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Future Of Rockport Coal Gasification Plant In Limbo

The Senate Utilities Committee heard testimony Thursday about a controversial proposed coal gasification plant in Rockport Indiana.

A long-planned coal gasification project in southern Indiana might soon be dead. The Rockport coal gasification plant is facing a major hurdle in the Indiana Senate.

The Rockport plant would take coal and process it into various substances, including synthetic natural gas, which burns as a fuel just like traditional natural gas. When the plant was originally endorsed by state officials, including then-Governor Mitch Daniels, natural gas prices were more than twice today’s levels.

But with the practice of fracking driving down natural gas costs, some legislators worry the plant might spend more money synthesizing gas than it can sell the fuel for.

Senator Doug Eckerty (R-Yorktown) has introduced a bill that would force the plant’s owners to guarantee a savings to Indiana gas customers every three years. He says new natural gas discoveries reduce the need, and thus the profitability, of a new coal gasification plant.

“Since they’ve developed a way to get the shale gas relatively cheaply, people are looking for it, and they are finding it,” he says.

Plant executives, however, say if the bill passes their investors will pull out and the project will die.

Don Maley is a vice president with New York-based Leucadia, which owns the Rockport project. He defended the project Thursday against critics who worry the plant will lose money, burdening Hoosier ratepayers.

“The only way we make a return is if market gas prices are substantially above our contract price, and we’d get to share in 50-percent of that. We wouldn’t make this investment if we didn’t believe in a long term basis, that this was going to accrue,” he says.

The Senate Utilities Committee will vote on the bill next week. Meanwhile, the state appellate court has put a stop to the state’s contract with Leucadia, for now.

Depending how the Senate votes, the case could be headed to the Indiana Supreme Court.

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