Leucadia is an out-of-state, multi-national, speculative venture corporation, headquartered in New York City (with offices in Utah and California). They want to build a coal-to-gas plant in Spencer County, just outside of Rockport, IN. They originally wanted to turn coal into synthetic or substitute natural gas (SNG), and force Indiana natural gas utility customers to foot the bill. They also want to make some electricity with this plant to sell on the wholesale market to other utilities. The project is called Indiana Gasification LLC.
Wall Street prefers not to finance more coal plants, opting instead to finance renewable sources of energy and energy efficiency. So, this multi-billion dollar boondoggle in the making would not be feasible without ratepayers and taxpayers footing the bill.
In 2007, Leucadia first duped the state legislature and Governor Daniels into passing a bill approving the plant by spinning this as “Indiana Home-Grown Energy.” The Indiana legislature passed this bill, which, if the contracts are signed, forces ratepayers to keep paying for this ill-conceived project for 30 years without any way out. The legislation promised that the plant would be built in Indiana and use only Indiana coal, supposedly providing jobs and an economic boost to Indiana.
Then, in 2008, Leucadia came up with another piece of legislation that reneged on the promises that the plant would be built in Indiana and use Indiana coal. The legislation passed, so as it stands now, this plant could be build outside of Indiana, does not have to use Indiana coal, and yet if the contracts are signed, Indiana taxpayers and ratepayers could still be saddled with the costs of paying for the plant, even if it never produces any natural gas. Despite strident opposition from CAC, the legislature and the Governor eagerly bought into the numbingly one-sided, get-rich-quick power plant construction scheme.
Most recently, in 2009, the Indiana legislature passed another bill because ALL of the Indiana natural gas utilities refused to sign contracts with Leucadia to purchase the synthetic natural gas that this plant would produce. So now Indiana law allows the State of Indiana to sign the contracts, forces the Indiana natural gas utilities to deliver the gas, and forces Indiana natural gas customers to foot the bill for the plant.
In 2010 and 2011, Leucadia, along with a new player, Denbury, pushed a bill to give them eminent domain to take property for the purpose of building carbon dioxide pipelines. (Public utilities already have eminent domain for the purpose of building transmission and distribution lines, gas distribution pipelines, etc. But this bill gives eminent domain to private corporations, which is an entirely different story. This is a very slippery slope. Once private corporations can our property, where does it end?) Eminent domain was passed in the 2011 Legislative Session. Denbury is another out-of-state corporation, intent upon building pipelines from Illinois through Mississippi to connect with existing pipelines running from Mississippi to Texas. The idea is that Denbury would purchase Leucadia’s waste carbon dioxide, and that all that money would supposedly offset the cost of the SNG coming from the plant. This is the only way Leucadia can make a profit with this plant. Leucadia has said that if they can’t sell the waste CO2, they will not be able to make a profit and they will not go forward with this project.
Denbury wants to take carbon dioxide from coal gasification plants being proposed in the Midwest that would supposedly capture it (including Indiana Gasification). They want to use the CO2 for Enhanced Oil Recovery (EOR). EOR is where they pump the CO2 into old oil wells that have gone dry. The carbon dioxide mixes with the remaining oil. It thins it out and pressurizes it to help siphon the rest of the well dry. It also infuses the oil with even more carbon dioxide, which means the oil is going to release even more carbon dioxide when it is burned.
During contract negotiations between Leucadia and the State in 2010, it was learned that gas ratepayers may never actually receive the SNG being produced by this plant. Instead, Gov. Daniels came up with a scheme to force ratepayers to pay for an unregulated “exotic derivative” or financial contract which shifts all of the business risk onto captive ratepayers. In December of 2010, The Indiana Finance Authority (IFA - the state’s bonding agency) signed a 30-year contract to force ratepayers to purchase this “derivative” and is currently seeking approval of the contract before the Indiana Utility Regulatory Commission.
There are still many hoops for Leucadia to jump through before they can begin this project. This coal-to-gas plant has yet to be engineered, is in the process of seeking approval through the Indiana Utility Regulatory Commission, and still has to seek air permits through the Indiana Department of Environmental Management. Indiana Gasification, LLC cannot get funding from Wall Street to build the plant unless they can prove that they have taxpayers and ratepayers on the hook for the costs involved. In other words, they need the signed contracts from the State of Indiana, and federal loan guarantees (meaning that if they default on their loans, the Federal Government will pay off the loans) before their funding will be approved.
Indiana Gasification is bad for Spencer County!
Spencer County citizens already have to cope with the fact that the industries there emit more toxic pollutants into the air and water than are emitted in the cities of Los Angeles, Chicago, and New York, combined. Residents have been making the connection between rising illnesses and the rising level of pollution. To add to this pollution is a bad choice for public health, the environment, and economic development in Spencer County.
Indiana Gasification is bad for all Hoosiers!
These are the issues of immediate importance we are working on right now.