Thursday, January 7, 2010 - 5:45pm

WASHINGTON — The Environmental Protection Agency proposed a stricter new standard for smog-causing pollutants on Thursday that, if adopted, will impose large costs on industry and local governments but will also bring substantial health benefits to millions of Americans.

The proposed standard would replace one set by the Bush administration in March 2008, which has been challenged in court by environmental advocates as too weak to adequately protect human health and the environment.

The Obama administration’s proposal sets a primary standard for ground-level ozone of no more than 0.06 to 0.07 parts per million, to be phased in over two decades. The new rule would replace the standard of 0.075 parts per million imposed by the Bush administration. The agency is also proposing a secondary standard that will vary with the seasons to protect plants and trees from repeated exposure.

The agency estimated that complying with the new standard will cost $19 billion to $90 billion a year by 2020, to be largely be borne by manufacturers, oil refiners and utilities. But the agency said that those costs would be offset by the benefits to human health, which it valued at $13 billion to $100 billion a year in the same period.

If the stricter standard of 0.06 parts per million is adopted, agency analysts project that as many as 12,000 premature deaths from heart or lung diseases could be avoided, along with thousands of cases of bronchitis, asthma and non-fatal heart attacks.

“E.P.A. is stepping up to protect Americans from one of the most persistent and widespread pollutants we face,” Lisa P. Jackson, the agency’s administrator, said in a statement. “Smog in the air we breathe poses a very serious health threat, especially to children and individuals suffering from asthma and lung disease. It dirties our air, clouds our cities and drives up our health care costs across the country.”

Smog or ground-level ozone is not emitted by a single source, but is formed by a reaction of nitrogen oxides, volatile organic compounds, carbon monoxide and methane in the presence of sunlight. The main sources of these pollutants are power plants and factories, fumes from volatile solvents, vehicles emissions and gasoline vapors. Smog is worse in the summer because of heat and sunlight, and can travel hundreds of miles from its source to pollute wilderness areas.

The new standard would force dozens of counties that meet the current law to take costly steps to get back into compliance. Still, the leader of an association of government air quality enforcement agencies welcomed the proposal.

“This is exactly what states and localities have advocated for 30 years,” said S. William Becker, executive director of the National Association of Clean Air Agencies. “This will not be easy to achieve, whichever number the E.P.A. ultimately chooses, but it’s a decision that will ensure that public health is protected with an adequate margin of safety.”

He also said that the projected costs of compliance are likely to be lower than the agency’s estimate. “And the benefits will likely trump the costs many times over,” he said.

The American Petroleum Institute, the oil companies’ chief lobby, criticized the proposal as costly and likely to be ineffective. The group said that there was no new scientific basis for changing the standard set at the end of the Bush administration.

“To do so is an obvious politicization of the air quality standard setting process that could mean unnecessary energy cost increases, job losses and less domestic oil and natural gas development and energy security,” the group said in a statement issued minutes after the agency’s announcement.