November 26th, 2008
Yes, the only good coal gasification plant is a dead coal gasification plant. Coal gasification just doesn’t make any sense, and even project proposers are figuring that out!
Here it is in the Chicago Tribune:
Congrats to John Blair and Valley Watch for exposing the realities of this project.
It was canceled after the developer failed to reach an agreement with utility companies for purchasing the substitute natural gas it would have produced.
Vectren Corp., which along with NIPSCO (Northern Indiana Public Service Co.), was negotiating to buy the substitute gas, said there is too much uncertainty over possible federal carbon regulations to commit to a 30-year purchase agreement now.
On Tuesday, Larry J. Wallace, attorney for the developer, read aloud a statement asking the commission to discontinue consideration of the proposal, at least for now. The developer hopes the project can be revived in a different form and resubmitted later, he said.
Two environmental groups, Citizens Action Coalition of Indiana and Valley Watch Inc., had intervened to oppose the developer’s plans. The groups contended the gasification project was a bad deal for ratepayers because it would have locked in 30-year contracts for substitute natural gas, even when the market price for natural gas might drop below that amount.
“We’ve never asked that the commission prevent them from coming back,” said Jerome Polk, attorney for Citizens Action Coalition and Valley Watch. “If (the developer) can come back with a workable proposal that makes sense, even my clients would be willing to sit down and talk if it makes sense and doesn’t hang ratepayers out to dry.”
The end of contract negotiations comes amid uncertainty over what the new Congress or the incoming administration of President-elect Barack Obama might require of coal plants, in terms of limiting their greenhouse gas emissions, such as carbon dioxide. The likelihood that coal plants might have to capture the carbon dioxide and inject it underground, at unknown costs, adds to the uncertainty.
“That could have an impact on the price of gas this (plant) could yield, especially if the plant would have to capture carbon. That could impact the capital costs,” said Chase Kelley, Vectren Corp. communications director.
Vectren never was going to be a “significant purchaser” of the substitute gas, she said. But the uncertainty of federal carbon legislation was too much of an obstacle to reaching agreement on a 30-year purchasing contract.
A spokesman for NIPSCO would not be as specific on what derailed negotiations with the developer. “We actively negotiated . . . however, a business decision has been made to discontinue those negotiations,” NIPSCO spokesman Nick Meier said, adding the utility had made no financial commitment to the project.
Two years ago, Gov. Mitch Daniels attended the Indiana Gasification announcement at Vectren headquarters in Evansville, and on Sept. 3 he specifically cited the plant as an example of clean-coal technology’s potential during an energy summit in Indianapolis.
“Obviously, I’m disappointed. We worked hard to get to this point,” said Stilwell, D-Boonville, whose House district includes the Rockport area. “I would call it a lost opportunity. A project of this opportunity only come around once every few decades.”
Indiana Gasification requested Tuesday that the Utility Regulatory Commission end its proceedings on the proposal, while leaving open the door to resubmitting the project later. Utility commission regulators have not ruled yet.