Indiana Gasification gets another year on its air permit

Indiana Gasification LLC, developer of a long-delayed and much-fought-over coal gasification project in southern Indiana, has won a 12-month extension of the construction start deadline under an air permit.

The Indiana Department of Environmental Management (IDEM) granted the extension on June 26. IDEM issued a PSD New Source Construction/Part 70 Operating Permit to Indiana Gasification in June 2012 for its project. That approval provided a period of 18 months in which IG may begin construction.

Indiana Gasification, after a favorable ruling on its project by the Indiana Supreme Court, in December 2013 requested an Administrative Amendment to provide an extension of the deadline to June 27 of this year. That request was approved.

Since IG has not commenced construction and is not expected to commence construction prior to June 27, it on June 20 requested that the period allowed for the commencement of construction be extended to June 27, 2015, which would constitute an 18-month extension beyond the original 18-month period for IG to begin construction. That extension was granted on June 26.

The project would produce up to 48 billion standard cubic feet (Bscf) of synthetic natural gas (SNG) annually utilizing approximately 3.5 million tons of feedstock, which would be mostly coal and maybe some petroleum coke. About 39 Bscf will be sold to the Indiana Finance Authority (IFA) for use by Indiana natural gas consumers. Natural gas utilities in the state have been battling that mandate, saying this gas could be way more expensive over time than the regular natural gas available on the market.

Heat generated during the gasification process would be used to produce steam for steam turbines that could produce about 300 MW to meet on-site power needs, with a utility interconnection for minor power balancing.

An attachment to the June 26 IDEM extension, written by the company, says a major factor in the current project delay is a 2013 change by the Indiana General Assembly to supporting legislation, which impacts the Indiana Utility Regulatory Commission (IURC) approval of the project.

“This delay is clearly resolvable in one of several ways,” said the attachment. “For example, we are aware that the IFA is presently evaluating the economic effects of the 3+ years since the Contract was entered into by the two parties and presented for approval to the IURC. This is sensible, although time-consuming, work that we expect will show that the Contract is even more valuable today than it was in December 2010. The IFA may choose to go forward with submitting this information to the IURC if it proceeds under the New SNG Legislation. Alternatively, the confusion over the application of the New SNG Legislation to the Contract even after the Supreme Court Opinion siding with IG/IFA may be resolved in the 2015 Session of the General Assembly by the elimination of the provisions in the law that act as an impediment to moving forward.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.