EVANSVILLE — A judge has ruled against opponents hoping to stop the air pollution permit for a proposed plant for converting coal to diesel fuel in Southwestern Indiana.

Riverview Energy, a privately owned company, is seeking to establish the facility in Dale, Indiana, a town of about 1,500 people in Spencer County.

The project has already received air pollution and construction permits from the Indiana Department of Environmental Management.

Stephanie McFarland, a spokeswoman for Riverview Energy, said Friday that Riverview plans to break ground some time before the fourth quarter of 2021. It has already received one extension of its construction permit from IDEM.

Riverview's facility, if built, would produce an estimated 4.8 million barrels of ultra-low sulfur diesel fuel and 2.5 million barrels of naphtha -- used in making plastics, solvents and gasoline -- with a process called direct coal hydrogenation.

However, it has met with resistance from residents concerned about its impact on the community and from environmental organizations, including Evansville-based Valley Watch and Earthjustice, a nonprofit environmental law group.

The state's Office of Environmental Adjudication issued the 41-page decision late Thursday. Environmental Law Judge Catherine Gibbs ruled in favor of IDEM, saying opponents didn't show that the agency lacked the information to issue the permit and set enforceable pollution limits.

"We are pleased with the court’s decision, of course, and had full confidence in the regulatory diligence that the Indiana Department of Environmental Management applied in vetting and issuing our air permit," said Gregory Merle, Riverview Energy's president.

In press statement about the ruling, Merle said the company's next step is to move forward with development.

While the company applauded the ruling as a victory, its opponents viewed it as a temporary setback, expressing skepticism in the project.

"The decision was not totally unexpected, and we are confident that this project will never be built. We think the real question is whether the sponsor has the necessary resources to move forward," said Mary Hess, a Dale resident and member of Southwestern Indiana Citizens for Quality of Life.

John Blair, president of Valley Watch, said he, too, was not surprised by the ruling.

"Has any challenge of any permit issued by the Indiana Department of Environmental Management ever been overturned by OEA? I don't think so. Nobody seems to care in an official capacity. The politics of Indiana make it difficult," he said.

Blair also was skeptical that Riverview would prevail with its project, citing the coal industry's declining fortunes.

Earthjustice attorney Charles McPhedran said Friday that the groups were considering their next steps. One possibility would be to appeal the OEA's decision to the state's civil courts.

Opponents previously lost a similar challenge to the EPA of Riverview's air pollution permit, which is federally enforceable, and which was not appealed by the groups.

Still pending with the OEA, is a separate challenge to IDEM's extension of Riverview's construction permit, which opponents filed in October, McPhedran said.

The project is touted on Riverview's website as a $2.5 billion investment that will create an estimated 225 jobs.
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