By Eric Bradner, Evansville Courier & Press
INDIANAPOLIS - Opponents warn that climate change legislation under consideration in Congress could cripple Southwestern Indiana's coal industry and send energy bills soaring.
But they say a proposed coal-to-gas plant is evidence that on its own, the state can begin to reduce its carbon footprint without pummeling Hoosier ratepayers in the process.
With the U.S. Department of Energy set to provide low-interest loans to finance the first generation of coal-gasification projects, developers who want to build such a plant near Rockport, Ind., expect to learn within two months whether they'll qualify for a loan.
Backers say the $2.2 billion plant Indiana Gasification LLC wants to build can be a boon to the region's economy and a road map toward future energy use that protects the environment without abandoning coal, one of the state's most abundant resources.
Gov. Mitch Daniels says Indiana is out to be a leader in making clean coal and developing technology to capture and sequester carbon dioxide.
"We eagerly accept the responsibility to develop alternatives to the punitive, inequitable taxation of cap and trade," he said last week in an article written for The Wall Street Journal's opinion page.
His energy policy director, David Pippen, says the proposed Rockport plant has "tremendous potential to provide a clean energy source to Hoosiers."
Eighth District Congressman Brad Ellsworth, D - Evansville, also signaled his support for efforts such as the coal-to-gas plant.
He said when considering legislation to combat global warming, Congress "must be mindful of its potential adverse effects on consumers and businesses that could undermine our economic recovery."
William Rosenberg, a developer who leads Indiana Gasification, says clean coal is cheaper and more stable than natural gas, making it a better option even if cap-and-trade legislation does pass.
"If there's going to be a carbon dioxide constraint in the production of electricity, then it's going to drive up the price of natural gas and drive down the price of coal," he said.
That, he says, perfectly positions a plant that turns coal into pipeline-quality gas to provide energy without increasing prices.
"These technologies are really the technologies of the future," he said.
"It will be less expensive to use coal and these technologies (than other alternatives)."
Environmental groups, though, oppose the plant saying it would harm environment and further burden a region that already has a number of coal-fired power plants.
But before Indiana Gasification can begin work on the Rockport plant it must clear several hurdles. Among them:
Developers need to finalize a contract with the Indiana Finance Authority, which would resell the gas to Indiana utilities. The General Assembly passed legislation to have the finance authority act as a go-between earlier this year.
The plant must gain about $2 billion in federal loan guarantees from the U.S. Department of Energy. The guaranteed financing and low interest rates would make building the plant possible.
Developers then must seek environmental permits covering land, water and air pollution.
Rosenberg said Indiana Gasification also is negotiating with a Gulf Coast company to build a pipeline to transport the sequestered carbon dioxide for use in oil fields.
Earlier this year he predicted negotiations would take place on all fronts this spring.
Rosenberg says everything remains on track, and he expects a clear picture of the plant's future to become evident by July.
"Things are going well, but nothing is definite," he said.
He said Indiana Gasification is in "active negotiations" with the Indiana Finance Authority, and that they have had "serious discussions with the federal government" regarding the loan guarantees.