* EPA proposes rules to cut coal plant mercury emissions
* Some old coal plants may shut, boosting nuclear, natgas
* EPA says rules to provide 9,000 long-term jobs (Adds comment from FERC Chairman Wellinghoff)
By Timothy Gardner
WASHINGTON, March 16 (Reuters) - U.S. environmental regulators proposed rules on Wednesday that would force aging coal-fired power plants to choose between installing anti-pollution technology or shutting, which could ensure reliance on nuclear power and natural gas.
The Environmental Protection Agency said the proposed rules, once fully implemented, will prevent 91 percent of mercury in coal from being released into the air. Power plants would have four years to meet the standards.
The EPA will take public comment for 60 days on the rules, which would require many coal-fired power plants to install scrubbers and other technologies to reduce emissions of arsenic, chromium, nickel and acid gases in addition to mercury, which can damage nervous systems in babies.
"Generally anything that makes coal plants more expensive is a benefit to alternative forms of generation whether they be natural gas, nuclear, or hydropower," said Paul Patterson, an analyst at Glenrock and Associates LLC in New York.
What the final rules will look like after public comment is uncertain, he added.
Jon Wellinghoff, the chairman of the Federal Energy Regulatory Commission, told Reuters the EPA rule could help shift power companies to cleaner sources of energy such as natural gas and wind power and also increase efficiency.
The FERC issued an order Tuesday aimed at allowing companies that reduce energy use to get better compensation, which could increase efficiency on the grid and reduce pollution, he said.
Coal-fired plants generate nearly 50 percent of U.S. electricity while nuclear and natural gas generate about 20 percent each.
Issuance of the rules, 20 years in the making, came in response to a court deadline.
"With the help of existing technologies we will be able to take reasonable steps that will provide dramatic protections to our children and loved ones, preventing premature deaths, heart attacks and asthma attacks," said Lisa Jackson, the EPA administrator.
She said the rules could prevent as many as 17,000 premature deaths and 11,000 heart attacks each year.
Japan's battle to stop earthquake-damaged nuclear reactors from melting down has pushed some countries to be cautious on atomic energy. Germany, which has taken the strongest stance after the disaster, plans to shut seven of its older nuclear plants, or a quarter of its atomic energy, for a three-month safety review.
The United States has said it remains committed to nuclear but will conduct checks. U.S. Energy Secretary Steven Chu said on Wednesday that federal regulators will look to boost the safety of the nation's nuclear plants after the Japan crisis.
Analysts at Bernstein Research and other institutions have said the EPA crackdown could help force some 15 to 20 percent of U.S. coal-fired plants into early retirement by 2015 as the costs of installing the technology would be a burden on aging plants.
That could increase reliance on natural-gas-fired power plants, which can be built quickly and pollute less than traditional coal-fired power plants.
It could also ensure that the country continues to derive about 20 percent of its power from nuclear plants, despite the Japanese crisis, because they emit virtually no gases.
Republicans in Congress have tried to slow the EPA from acting on toxic pollutants and on greenhouse gases, saying that the rules would hurt the economy.
Jackson said the rules will provide 31,000 short-term construction jobs and 9,000 long-term utility jobs.
Reporting by Timothy Gardner; Editing by David Gregorio