Evansville Courier & Press
Will it define America's energy future or turn out to be an economic and environmental disaster? That's one way to frame the debate over a plan to build a $2 billion plant in Rockport, Ind. that would transform Illinois basin coal into synthetic natural gas.
To ground the debate in reality, Courier & Press multimedia journalists Bob Gwaltney and Mark Wilson traveled to North Dakota to visit the only commercial-scale plant in the United States that uses gasification to convert coal into syngas.
What they found was an operation that, from a community economic standpoint, literally saved the town of Beulah. N.D. As far as the environment, the Great Plains Synfuels Plant pollutes far less than a nearby coal-fired electric generating plant.
The broader economic and environmental issues are less clear. State lawmakers, led by state Rep. Russ Stillwell, D-Boonville and backed by the enthusiastic support of Republican Gov. Mitch Daniels, acted quickly last year to do what a consortium of Indiana utilities would not: Cut a deal to buy syngas from the Rockport plant.
That decision was made in the teeth of a recession that's leaving government leaders at all levels grasping for viable job-creation ideas and amid fears that cap-and-trade legislation then under consideration in Washington would send consumer energy prices soaring.
"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," said William Rosenberg, a developer and former U.S. Environmental Protection Agency official who leads Indiana Gasification, which seeks to build the Rockport plant..
Cut to this year: Cap-and-trade is on the back burner, for now, and the market for natural gas is much different, too. New methods for securing domestic natural gas -- freeing gas from underground shale formations, for example -- has opened up new supplies, driving down the price of natural gas below the predicted price of producing synthetic gas in Rockport. Even major backers such as Stillwell now say the reduced price of natural gas gives him pause.
That brings us to the Great Plains Synfuels plant, which opened in 1984 but traces its roots back to the energy crisis of the 1970s.
After it opened, falling gas prices and a lack of government price supports for the syngas produced at the plant led the consortium of utilities that built the plant to relinquish it to the federal government. That's precisely the outcome some opponents of the Rockport plant are predicting.
In 1988, an electric utility bought the $2.2 billion plant for $85 million and entered into a revenue-sharing arrangement with the federal government. Since then, the plant has repaid $1.3 billion.
The North Dakota plant makes a good chunk of its money by reselling byproducts of the gasification process: anhydrous ammonia, liquid nitrogen, ammonium sulfate and, yes, carbon dioxide.
There is still time to address the economic issues and potentially get a better deal for Hoosier consumers. The Legislature gave the Indiana Finance Authority responsibility to negotiate a contract with Indiana Gasification; the authority would buy the gas produced by the Rockport plant and resell it to utilities. Any deal reached would also have to be approved by the Indiana Utility Regulatory Commission.
Creating jobs and coming up with better ways to use our existing natural resources are worthy goals, but government backers can't give away the store.
Whether or not you believe in climate change, it is clear that coal is in the crosshairs of those who believe its use is harmful to the environment and to our health. Though we believe that "clean coal" is a marketing-driven oxymoron, we also believe those who think we should stop burning coal overnight are unrealistic at best.
That's why exploration of the Rockport coal gasification plant should continue - and why Indiana would do well to heed the lessons learned on the Great Plains.