Indiana approves controversial gasification deal

December 12, 2011

Indiana regulators recently gave the green light to a 30-year contract for a huge Southern Indiana coal gasification plant.

Under the contract, the privately owned plant would sell the gas it produced to the Indiana Finance Authority, an agency of state government, which would in turn resell the gas into the nationwide natural gas market. If the gas sells at a profit, about 1.5 million Indiana customers would see reductions in their gas bills -- but if it sells at a loss, the state would pass the extra cost along.

Plans for the Rockport plant, which is a project of New York’s Leucadia Corporation, have created controversy among environmental activists, who object to additional coal mining. Consumer activists have spoken out against the contract, believing that it will lead to higher rates for consumers if coal prices increase and natural gas prices drop. Indiana Governor Mitch Daniels supports the plant and the 200 jobs it is expected to create by its 2015 completion.