EPA tells coal-fired plants to reduce pollution. Some may just shut down.

[Editor's note: The headlines and story have been updated to clarify that while EPA's actions may cause some power plants to be closed, the agency is not mandating their closure.]

The Environmental Protection Agency today unveiled tough new air pollution regulations aimed at dramatically cleaning up emissions of coal-fired power plants and boosting air quality across 27 states, a move analysts say will likely cause scores of older, inefficient plants to become uneconomical and be shut down.

Effects should appear relatively quickly. Under the new Cross-State Air Pollution Rule, some 900 coal-fired, natural gas-fueled, and oil-burning power plants must slash emissions by 2014.

"This is a real milestone," exulted Frank O'Donnell, president of Clean Air Watch, a Washington-based environmental group in a statement. "This is a long-overdue and much-needed step towards protecting the health of people in states downwind of big coal burning power plants. It will prove to be a life saver."

But beyond environmentalists’ cheers, industry groups were predictably upset. Coal-state lawmakers and industry groups predict the rule will harm the economy.

"The EPA is ignoring the cumulative economic damage new regulations will cause," said Steve Miller, president and CEO of the American Coalition for Clean Coal Electricity, an industry lobby group, in a statement. "Our industry needs adequate time to install clean coal technologies to comply with new regulations."

The industry doesn’t have long. By 2014, power plants must slash emissions of nitrous oxides (NOx) by 54 percent and sulfur dioxide (SO2) by 73 percent from 2005 levels. One likely response in Congress could be legislative "riders," amendments to squelch the regulations’ impact by slashing the budgets for enforcement, said Kevin Book, senior analyst with ClearView Energy Partners, an energy market research firm.

EPA officials, however, say that the utility industry was put on notice under the Bush administration's national air pollution plan, and most began upgrading facilities years ago.

Impact on air quality and public health

Effects of the new rule will sweep across the eastern US, vastly reducing the amount of fine particulate matter that blows from power plant smokestacks in the Midwest toward the east coast, affecting over 240 million Americans along the way, EPA officials said.

Annual benefits of $280 billion from the new regulations – much of it due to reduced health impacts – will easily outweigh the estimated $800 million annual cost of implementation and $1.6 billion per year in utility industry capital investments already under way, the agency reported.

The new rule will reduce sulfur dioxide and nitrogen oxides by about 8 million tons annually. This will vastly reduce acid rain, smog, and small particulates that harm public health, say EPA officials.

“These Clean Air Act safeguards will help protect the health of millions of Americans and save lives by preventing smog and soot pollution from traveling hundreds of miles and contaminating the air they breathe,” said EPA Administrator Lisa Jackson. It will "help ensure that American families aren’t suffering the consequences of pollution generated far from home, while allowing states to decide how best to decrease dangerous air pollution in the most cost-effective way.”

The EPA's move responds to a mandate from a 2008 US Circuit Court of Appeals for the District of Columbia decision, which overturned the Bush administration's national air pollution plan. The court found that the Bush plan failed to substantially maintain air-quality standards among states – and ordered the EPA to develop a new rule.

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