Rockport coal gasification plant dies

A controversial Southern Indiana coal gasification plant appears to be dead for good.

Last week, the Indiana Department of Environmental Management announced it had rescinded an air-quality permit for Leucadia National Corp.’s planned Rockport coal gasification plant at the firm’s request.

The company requested the permit be rescinded since it hadn’t yet begun construction as a key deadline loomed.

Company supporters consider the project’s death to be a loss to the state, while opponents say it would have driven up the cost of home heating in Indiana.

“These ratepayer benefits were gigantic reforms,” said Mark Lubbers, the project director on the plant. “And they were landmark achievements that now will die with the project.”

Kerwin Olson, executive director of Citizens Action Coalition, a consumer advocacy group opposed to the Rockport deal, put it differently: “This finally puts the stake in the heart of a zombie coal plant.”

Lubbers was a former adviser to Gov. Mitch Daniels whose administration first pushed for legislation and signed a deal with Indiana Gasification, a Leucadia subsidiary.

The plant, which would convert coal to synthetic natural gas, has been a lightning rod of controversy for a couple of reasons.

The largest concern was that it could drive up home heating bills.

Under a deal developers signed with the Daniels administration, the state would buy the gas at a set rate for 30 years. Plus, if the state couldn’t sell the gas for a profit, all Indiana ratepayers would have to make up the losses on their monthly natural gas bills.

Opponents, led by Evansville-based Vectren Corp., have said the deal would have cost ratepayers more than a $1 billion over the plant’s first eight years of operation.

Indiana Gasification disputed that estimate. The firm argued that the plant could create 1,500 jobs and provide another market to sell the state’s coal.

“Our project was based on the principle that you never want to have all your eggs in one basket, as natural gas customers do today,” Lubbers said. “At today's gas prices, consumers are doing great. Our plant would have come on line in 2019. My bet is that in 2020, people will wish this plant had been built.

Some were also concerned that Lubbers was representing a firm seeking public-financing guarantees soon after leaving the Daniels administration, which Lubbers also disputes.

“The appearance of a conflict only assured that the Daniels administration went above and beyond to extract concessions,” he told The Star in an email.

By 2013, the Indiana General Assembly overwhelmingly passed a law that signaled trouble for the plant.

The legislation, signed by Gov. Mike Pence, required utility regulators to conduct a more thorough review of the contract.

Should the company ever decide to restart its plans for the plant, it would need to begin the years-long permitting process all over again.

Call Star reporter Ryan Sabalow at (317) 444-6179. Follow him on Twitter: @RyanSabalow.