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A Major, Major Setback For Coal

Wow, stunning news yesterday: The EPA's appeals board sided (pdf) with the Sierra Club and blocked the EPA from issuing a permit for a new coal-fired power plant in Utah. Kate Sheppard has a round-up, but it's hard to overstate the impact of this story. Basically, the board ruled that the EPA's regional office in Denver needed to reconsider its decision not to require any controls on carbon-dioxide emissions. Environmentalists are, not surprisingly, hailing the decision as a huge step toward limiting greenhouse gases from coal plants.

So what, exactly, does the ruling mean? Well, it doesn't mean that we'll never see a dirty coal-fired plant again. But, for now, as Jesse Jenkins notes, it does kill the 30 or so pending permits for coal plants under direct EPA supervision (on Native American reservations, for instance), and it will probably hold up the construction of any new coal plant for at least a year, while permitting processes get redefined and people figure out what the heck "Best Available Control Technology" for CO2 emissions really entails. That will be decided by the Obama administration and they could be pretty strict about this—requiring carbon sequestration for all new plants, say. As Akin Gump's Paul Gutermann points out, though, they'll have to hash this out fairly rapidly.

Needless to say, coal suddenly looks like a much shakier investment, and this is Exhibit A for why a growing number of people in the energy industry are clamoring for Congress to pass clear rules on greenhouse-gas emissions, rather than letting the courts hash this out in piecemeal fashion. And, while some lobbyists are relieved that this decision won't require the EPA to regulate CO2 emissions under the Clean Air Act, the Obama administration could still take up the authority granted it by the Supreme Court and start doing just that. In any case, I still hear people say that there's no way we'll see major climate legislation from Congress next year, but I'm skeptical—"doing nothing" no longer looks like a viable option, especially for the coal industry.

--Bradford Plumer