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By Samuel R. Avro on Nov 24, 2008 with no responses

Indiana Coal-to-Gas Project Bucks Industry Trend

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In the heart of southwestern Indiana’s coal country, Duke Energy Corp. crews are building what the company’s CEO calls the power plant of the future — a $2.35 billion complex where coal will be turned into a gas, stripped of pollutants, then burned to generate electricity.

The project, one of the “clean coal” technologies supported by President-elect Barack Obama, will become by far the nation’s largest coal-gasification plant when it goes online in 2012, generating enough power to light more than 200,000 homes.

But opponents suing to halt the 630-megawatt plant near Edwardsport, Ind., call it a colossal waste of money that will saddle the utility’s Indiana customers with years of rate increases and release tremendous amounts of carbon dioxide, a greenhouse gas tied to global warming.

“Once you do all the cost assessments, the fact is this is going to gouge ratepayers. The cost of this just continues to skyrocket,” said Bruce Nilles, a Madison, Wis.-based attorney for the Sierra Club, which is suing to stop the plant.

Indiana regulators approved the project a year ago even though utilities nationwide have pulled the plug on 65 coal power plants since early 2007 amid rising construction costs and expectations that Congress will limit greenhouse gas emissions.

The U.S. Department of Energy in January yanked funding for the FutureGen coal plant in Mattoon, Ill., after its price ballooned to $1.8 billion, nearly double the original cost. And in July, NRG Energy Inc.’s CEO canceled a coal-gasification plant in New York, declaring that it had become too costly and was “ahead of its time.”

As they await Congress’ action on greenhouse gas caps, many utilities and regulators have taken a cautious approach because those rules will dictate what type of plants they pursue.

“There’s a lot of people who are just in a kind of holding pattern waiting for whatever’s going to happen,” said American Coal Council spokesman Jason Hayes.

Coal provides half the nation’s power needs but accounts for 40 percent of its carbon dioxide emissions, as well pollutants such as mercury that can lower the intelligence of children whose mothers eat tainted fish during pregnancy.

Gov. Mitch Daniels says the Edwardsport plant’s ability to remove pollutants from coal will reinvigorate southwestern Indiana’s coal mining towns by opening a larger market for the region’s high-sulfur coal deposits.

He also says the plant will provide Indiana with some of the 3,000 new megawatts the state is projected to need by 2012 — even though it will mean higher utility bills.

“If we want cleaner air, it will cost something more,” Daniels said.

Article continues… Chicago Tribune