$1.5 billion clean-coal plant proposed for Southwest Indiana - 14 News, WFIE, Evansville, Henderson, Owensboro

$1.5 billion clean-coal plant proposed for Southwest Indiana

By Maureen Hayden

Indiana Gov. Mitch Daniels was in Evansville today to announce plans for a $1.5 billion coal-gasification plant that would be the first in the country to make pipeline quality natural gas from coal mined east of the Mississippi River.

The plant would be located in Southwest Indiana. Several sites are now under consideration, but Daniels declined to discuss the location sites.

At press conference at Vectren Corp. headquarters, Daniels said the plant, which is scheduled to be online in 2011, would create 300 new jobs to mine Indiana coal and 125 permanent jobs at the plant site, as well as about 1,000 construction jobs for four years beginning in 2008. 

 "We said Indiana would become a leader in homegrown clean energy, but not even I thought we'd get there so fast," Daniels said.  Earlier this year, Daniels introduced his Hoosier Homegrown Energy strategy, which promotes the use of the state's natural resources. Southwest Indiana has millions of tons of coal reserves.

The plant's technology would transform high-sulfur Indiana coal into cleaner-burning natural gas. The process is considered a major technological breakthrough because Indiana has an abundance of relatively inexpensive coal at a time when natural gas prices have been rising dramatically. A Carnegie-Mellon University study projects the coal-gasification plant could reduce the utility bills of Indiana consumers by more than $3.7 billion over the next 30 years.

In an interview in the current issue of Evansville Business magazine, Vectren CEO Niel Ellerbrook predicted major advances in clean-coal technology would have a major impact on the comeback of Indiana coal.

Vectren is one of three Indiana utilities that have signed a letter of intent to enter into a 30-year supply agreement with Indiana Gasification LLC, developers of the coal-gasification plant. The utilities and Vectren are expected to file a joint petition with the Indiana Utility Regulatory Commission today to seek approval of those supply contracts. Indiana Gasification is also expected to file an application with the U.S. Department of Energy for a $1.2 billion loan guarantee.