A senior Environmental Protection Agency official, after meeting twice with executives from Abbott Laboratories, recently overruled agency scientists to allow an Abbott plant in Puerto Rico to save $1 million a year by emitting far more sulfur dioxide than her staff had recommended.

Jacqueline E. Schafer, EPA's regional administrator in New York, decided in January to allow Abbott to burn the dirtier fuel after company officials told her that otherwise they might have to cancel the planned diesel generator plant in Puerto Rico.

Abbott's attorney, Winfred O. Craft Jr., who had worked with Schafer when both were Republican aides to the then-Senate Interior Committee in the mid-1970s, called her to set up the meetings, Schafer said.

She also confirmed that she had known two other participants, Craft's law partner and Abbott's Washington representative, on Capitol Hill but said that these personal contacts had no effect on her decision.

EPA career staff members had told Schafer in internal memos that burning the higher sulfur fuel was "not allowable from a legal standpoint" and that Abbott's request was "the most environmentally harmful" alternative. They also said that using the dirtier fuel would bring the area's relatively clean air 64 percent closer to the federal ceiling for allowable pollution.

"It was strictly a judgment call," Schafer said in an interview. "You can argue with the decision, but it was not made in haste or in a vacuum. I may end up being wrong, but to me this seemed like a reasonable decision.

"I knew there could be an appearance problem here. These are people who are using their influence to help the men who pay them. But it was no great revelation that I knew these folks. I know hundreds of people from the Hill."

Schafer said that she and Craft were not "particularly close."

EPA's 10 regional administrators, the top political appointees in their parts of the country, have received new attention in the weeks since 13 senior agency officials here resigned. Two of the regional administrators, including Denver regional chief Steven Durham, subsequently have quit and it is not clear whether the others hired by former administrator Anne M. Burford will be retained.

Schafer, an assistant to former senator James Buckley (R-N.Y.) and Sen. Robert T. Stafford (R-Vt.) before heading EPA's New York-New Jersey region, oversees nearly one-fourth of the nation's hazardous-waste sites and is responsible for enforcement in Puerto Rico and the Virgin Islands.

Abbott, one of the largest employers in Puerto Rico, needed an EPA permit to generate power for its pharmaceutical plant in Barceloneta. But, under a program called prevention of significant deterioration, the EPA is required to keep air quality from dropping below a certain level in such relatively clean areas.

EPA scientists said that Abbott's proposal would "use up" 64 percent of the area's available increment for further pollution. Once the 100 percent ceiling is reached, the EPA cannot allow any new industry in the area unless older plants are shut down.

Abbott originally had proposed burning fuel that has a 2.5 percent sulfur content, the highest sulfur fuel available on the island. This would have released 1,977 tons of sulfur dioxide into the air each year. Abbott later agreed to use 2 percent sulfur fuel, which would emit 1,610 tons of the pollutant each year.

But Schafer's air-facilities branch, saying it "has no choice" under the law, ruled that Abbott must use more expensive fuel with a 1.5 percent sulfur content, which would produce 1,155 tons of sulfur dioxide a year, or 823 tons less than Abbott's original proposal. The decision would set a precedent for several other drug companies planning to expand in the area, the staff said.

Using the current market price of oil, the EPA staff said that it would cost Abbott an additional $550,000 annually to buy the lower sulfur fuel. But Abbott officials submitted an analysis of projected prices and contended that the additional cost would be about $1 million a year.

Schafer said that air pollution "is not my area of expertise," but that after Craft set up the two meetings in her office, "they really made an honest presentation. I felt there was a fairly good chance they might scrap the project."

Schafer's memo on her decision, allowing Abbott to use fuel having a 2 percent sulfur content, adopted most of the company's economic arguments and financial estimates. She wrote that the cleaner fuel would mean "an excessively high cost which may jeopardize the viability of the project," that "unemployment in the area is very high," and that her ruling "should not necessarily be considered as precedent-setting." She did not mention the environmental impact.

David Jones, an Abbott vice president in Chicago, said that the new generator would cause less pollution than the fuel the firm now buys from Puerto Rico. He said that Schafer's decision "made the difference between whether the plant was feasible or not. A very detailed technical presentation was made, and we're confident that's how the decision was made."

Craft did not return phone calls seeking comment.