Indiana releases permit for $2.9B coal-gas plant

ROCKPORT, Ind. (AP) - A planned $2.9 billion southwestern Indiana plant that would convert coal into synthetic natural gas would be able to reuse its wastewater and much of its collected storm water, according to a proposed water permit.

Indiana Gasification LLC partner Bill Rosenberg told the Evansville Courier & Press (http://bit.ly/MrvhoL ) for a story published Wednesday that the plant's wastewater reuse approach will cut down on its overall water use and the potential for discharges.

Opponents of the plant planned for the Ohio River city of Rockport about 30 miles east of Evansville contend that it will worsen regional air pollution and prove costly to natural gas ratepayers.

According to permit documents posted online by the Indiana Department of Environmental Management, the plant will filter and reuse most of the wastewater coming from the gasification process and evaporate the rest, resulting in no wastewater discharges.

A public hearing on the permit is set for July 10 at a Rockport's South Spencer High School. The deadline for commenting on the permit is July 16.

Although no wastewater will re-enter the river, some other water from the plant, including stormwater and water not in contact with the gasification process from the cooling tower and a boiler, will go into the river.

The Indiana Finance Authority has signed a 30-year contract to buy the plant's gas at a fixed, long-term rate and resell it. The contract's prices will make up 17 percent of Indiana ratepayers' bills. Gov. Mitch Daniels promoted the deal as one that would lock in low rates for Indiana's natural gas users, increasing the use of Indiana coal and creating about 200 jobs.

Indiana Gasification, a subsidiary of New York-based investment firm Leucadia Corp., will build and operate the plant.

The water permit is one of the two major environmental permitting hurdles facing the plant. The project's air emissions permit is waiting final approval by the U.S. Environmental Protection Agency.

Developers are negotiating with the U.S. Department of Energy for approximately $2.5 billion in loan guarantees that would apply to the plant's construction as well as the $1 billion construction of a carbon dioxide pipeline.

Rosenberg said he hopes to have a commitment by the end of 2012. Construction could begin in 2013.

The draft permit shows that the site will include a large storage pond system for collecting and holding stormwater runoff.

Stormwater collected near the gasification part of the site will be stored below ground and reused in the gasification process. If remaining stormwater basins become too full and need to discharge, they will spill into other basins before eventually going into the river.

The proposed permit includes requirements for treatment and monitoring of the water used in its processes or discharged from the plant to make sure it meets the federal Clean Water Act and doesn't decrease area water quality.