UPDATE 3-US cracks down on mountaintop coal-mine permits

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NEW YORK, Sept 11 (Reuters) - U.S. environmental regulators said on Friday they will scrutinize 79 applications for mountaintop coal-mine permits in Appalachia to guard against damage to water supplies.

“Release of this preliminary list is the first step in a process to assure that the environmental concerns raised by the 79 permit applications are addressed and that permits issued are protective of water quality and affected ecosystems,” U.S. Environmental Protection Agency Administrator Lisa Jackson said in a statement.

In mountaintop mining, companies blast the tops of hills with dynamite to get to the coal seams. The resulting rubble is pushed off the mountains into valleys below, often burying streams.

The move was seen as a sign that President Barack Obama, who has put environmental and energy issues high on his agenda, is serious about slowing down mountaintop mining.

“This administration is full force headed down the path where it wants to stop this practice,” said Dan Scott, an analyst at Dahlman Rose & Co in New York.

Scott said the move would likely benefit mining companies, like Consol Energy Inc CNX.N, that have low-cost underground operations as opposed to mountaintop mining.

The EPA said it will work with the Army Corps of Engineers to ensure that the proposed projects will not harm water supplies.

Environmentalists praised the EPA’s move.

“By recommending these permits not be approved, the EPA and the Army Corps have demonstrated their intention to fulfill a promise to provide science-based oversight which will limit the devastating environmental impacts of mountaintop removal mining,” Willa Mays, executive director for Appalachian Voices, said in a release.

In the next 15 days, the EPA will evaluate the preliminary list of projects slated for further review and transmit a final list to the Army Corps. Then environmental issues over particular permit applications will be addressed during a 60-day review process triggered when the Corps informs EPA that a particular permit is ready for discussion. (Additional reporting by Matthew Robinson; Editing by Walter Bagley)