Sept. 11 (Bloomberg) -- The Environmental Protection Agency said today that 79 permits to mine coal by removing mountain tops and discarding the debris in neighboring streams must be held for further review.

In a preliminary decision involving sites mainly in Kentucky and West Virginia, the EPA found unresolved water quality issues near the mining projects, the U.S. agency said today in a news release. Earlier this year the EPA said it would review all pending permits for mountaintop removal in the Appalachia region, citing concerns over water pollution and the health of nearby rivers, streams and aquifers.

The announcement comes as President Barack Obama takes steps to dismantle Bush-era environmental rules that have made it easier for mining companies to lop the tops off mineral-rich mountains to expose coal deposits. The technique accounts for about 6 percent of U.S. demand for coal, which provides electricity.

“The EPA did not oppose a single permit during the Bush administration and now the EPA is expressing their concerns about 79 permits issued by the Army Corps of Engineers,” Mary Anne Hitt, deputy director of the Sierra Club’s “beyond coal” campaign said in an interview. “This is a sea change in enforcement.”

Aquatic Ecosystem Concerns

The majority of permits flagged for further review failed to demonstrate how the mining operation would minimize impacts on the aquatic ecosystem, the EPA said. Efforts to mitigate the impact of filling streams with mining debris “may not be adequate to offset proposed impacts,” the EPA statement said.

The EPA within two weeks must issue a final decision on the pending permits. At that point, projects that meet the agency’s environmental criteria may move forward.

Today’s decision will damage economies in the region as they struggle to recover from the recession, according to the Washington-based National Mining Association, a trade group for mining companies.

“EPA’s announcement today to halt 79 coal mining permits continues the moratorium on Eastern coal mining that jeopardizes the livelihoods of tens of thousands of American workers and their communities,” Hal Quinn, president of the group, said in a statement.

The permits are for mountaintop removal projects in Kentucky, Ohio, Tennessee and West Virginia. Dynamiting or bull- dozing peaks is the least expensive method to extract coal and the most damaging to the surroundings, according to the Sierra Club, a San Francisco-based environmental advocate.

Among the projects still pending in the EPA list are ones in Kentucky with Consol Energy Inc., Apex Energy and CAM Mining.

Today’s EPA decision reflects the agency’s concerns over violations of the Clean Water Act, a 1972 law that’s the cornerstone of rules protecting surface water in the U.S.

“Now that the EPA has been freed up to actually do their job, they’re finding that these projects don’t comply with the Clean Water Act,” Hitt said.

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.

Last Updated: September 11, 2009 12:53 EDT