Coal plant permits on hold over warming gases

updated 3:48 p.m. ET Nov. 14, 2008

WASHINGTON - The fate of scores of new coal-burning power plants is now in limbo over whether to regulate heat-trapping greenhouse gases.

The uncertainty resulted when an Environmental Protection Agency appeals panel on Thursday rejected a federal permit for a Utah plant, leaving the issue for the Obama administration to resolve.

The panel said the EPA's Denver office failed to adequately support its decision to issue a permit for the Bonanza plant without requiring controls on carbon dioxide, the leading pollutant linked to global warming.

The matter was sent back to that office, which must better explain why it failed to order limits on carbon dioxide. This is "an issue of national scope that has implications far beyond this individual permitting process," the panel said.

EPA spokesman Jonathan Shrader said the agency was reviewing the ruling by the appeals panel, which traditionally gives great deference to agency decisions.

Environmentalists and lawyers representing industry groups said the ruling puts in question permits — some being considered, others approved but under appeal — of perhaps as many as 100 coal plants.

"It's going to stop everything while EPA mulls over what to do next" about how the federal Clean Air Act is to be used to control carbon dioxide, said David Bookbinder, a Sierra Club lawyer. "And that will be decided by the next administration."

Bookbinder led the group's efforts to block the attempt by Deseret Power, a group of six electric cooperatives, to build a second coal-burning generating unit at the Bonanza facility on the Uintah and Ouray Indian reservation in Utah.

Deseret Power, had no comment about the EPA developments.

"In essence this is a punt to the Obama administration. ... All permits in the pipeline are now stymied," said Jason Hutt, a lawyer who represents a number of utilities, merchant energy developers and refineries seeking permits. He said it also would affect permits for oil refinery expansion.

President George W. Bush has made clear that he believes the Clean Air Act should not be used in permitting new plants to control greenhouse gases. It is not clear how the Obama administration will address regulating carbon dioxide. The Supreme Court has told the EPA it must decide on whether carbon dioxide endangers public health and welfare, and if it does it must be regulated.

Michael Gerrard, a lawyer not involved in the Bonanza case and author of "Global Climate Change and the Law," said the decision "will embolden the lawsuits" challenging construction of new power plants based on their impact on climate.

"It means that the appeals board recognizes that carbon dioxide regulation of power plants is a very live and open issue. It does not ban them. It puts a cloud over them, by making it clear that this is a real issue," Gerrard said in an interview.

The Utah case has attracted wide interest because of its broader implications.

Among those filing legal papers with the EPA's appeals panel, arguing the permit should be upheld, were the American Petroleum Institute, U.S. Chamber of Commerce, the American Chemistry Council and the National Association of Manufacturers.

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