The U.S. Environmental Protection Agency was to move ahead Friday with a rule requiring cleaner gasoline and lower-pollution vehicles nationwide, amounting to one of President Barack Obama's most significant air pollution initiatives, according to people briefed on the decision.
The proposed standards would add less than a penny a gallon (3.8 litters) to the cost of gasoline while delivering an environmental benefit akin to taking 33 million cars off the road, according to a senior administration official, who spoke on condition of anonymity because the announcement had not been made yet.
Oil industry officials said the cost would be at least double the administration's estimate and could add up to 9 cents a gallon in some places.
The proposed standards, which had been stuck in regulatory limbo since 2011, would reduce the amount of sulfur in U.S. gasoline by two-thirds and impose fleetwide pollution limits on new vehicles by 2017.
The Obama administration's decision to proceed with the regulations deals a blow to the oil and gas industry, which had mobilized dozens of lawmakers in recent days to lobby the White House for a one-year delay.
It also comes as the government angered many environmentalists by weighing a delay in limits on greenhouse gas emissions from new power plants. Unlike the sulfur limits, the administration has argued, the power station limits could immediately hurt the struggling economy.
While gasoline sulfur itself does not pose a public health threat, it hampers the effectiveness of catalytic converters, which in turn leads to greater tailpipe emissions. These emissions — nitrogen oxides, volatile organic compounds, carbon monoxide and fine particles — contribute to smog and soot, which can cause respiratory and heart disease.
The regulations are supported by environmental advocates, state regulators and even automobile companies, which would prefer uniform sulfur standards for fuel nationwide. But oil industry officials and their congressional allies say it will cost up to $10 billion to upgrade refineries and an additional $2.4 billion in annual operating costs.
Both public health advocates and the government say the ultimate cost would be much lower because of provisions giving refiners flexibility in complying with the standards. The Environmental Protection Agency estimates annual health benefits of up to $23 billion by 2030.
The EPA surveyed 111 U.S. refineries and found that 29 already can meet the sulfur standard or come close to it, 66 can reach it with modest modifications and 16 would require a major overhaul.
The requirements also have the potential to cut major contributors to smog-forming ozone and pollution — nitrogen oxides by 80 percent and particulate matter, or soot, by 70 percent, according to the administration official.
S. William Becker, executive director of the National Association of Clean Air Agencies said the new standard could be "the most significant air pollution policy President Obama will adopt in his second term. . . . There is not another air pollution control strategy that we know of that will produce as substantial, cost-effective and expeditious emissions reductions."
Automakers have lobbied in favor of the rule in part because they must already meet stricter standards in California.
"Cleaner cars will need the cleaner fuels already on sale across Europe and Asia," said Auto Alliance spokeswoman Gloria Bergquist, whose group represents several major automakers. "And the best part of these low-sulfur fuels is that they provide clean air benefits to all 250 million vehicles on the road right away from day one at the gas pumps."
Charles Drevna, president for the American Fuel and Petroleum Manufacturers, said the EPA is not obligated under the Clean Air Act to reduce the sulfur content of gas any further. U.S. refiners have lowered gasoline sulfur nearly 90 percent since 2004, according to the association, from 300 to 30 parts per million. "Those remaining molecules of sulfur that are left, those little buggers don't want to come out easily," Drevna said.
But environmentalists and public health advocates say reducing sulfur content is particularly important for more than a third of Americans who live in communities that do not meet federal air quality standards.