EPA ruling over climate jeopardizes coal plants

NEW YORK Fri Nov 14, 2008 2:11pm EST

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NEW YORK (Reuters) - U.S. environment regulators late Thursday rejected a permit for a new coal-fired power plant in Utah over the issue of its greenhouse gas pollution, putting in question the future of new coal plants that do not to curb their emissions.

The Environmental Protection Agency's appeals panel rejected the permit issued by its Denver office, saying it had failed to support a decision to grant the plant a permit without requiring the best available controls to limit carbon dioxide, the main gas blamed for warming the planet.

It ruled Denver would have to reconsider why it did not require the plant to have the CO2 controls.

Deseret Power, a group of six cooperatives that wants to build the 110 megawatt plant on the Uintah and Ouray Indian Reservation near Bonanza, was not immediately available for comment.

Lawyers for an environmental group that had sought the review of the regional permit said the decision puts into question the fate of dozens of planned coal-fired power plants.

"The bottom line is this leads to delays for coal plants," David Bookbinder, a lawyer for environmental group the Sierra Club.

Delays could be bad news for the industry especially as the United States may soon regulate greenhouse gases as President-elect Barack Obama has promised to do, he added.

A section of the EPA ruling said, "The Board recognizes that this is an issue of national scope that has implications far beyond this individual permitting proceeding."

Environmentalists said the wording opens up the EPA to reconsidering permits in other states.

In a landmark ruling in 2007, the Supreme Court found that carbon dioxide can be regulated as a pollutant under the U.S. Clean Air Act.

Coal plants generate about half of U.S. power. But they emit about a third of the country's carbon dioxide pollution, about the same amount as vehicles spew.

About 25 coal plants are under construction across the United States, more than in the past two decades. Another 20 projects have been permitted or are near construction and more than 60 have been announced or are in the early stages of development.

None of the commercial-scale plants plan to include equipment to capture and sock away carbon emissions underground. The coal industry says the equipment is unproven and too expensive to invest in without certainty over when and how greenhouse emissions would be regulated.

Kevin Holewinski, who heads the environmental litigation practice at corporate law firm Jones Day said the Sierra Club had "oversimplified and overstated" the ruling. He called the ruling a "punt" by the federal EPA, meaning it was a delay in making a more forceful decision.

He said, however, it was possible the ruling could serve to delay the building of other coal plants by inviting lawsuits seeking to stop them.

(Reporting by Timothy Gardner, editing by Marguerita Choy)

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