EPA objects to coal plant,Sierra Club claims new day

LOS ANGELES, Jan 23 (Reuters) - Environmentalists claimed on Friday that a new era regarding coal-fired power plants had arrived with the Obama administration after the U.S. Environmental Protection Agency turned back South Dakota's approval of a big coal-fired power plant in that state because of pollution concerns.

"EPA is signaling that it is back to enforcing long-standing legal requirements fairly and consistently nationwide," said Bruce Nilles, head of the Sierra Club's effort to stop coal power plants.

The EPA on Friday said the timing of the objection letter to South Dakota officials -- sent on Thursday in the third day of Barack Obama's administration -- was not related to the new president.

"It would be fair to say" that the letter would have been sent under the Bush administration, said Carl Daly, unit chief for EPA Region 8 air permit unit.

The proposed $1.3 billion Big Stone II plant near Milbank, is in northeastern South Dakota, near the border with Minnesota. About half of the power from Big Stone II would be sent to Minnesota.

Daly, of the EPA's Denver office, said the South Dakota Department of Environment & Natural Resources has 90 days to correct three deficiencies it noted in the Jan. 22 letter.

"We fully expect that the state will be able to address our concerns in the 90 days we have given them," said Daly.

Once those concerns are met to EPA satisfaction, construction may begin, he added. The plant would be 500 megawatts to 580 MW, enough to serve more than 400,000 homes.

Nilles still declared victory and called the EPA letter the end of the project because it would increase costs, making it too expensive to build.

Big Stone II is a joint effort of five utilities in five states, led by Minnesota-based Otter Tail Power



E-mails and phone calls to officials at Otter Tail and to spokesman for the consortium for Big Stone II were not returned.

Obama has said he supports advanced technology for coal-burning power plants that could capture the CO2 emissions. That technology is not yet commercially viable. Coal plants generate half of U.S. electricity supply.

After a lull in coal power plant construction in the 1980s and 1990s, President George W. Bush's administration pushed for coal power plant construction and utilities advanced plans for almost 200 of them starting in 2002.

Nilles said by his count 14 were constructed or are being built after receiving environmental permits -- coal advocates claim about 20 -- while 80 have been canceled largely due to state regulatory or financial pressures. Another 80 coal plants are still in the pipeline, Nilles said.

Environmentalists say Big Stone II would emit 4 million tons of carbon dioxide annually. CO2 accounts for 80 percent of greenhouse gas emissions, which scientists say causes global warming.

"As the first major coal plant decision by the EPA since President Obama took office, this decision signals that the dozens of other coal plant proposals currently in permitting processes nationwide will face a new level of federal scrutiny," the Sierra Club and Clean Water Action said Friday.

On Jan. 15, the Minnesota Public Utilities Commission unanimously approved transmission powerlines linked to Big Stone II, which was believed to have cleared the way for construction of the plant to start. (Additional reporting by Tom Doggett in Washington)