choice (a) uses a COMMA + -ING modifier -- a very common construction -- and uses it incorrectly.
the short version:
COMMA + -ING modifiers modify the ENTIRE PRECEDING CLAUSE (including the subject of that clause).
the long version:
see here
post30766.html#p30766
...so, according to this COMMA + ING modifier, it is actually "The Environmental Protection Agency’s proposal" that is "saying that the move will exacerbate the nation’s fuel supply problems", while (or because of) sparking a counterattack by the oil industry.
that doesn't make sense.
--
re: (c)
actually, "which" should indeed refer to the oil industry, because the oil industry is saying that the proposal will exacerbate the nation's fuel supply problems.
this is a response to the proposal, not the content of the proposal itself.