Environmental Protection Agency said the benefits of the Mercury and Air Toxics Standards, or MATS, will greatly outweigh the costs.
EPA Administrator Lisa Jackson revealed the rules, which have been about 20 years in the making, at a Washington, D.C. children's hospital. Mercury can harm the nervous systems of developing fetuses and infants and can enter the food stream through contaminated fish.
"By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health," said Jackson, whose agency hopes to start enforcing the rules over the next several years.
While the rule mostly adhered to the tough proposal on mercury, arsenic, chromium and other pollutants made earlier in the year, there were some differences.
The rules will cost utilities about $9.6 billion annually, down more than $1 billion from the EPA's earlier estimate due to "flexibilities" that were added to the final regulation, the agency said.
The EPA also said it will push permitting authorities in the states and cities to make "broadly available" a fourth year for polluters to invest in technology needed to cut the emissions.
One of a raft of clean air standards the agency is launching, the mercury standards have divided the power industry.
Companies including Exelon and NextEra that generate most of their power with "clean" fuel sources such as nuclear, natural gas and renewables have supported the mercury standards, while those that get most of their power from coal, including American Electric Power and Southern have vigorously fought them.
The standards pleased environmentalists and public health advocates, an important part of President Barack Obama's voter base, who slammed his decision in September to delay a landmark rule on smog emissions.
DRIVING PLANT CLOSINGS
While the EPA stressed the flexibility of the final rules, power industry lobbyists said the agency still did not allow enough time for compliance.
Scott Segal, a lobbyist at Bracewell & Giuliani, said the rules will result in the loss of more than 1.4 million jobs by 2020 as utilities are forced to shut old coal-fired power plants. He estimated that for every temporary job created in technologies to clean up power plants four higher paying jobs, often union ones, will be lost.
"The bottom line: this rule is the most expensive air rule that EPA has ever proposed in terms of direct costs," Segal said. "It is certainly the most extensive intervention into the power market and job market that EPA has ever attempted to implement."
Rob Patrylak, a managing director of Black & Veatch, a consulting, engineering and construction company, said of all the EPA clean air rules, the MATS rule will force the largest number of coal-plant retirements. Unlike other recent clean air standards, such the Cross State Air Pollution Rule that seeks to cut emissions that move downwind from power plants, the MATS rule does not allow utilities to trade pollution credits to comply.
"MATS is really what's driving the decision," for companies to shut some of their coal plants, he said.
Energy analysts have said the EPA's mercury rule, along with the cross state, cooling water and coal ash rules could shut up to 70,000 megawatts of coal-fired generation.
The EPA estimated that MATS will save $90 billion in healthcare costs by 2016 as technology to cut mercury emissions also reduces emissions of fine particulates, which can damage hearts and lungs. When combined with other EPA rules, thousands of lives will also be saved, it said.
Environmentalists praised the administration for pushing through tough rules. "EPA will take a significant step toward cleaner air, and we hope to see more progress to protect public health from air pollutants, including greenhouse gases, in the New Year," said Kevin Kennedy, US climate director at the World Resources Institute, said in an email.
Republican lawmakers quickly pounced on the new mercury rules, vowing to stop the regulations.
James Inhofe, the senior Republican senator on the Environment Committee, said he would try to overturn the rule using a "joint resolution of disapproval," a tool that faces an uphill battle in the Democratic-controlled Senate. Inhofe called the rule "a thinly veiled electricity tax" that will hurt jobs.
Jackson, who spoke during her announcement about her two sons' struggles with asthma, said she was not surprised that lawmakers were threatening to derail the regulations, but ultimately these rules were long overdue.
"These standards are 22 years in making. They are what the American people deserve after waiting so long," Jackson said. "My belief is that if we started hiring engineers instead of lobbyists and...scientists instead of lawyers, we would be able to do our job for the American people."
(Additional reporting by Roberta Rampton and Eileen O'Grady in Houston; Editing by Alden Bentley and Bob Burgdorfer)