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

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Indiana lawmakers, who are also coal company execs, help coal industry

Indiana lawmakers, who are also coal company execs, help coal industry

Oleg Golovnev

Nothing to see here, folks.

Corporations have not figured out how to get themselves elected to public office, but Peabody Energy and Indiana Rail Road Co. have the next best thing going in Indiana: Both companies have senior employees in the state legislature, and both of those lawmakers have been amending legislation in ways that would enrich their employers at the expense of state residents, public health, and the environment.

From The Indianapolis Star:

A proposed coal-gas plant in Rockport could have a big impact on the pocketbooks of Indiana residents, but legislation that would introduce new ratepayer protections has twice been watered down at the hands of lawmakers whose employers could benefit from the project.

The lawmakers, Sen. Jim Merritt and Rep. Matt Ubelhor, both have strong ties to the coal industry, which wants to see the project move forward because it would open up a new market for their product. Demand for coal has been waning as aging coal-burning electric plants are shuttered and replaced with cleaner forms of energy production.

Merritt, who is chairman of the Senate Utility Committee, also is vice president for corporate affairs with the Indiana Rail Road Co. Most of the railroad’s business comes from hauling coal, and its largest clients include utility and coal mining companies. Ubelhor is an operations manager for Peabody Energy, the largest coal mining company in Indiana. Both companies could gain new business from the Rockport plant.

The two lawmakers don’t see any conflicts of interest here. From the Evansville Courier & Press:

“I’m a coal miner and proud of what I do,” [Ubelhor] said, adding that he understands the criticism but wants to wait until lawmakers have addressed the Rockport project’s future before he answers more questions.

And as he pitched his amendment [to reduce regulatory review of the proposed $2.8 billion project and make it more likely to proceed], he was open about both his employment and his intentions.

“Are we going to sit here and look at all these plant closings?” he asked, criticizing U.S. Environmental Protection Agency regulations.

“This adds about 3.8 million tons of coal production to our coal,” he said. “This will put the industry back on footing to compete with the markets that are out today, and that’s all we’re asking for as miners — if we can compete and be part of the next century.”

Again from the Star:

Merritt … also pointed out that the Indiana Rail Road Co. doesn’t have access to Rockport.

But the rail company did recently invest $17.5 million on a spur to Bear Run Mine in Sullivan County. That mine is the largest east of the Mississippi River and is owned by Peabody Energy, which, as Indiana’s largest coal company, would likely compete to supply coal to the new plant in Rockport. Merritt’s company is the sole carrier providing service to Bear Run.

“I put all that aside when I chair the utility committee,” Merritt said.

Sure you do, Merritt.

The fate of legislation related to the plant is up in the air. Consumer advocates, environmentalists, and other opponents of this boondoggle-in-the-making intend to keep on fighting.

John Upton is a science aficionado and green news junkie who

tweets

, posts articles to

Facebook

, and

blogs about ecology

. He welcomes reader questions, tips, and incoherent rants:

johnupton@gmail.com

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Indiana lawmakers, who are also coal company execs, help coal industry

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