New federal standard aimed at reducing smog causes concern among industries in the Southwest

The Obama administration took steps this week to cut levels of smog-forming pollution linked to asthma and other respiratory problems, but meeting the stricter emissions limits is expected to cost industries billions of dollars.

Utilities that run coal-fired power plants in the Southwest, oil and gas operations throughout New Mexico, Arizona and Colorado, and other businesses could feel the pinch.

If counties run afoul of the proposed ozone regulations, virtually any industry could be targeted and forced to shut down some of their operations, said Wally Drangmeister, with the New Mexico Oil and Gas Association. That could affect the tax revenue states get from oil and gas and other industries.

"I won't go as far as saying this is shutting down all economic growth in the U.S., but it has the potential to really impact many, many things way above and beyond what virtually anybody thinks would be a reasonable path forward for environment protection," he said.

The U.S. Environmental Protection Agency is proposing to limit ozone emissions to a range of 65 to 70 parts per billion. The agency will also take public comments on an even stricter standard of 60, as well the existing standard of 75 that President George W. Bush put in place in 2008.

Cutting ozone emissions to 70 parts per billion would cost industry about $3.9 billion in 2025, the EPA estimated, while a stricter limit of 65 would boost the price to $15 billion. A cost that high would exceed that of any previous environmental regulation in the nation.

A final decision is expected next year.

More than 30 counties in New Mexico, Arizona and Colorado have levels above the lower end of the range, the EPA says. Some of those counties include the region's most populous cities; others cover areas where oil fields and refineries are located.

Environmentalists argue the push for a new standard should serve as a wake-up call for state regulators that more needs to be done to address ozone, which forms when chemicals emitted by power plants, cars, refineries and factories react in sunlight.

Jeremy Nichols, with the group WildEarth Guardians, said New Mexico and Colorado are dealing with similar issues when it comes to emissions and may have to limit oil and gas activity, while Arizona has seen unchecked urban growth.

"This is going to be a paradigm shift for the West," Nichol said. "Our hope is we see the opportunity here and not just say there's nothing we can do about it. That would be the worst thing that could happen here."

The EPA plans to give states with the most ozone up to 2037 to come into compliance. But agency officials say most of the U.S. won't have to take action because of existing pollution programs and previous EPA limits on pollutants like mercury and carbon dioxide that have the side benefit of reducing ozone.

The EPA has already taken action in Arizona and New Mexico to limit haze-causing pollution from coal-fired power plants.

The owners of the Navajo Generating Station in Page, Arizona, face a decision to either shut down part of the plant or reduce the amount of electricity is produces.

New Mexico's largest electric provider, PNM, said its plans to shutter part of the San Juan Generating Station in the Four Corners region and install more pollution controls put it on a good path toward reducing emissions.