In a controversial move, the EPA has decided to sharply reduce the level of sulfur allowed in diesel fuel, calling diesel emissions a serious health hazard. The agency’s announcement came as a coalition of state and local air pollution agencies was planning to release a new study today that found that toxic chemicals from diesel exhaust are responsible for at least 125,000 cases of cancer over the length of a lifetime. The state and local officials want a 97 percent cut in sulfur levels, while oil refiners complain that such a reduction would be too much of a burden and suggest a 90 percent cut instead. The EPA has not yet announced how big a cut it will propose, but is expected to unveil its plan in a few months.