U.S. Supreme Court justices voiced skepticism during a Nov. 7 hearing about ordering the federal government to change decades of clean air policy and begin considering compliance costs — not just health benefits — in setting nationwide air quality standards.

The case, considered one of the most significant environmental cases before the court in years, was brought by several industry groups and the states of Ohio, Michigan and West Virginia.

They charge that the EPA overstepped its authority in issuing strict new air quality standards in 1997, and contend that the agency must weigh the cost of reducing harmful emissions against the benefits of improved air quality. Ohio officials have estimated the state’s industries might have to spend $2 billion a year to implement those standards.

Although aimed at protecting public health, the new standards put forth by the EPA — which have been on hold because of court challenges — would also benefit the Bay because it would result in further reductions in nitrogen oxide emissions, a major source of nitrogen to the Chesapeake.

During the hearing, Justice John Paul Stevens said the industry groups appeared to be seeking a rule that the EPA must set air quality standards “to protect the public health, provided it doesn’t cost too much.”

Chief Justice William H. Rehnquist told the industry groups’ lawyer, “You say you don’t know how we can live with” a requirement that the EPA consider only health issues and not costs. “We have lived with it for 20 years” since a lower court decided that issue, the chief justice added.

Justice Ruth Bader Ginsburg questioned how a cost-benefit analysis would work. “You are adding something that will create another morass,” she said.

The justices are expected to issue a ruling by July that could have a major impact on clean air rules and possibly on regulatory actions by other federal agencies.

The Clean Air Act, adopted in 1970, requires the EPA to set national air quality standards to “protect the public health.” The agency is to use criteria that “accurately reflect the latest scientific knowledge” for identifying pollution’s effects on health.

The Clinton administration is asking the justices to reverse a lower court ruling that said the EPA went too far in adopting tougher clean air standards in 1997. The appeals court ruled for the industry groups on that question but rejected their argument that the EPA should consider the cost of compliance in setting air-quality standards.

Edward Warren, representing the American Trucking Associations, U.S. Chamber of Commerce and other business groups, said the EPA “wishes to regulate every nook and cranny of this environment for air pollution reasons” without a clear standard for doing so. “There has to be some common sense brought to bear” by balancing costs and health benefits, he added.

Solicitor General Seth Waxman, representing the government, said, “The health in this country is vastly better now than it was in 1970.” Under the clean air law, the EPA does not consider compliance costs in setting the standard, but it does consider costs in deciding how states will try to meet the standard, Waxman said.

Justices Stephen G. Breyer, Antonin Scalia and Sandra Day O’Connor also expressed doubts about requiring a cost-benefit analysis.

Several justices also questioned Waxman closely about how much leeway the EPA believes it has to set the air-quality standard.

“How do you decide how much risk is too much risk, or is that just up to the agency?” Scalia asked.

In 1997, the EPA adopted air standards that imposed new limits on soot and ozone, a major component of smog. They were challenged by industry groups, and a federal appeals court in Washington, D.C., blocked the EPA from enforcing the rules in May 1999.

Some observers believe that if the Supreme Court decided the EPA took too much of Congress’ power when it set the clean air rules, it could affect the regulatory power of other federal agencies with broad congressional mandates. For example, federal law directs the Federal Communications Commission to regulate broadcasting in the “public interest.”