The Bush administration is proposing new legislation to improve security standards at chemical plants that will emphasize voluntary compliance by an industry that some experts say is one of the nation's most vulnerable to catastrophic terrorist attack.

Sen. James M. Inhofe (R-Okla.) is working with the White House and the Department of Homeland Security to craft a bill that would require chemical companies to abide by standards drawn up by their industry association, rather than be subject to mandatory government measures advocated by environmental activists and many Democrats, officials said.

The Environmental Protection Agency has identified 123 chemical plants where a terrorist attack could, in a "worst-case" scenario, kill more than 1 million people.

Besides the airline industry, which tightened security as demanded by the U.S. government after the Sept. 11, 2001, attacks, the chemical industry is the first business sector that the administration has sought to regulate to lessen the danger of terrorism. Homeland Security officials are considering how to harden many elements of the nation's "critical infrastructure" -- which includes gas pipelines and water plants -- and they say chemical plants are one of the most worrisome sectors.

The administration's bill, expected to be unveiled later this month, reflects the environmental policies that President Bush and Homeland Security Secretary Tom Ridge pursued when they were the governors of Texas and Pennsylvania, administration officials and activists said.

The legislation will propose that chemical firms abide by security standards, mostly governing areas such as fencing and security cameras, promulgated by the industry's trade association, the American Chemistry Council, sources said. It also requires each firm to perform a self-assessment of its security vulnerabilities, under a plan developed by the industry council.

The measure rejects so-called "hazard reduction" requirements proposed in a competing Democratic bill. Under that legislation, the Homeland Security Department would require every plant to make use of the safest chemicals, technologies and processes available. Examples cited by the Democratic sponsors, Sens. Jon S. Corzine of New Jersey and John Edwards of North Carolina, include requiring sewage treatment plants to employ alternatives to chlorine, the widely used chemical that could release a toxic cloud if detonated.

"There are currently no federal security standards for chemical facilities -- none -- so that the private sector is left to do whatever it desires or believes it can afford," Corzine said in a Senate speech last year. "Literally millions of Americans are at risk."

Industry officials say that their plants already are safe and that government attempts to tell them how to run their facilities would amount to micro-management, which could lead to inefficiency and even danger. "Government commanding changes in our operations can create unintended risks," said Kate McGloon, a spokesman for the chemical council. "Hazard reduction is inherent in everything we do."

Administration officials say they do not favor letting chemical firms do whatever they want. "Voluntary efforts alone won't be sufficient to assure the appropriate level of security across the chemical sector," said Brian Roehrkasse, a spokesman for the Homeland Security Department.

Last July, Ridge told a Senate committee that there are valid concerns about security deficiencies at "dozens and dozens" of chemical plants, but that he hoped ad hoc industry efforts would preclude any legislation.

But two weeks later, a chemical security bill sponsored by Corzine passed the Senate Environment and Public Works Committee, 19-0. The petrochemical industry then launched an intense lobbying campaign to upend Corzine's proposal for mandatory security measures, prompting most Republicans on the panel to withdraw support.

Now the committee's chairman, Inhofe, is poised to introduce a bill that embodies the administration's deregulatory principles, while Corzine and Edwards are preparing competing legislation feared by the industry.

Last month, the General Accounting Office, Congress's investigative arm, released a report praising the industry's voluntary security efforts but raising questions about whether they will prove adequate. "Despite the industry's voluntary efforts," the study said, "the extent of security preparedness at U.S. chemical facilities is unknown."

Advocates of the Democratic bill cite a recent letter written to the U.S. Public Interest Research Group, an industry critic, by a former security official at Georgia-Pacific Co. that criticized the administration's approach. The former company official, Sal DePasquale, who was recently laid off by Georgia-Pacific, had helped draw up the American Chemistry Council's voluntary security plan while he worked for the firm.

"Refusing to issue prescriptive standards essentially means the industry association is simply creating a smoke-and-mirrors exercise to make it appear that it is issuing bona fide standards," he wrote. "It is not."

He also wrote that because of cost concerns, the industry has resisted suggestions that it upgrade the training of its security forces to allow guards to carry guns. "Across the country there are huge storage tanks with highly dangerous materials that are far from adequately secured," DePasquale wrote, adding that the industry's stances amount to "window dressing."

The chemical council's McGloon said that security is adequate at its plants and that criticism of the industry for compromising safety because of cost concerns is "ridiculous."

Sen. James M. Inhofe (R-Okla.) is working with the White House on a bill to let the chemical industry set its own security standards.