Revolt over new federal mercury law

And because mercury particles can begin dropping out of the air just a few miles from where they're emitted, state officials worry the trading system might create new mercury "hot spots" within their borders.

Illinois is another state taking a pass on CAMR, even though it's a major coal- producing state. "We are not doing CAMR or mercury trading – no trading," says Jim Ross, manager of the Illinois EPA's division of air-pollution control. "We have proposed our own mercury rule that requires greater reduction and is much faster than the federal rule."

US EPA officials say that states opting out of CAMR is no surprise.

"We always knew many states would want to do something different and that's fine," says Mr. Wehrum. "We also knew many would choose CAMR as a smart way to regulate that's economically efficient and easy to administrate."

Under the federal Clean Air Act, states can adopt clean-air plans that are stricter than a federal plan. But EPA has resisted state plans that try to limit mercury trading, going so far as threatening legal action in at least one instance, state officials say.

Montana and Michigan are among states still working on their own mercury plans. Both have felt EPA pressure to participate in trading mercury, even though they preferred restrictions on it.

"We did want some participation in CAMR trading, but not unlimited," says Charles Homer, supervisor of technical support for the Air Resources Management Bureau of the Montana Department of Environmental Quality. "But EPA told us any tampering with their trading system was not acceptable. We were either in, or out."

In the end, Montana ended up adopting EPA's trading program because coal development might have been compromised otherwise. But Mr. Homer isn't happy about it. "We were forced to participate," he says. Montana still plans deeper mercury emissions cuts than CAMR requires.

Michigan wants to trade mercury among utilities in the state, but not with utilities in the rest of the country.

"We have been in touch with the EPA and they've indicated verbally that if we prohibit interstate trading or do not submit a rule they find approvable they may take legal action," says Vinson Hellwig, chief of the air-quality division of the state's Department of Environmental Quality. "It was not a very friendly position."

Wehrum doesn't deny EPA has tried to be persuasive. But "I haven't threatened to sue anybody," he says. "That's silly."

At least 24 states – including West Virginia, Alabama, and Wyoming – are likely to embrace part or all of CAMR and its trading system. But Texas and others will do so because their state laws require it.

"The EPA could have made this a much better, tougher rule to begin with, making it less of a patchwork quilt for industry," Mr. Becker says. "They just thought states would blindly follow – and underestimated how many states would take action on their own to fill the gaps."

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