Failed talks stall coal-gasification project

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By The Staff

ROCKPORT – The coal gasification project hoping to locate in Spencer County has been stalled and the hold on the project might be temporary, according to local economic-development officials and others involved with the project.

The hold-up came about because of failed negotiations between Indiana Gasification — the company proposing the project — and the utilities that would have been its customers, Vectren and NIPSCO.

Chase Kelly, who works in public relations for Vectren Corp., said carbon was the most pressing issue. She added the proposed plant would have had the capacity to capture carbon emissions, but uncertainty over factors that could drive prices higher was a concern.

Kelly said that, although Vectren would have been a customer for the syngas plant, the negotiation breakdown initiated with NIPSCO, a much larger provider, covering the northern two-thirds of Indiana.

"When negotiations broke down with them, there was a domino effect," Kelly said. "We still feel it's a solid project, but it's bad timing, nationally, for carbon."

Kelly said Vectren fully supports using local coal to provide local jobs, and they would also like to add a supplier like the coal-gas plant to their portfolio. However, if local coal was used and the costs had gone up drastically, the customers would be hit with that cost increase.

Nick Meyer, a spokesperson for NIPSCO, would not commit to any particular reason negotiations with Indiana Gasification broke down. He confirmed the utility had been negotiating with them for two years and the breakdown was "due to a variety of reasons."

He said NIPSCO remains committed to exploring all alternatives for providing energy.

Tom Utter, executive director of Lincolnland Economic Development Corp., said the $2 million project withdrew its application with the Indiana Regulatory Commission to consider contracts with Vectren and NIPSCO, but if circumstances change, they can resubmit their request.

"I'd sure like to have the project," Utter said. "It looks like this route did not work. Utter said he does not want to give false hope to anyone.

"It's not up to me to say the project's dead," Utter said. "I'm certainly concerned about the project."

He said he hopes the project is revisited, for the sake of the economy and the future of the region.

Utter said he believes the economy was a factor in the latest development with the project.

Utilities companies are publicly traded, and stock value has taken a 50-percent cut, he explained. That takes away incentives to be innovative with stockholder money.

For the past several months, the project has been the subject of debate between those in favor of industry-related growth and a group called Spencer County Citizens for Quality of Life.

Members of the group are pleased with the most recent development with the plant and have hailed it as a "major victory."

However, that group, and other allies, including Valley Watch and the Citizens Action Coalition, are aware the project may be revisited in the future.