The new rules would bring the rest of the country's sulfur standards in line with California's gasoline program.
The oil industry and members of Congress from oil states have criticized the standards as onerous with few health benefits in return. Environmentalists have countered that the rules would improve public health considerably.
The proposed rules would place a cap of 10 parts sulfur per million parts, compared with a cap of 30 now. Once final, the rules would go into effect in 2017.
Reducing sulfur in gasoline helps vehicles' catalytic converters work more efficiently, which means they remove more of the nitrogen, volatile organic compounds and carbon monoxide that exacerbate respiratory ailments. The auto industry and many states back the new rules.
"Using lower-sulfur gasoline in cars currently on the road will reduce as much pollution as taking 33 million cars off the road," said Paul Billings, senior vice president of the American Lung Association. "This pollution triggers asthma attacks, worsens lung and heart health and can even lead to early death."
The oil industry argues that the proposed standards would make refineries use more energy, driving greenhouse gas emissions higher. It contends that outfitting refiners to comply with the new rules could push up the price of gasoline by as much as 9 cents a gallon.
"There is a tsunami of federal regulations coming out of the EPA that could put upward pressure on gasoline prices," said Bob Greco of the American Petroleum Institute.
"Consumers care about the price of fuel, and our government should not be adding unnecessary regulations that raise manufacturing costs, especially when there are no proven environmental benefits."
California has had a cap of 20 parts sulfur per million since 2011, but refineries routinely deliver fuel at 8 or 9 parts per million, said Stanley Young, spokesman for the state's Air Resources Board.
The lower sulfur concentrations have led to "substantial reductions in air pollution" and added 3 to 5 cents to the cost of a gallon of gasoline, Young said.
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