OPINION: $2.8 billion Rockport coal-to-gas plant will never be

If the House and Senate approved a bill that required the project’s advocates to jump through a host of new hoops, Rockport project manager Mark Lubbers repeatedly said, there would be no way it could go forward.

Still, even as the votes were cast and the bill approved, many lawmakers believed that Lubbers was crying wolf that he and other developers in the Indiana Gasification LLC project, including financier Leucadia National Corp., would find a new way to make it work.

I suspect they’re wrong. Barring some dramatic turn of events, the plant will never be built, as opponents of the plant intended when this year’s session started.

There are two key sections of the bill, and both impose standards on the Rockport project that were not in place when the deal was struck.

One would throw it into the kind of constant regulatory oversight that developers sought to avoid when they negotiated a 30-year contract with the Indiana Finance Authority to have the state buy and then resell their synthetic natural gas, with the gains or losses when that pre-negotiated price is compared to the open-market rate passed on to Hoosier gas customers.

The other section, which requires an in-depth new regulatory review of the project, doesn’t take effect if the Indiana Supreme Court delivers Leucadia a victory on every front.

That, though, seems unlikely, since the Indiana Court of Appeals already cited a 37-word provision that shouldn’t have been included and as a result, voided the Indiana Utility Regulatory Commission’s approval of the contract.

If the state’s high court decides not to take up the case, upholds the appeals court’s decision or orders any further changes, it triggers the new review.

That review would likely be a fatal blow for the plant’s developers for a number of reasons.

It would take more than a year to play out, which would make their bid for federal Department of Energy loan guarantees all but impossible.

And, it would require developers to guarantee that ratepayers save money at intervals during the 30-year contract a dramatic departure from the current deal, in which Hoosier gas customers are only required to save money by its conclusion.

In totality, Lubbers said those two sections kill the deal.

Opponents of the plant a wide-ranging roster led by Vectren Corp. and including the Indiana Manufacturers Association, the Indiana Chamber of Commerce, the Sierra Club, Citizens Action Coalition, Valley Watch, the AARP, the Indiana Farm Bureau and more heralded the bill’s passage.

“Hoosier natural gas customers are the winners,” said Mike Roeder, vice president of government affairs and corporate communications for Vectren.

“Legislative leaders and the governor’s office worked diligently during the past four months to determine the best way to protect customers. We now have a law that defines guaranteed savings and other factors to protect consumers.”

We probably haven’t heard the last of the Rockport project. Developers will likely pursue it through the Indiana Supreme Court, and perhaps even try to jump through some of the bill’s new regulatory hoops in hopes of eventually suing to get the $20 million they’ve invested in the project so far back from the state.