Coalitions geared to block U.S. coal development

By Eileen O'Grady

HOUSTON, Jan 15 (Reuters) - Environmentally-minded coalitions are working overtime to block construction of all new coal-fired power plants in the United States after a "watershed" year in 2007 when plans for dozens of coal units were delayed or scrapped, said one environmentalist.

After years of limited success against power-plant construction, concerned groups were buoyed last year by action in California and Florida to restrict imports of power produced from coal. Coal generators release about 40 percent of U.S. emissions of carbon dioxide, a gas blamed for global warming.

Even more supportive was a Kansas ruling that denied permits to build new coal units by Sunflower Electric.

"Kansas was a major, major victory," said Bruce Nilles, director of the Sierra Club's national effort to block coal plants. "In 2008, we will really begin to act on stopping the majority of these coal plants."

State regulators in Montana Friday rejected a request from environmentalists to require a cooperative to install the same controls on CO2 - which is not regulated in the U.S. - as it plans to use on regulated pollutants at a new coal plant, but the fight is far from over, said Abigail Dillen, an attorney with Earthjustice.

Dillen said the group will appeal a decision by the Montana Board of Environmental Review in favor of the 250-megawatt Highwood plant proposed by Southern Montana Electric. Highwood is also being challenged in federal court over its long-term funding source, the U.S. Rural Utilities Service, Dillen said.

In Georgia, an environmental group said it would appeal last week's ruling to uphold issuance of an air permit for Dynegy's (DYN.N) 1,200-MW Longleaf coal plant.

While opponents said developers did not thoroughly evaluate the plant's impact on air quality, Dynegy spokesman David Byford said its joint venture with LS Power builds generation based on the needs of utilities that will buy the power.