A proposed plant that would turn coal into diesel fuel in southwest Indiana has overcome a legal challenge to its air permit.

Activists filed a petition to appeal Riverview Energy’s permit saying that the Indiana Department of Environmental Management likely underestimated emissions from the plant. But the state Office of Environmental Adjudication disagreed and said the agency had enough information to make its decision.

The plant is expected to invest $2.5 billion in the state. In a press release, Riverview Energy’s president called the ruling a “victory for Spencer County, Indiana, and the region.”

Charley McPhedran is an attorney with Earthjustice representing the groups Valley Watch and Southwestern Indiana Citizens for Quality of Life. He said, when IDEM issued the permit, Riverview’s design plan for the proposed plant in Dale wasn’t far enough along.

“To know what actual pollution would come out of the smokestacks at this plant — and the design is not final enough to answer that question," McPhedran said.

McPhedran said IDEM also didn’t use the highest emissions scenario in its models to make sure the plant wouldn’t affect the public’s health.

John Blair is the president of Valley Watch. He said he feels the court made a mistake, but that he’s not surprised.

“As far as I know, they have always deferred to the agency — they've always given IDEM the benefit of the doubt and they've never overturned a permit," Blair said.

Among other things, residents against the proposed plant worry it will increase their risk of cancer and other health problems.

“Even this decision acknowledges the cancer risk from the project and that it exceeds the level of concern set by IDEM," said Mary Hess, president of Southwestern Indiana Citizens for Quality of Life.

IDEM has said that it can’t use that guideline to deny permits.

Still, environmentalists are unsure if the coal-to-diesel plant will get built. Hess said the company had plans to build it in Vermillion County years ago, but pulled out of the project.

The petitioners have until mid-January to decide if they’ll appeal.

Contact Rebecca at rthiele@iu.edu or follow her on Twitter at @beckythiele.

Indiana Environmental reporting is supported by the Environmental Resilience Institute, an Indiana University Grand Challenge project developing Indiana-specific projections and informed responses to problems of environmental change.