Big Coal loses out in Indiana, despite employing two state lawmakers

Big Coal loses out in Indiana, despite employing two state lawmakers

Indiana state

Rep. Matt Ubelhor moonlights as a Peabody Energy employee. Or is it the other way around?

Tough break for the coal industry in Indiana. Plans to build a $2.8 billion plant in Rockport to convert coal into synthetic natural gas have been doomed by new safeguards that protect ratepayers.

That’s despite the best efforts of two senior coal industry executives who serve as lawmakers in the state legislature. There, they had tried, unethically and unsuccessfully, to prevent their colleagues from imposing the new standards, which will protect the state’s gas and electricity customers from being ripped off.

Former Indiana Gov. Mitch Daniels’ (R) administration signed a deal with the plant developers in 2011, which Indiana University researchers found would leave the state’s ratepayers on the hook for all of the financial risks associated with the project. The researchers concluded [PDF] that the project would hurt the state’s economy in the long run.

The deal was negotiated when natural gas prices were much higher than they are today, and when coal-to-gas technology was seen as being more lucrative. A court has ordered that the contract must be amended, and the newly approved state legislation will trigger a tough review before any amended deal can be signed.

We told you recently about the funny business going on in the state Capitol around all this. Senate Utility Committee Chairman Jim Merritt (R) is vice president for corporate affairs with the Indiana Rail Road Co., which makes most of its money hauling coal, and Rep. Matt Ubelhor (R) is an operations manager for Peabody Energy; both of their companies could get new business from the plant. The two lawmakers had pulled various procedural maneuvers to try to shield the project from new ratepayer safeguards.

But they failed, and Big Coal lost. From the Evansville Courier & Press:

Developers of the proposed $2.8 billion Rockport coal-to-gas plant will see their ongoing legal battle through to its end, but are suspending all other activity related to the project.

The decision comes just three days after state lawmakers approved a tough new regulatory measure that developers had warned would kill the state’s 30-year contract to buy and then resell the plant’s synthetic natural gas — and therefore the entire effort.

“The judgment of the state is very clear: Neither the legislature nor the governor support the contract or the project,” said Mark Lubbers, project manager for Indiana Gasification …

He said if the Indiana Supreme Court does not opt to weigh in on the battle between his company and a coalition of opponents led by Vectren Corp., “the project is dead.” If the five-member high court does take up the case, he said, developers could win there.

“If we win, however, only a clear reversal of position by the governor would enable the project to go forward,” Lubbers said.

Seems the industry needs to get a few more of its employees elected to the legislature. Two is simply not enough.

John Upton is a science aficionado and green news junkie who


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blogs about ecology

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Big Coal loses out in Indiana, despite employing two state lawmakers

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