(Adds background on EPA veto)
By Lawrence Hurley
WASHINGTON, March 24 (Reuters) - The U.S. Supreme Court on Monday delivered a blow to Arch Coal Inc by declining to hear its challenge to an Obama administration decision to block an environmental permit for a coal mining project in West Virginia.
The U.S. Environmental Protection Agency said it would veto a permit issued for the Spruce No. 1 mining project in 2011, four years after the U.S. Army Corps of Engineers had given its approval. The permit, issued under the Clean Water Act, would allow Mingo Logan, an Arch subsidiary, to discharge waste material into nearby waterways.
The case will now return to the U.S. District Court in Washington, D.C., where Arch is due to argue that the administration failed to follow the correct legal process when it made the decision to veto the project.
The permit was approved when President George W. Bush, a Republican, was in office. The EPA veto was issued after President Barack Obama, a Democrat, became president in 2009. Conservatives have accused Obama of waging a "war on coal," a reference to the administration's efforts to reduce greenhouse gas emissions, including those from coal-burning power plants.
Arch sought the high court's review after the federal appeals court in Washington ruled in favor of the EPA in an April 2013 decision. Although the EPA has in the past challenged projects under consideration by the Army Corps, which has the job of issuing permits under the Clean Water Act, it was the first time the agency had ever blocked a project after a permit was approved.
The EPA veto prompted a considerable backlash from business groups, including the U.S. Chamber of Commerce and the National Mining Association. They and 27 states, including West Virginia, asked the high court to hear the case.
In March 2012, U.S. District Judge Amy Jackson, an Obama appointee, ruled against the administration, saying the EPA had exceeded its authority. The all-Republican three-judge appeals court panel ruled for the Obama administration, saying the Clean Water Act gives the EPA broad authority to review projects even after permits are issued.
The case is Mingo Logan v. EPA, U.S. Supreme Court, 13-599. (Reporting by Lawrence Hurley; Editing by Howard Goller and Meredith Mazzilli)