New energy plant to be built in Rockport, Ind.

Gov. Mitch Daniels’ plan for a substitute gas plant is projected to provide billions in savings for energy customers and provide more than 1,000 jobs for Hoosiers.

But some worry the plan, which would turn coal into a natural gas substitute, will end up costing Indiana residents more in the long run.

The General Assembly set Daniels’ bill in motion last week, entering the state into negotiations for 30-year contracts for the purchase and sale of substitute natural gas to Indiana customers. In the following weeks, the state will have an auction for the plant’s development contract open to private developers. The facility, to be located in Rockport, Ind., would turn coal into substitute natural gas.

In October 2006, Daniels proposed building a substitute natural gas plant in southern Indiana.

After some taxpayers voiced concern, the bill was modified to ensure no state dollars would be used to construct the plant.

When presented to the General Assembly, the bill received overwhelming support in both the Senate (48-0) and House of Representatives (90-8).

The plant would refine coal to produce substitute natural gas, which is essentially the same as the natural gas currently used to heat the homes of Indiana residents. Use of substitute natural gas from Indiana – as opposed to other states – is projected to save Hoosiers billions of dollars in the long run.

A single substitute natural gas plant could meet as much as 20 percent of Indiana’s residential gas consumption, according to statistics put out by Daniels’ office.
During the bill signing, Daniels said its approval would make Indiana a leader in the clean-coal era.

“I cannot thank enough the people who helped us take this important step,” Daniels said. “This has been a great bipartisan effort. It’s how we always make the best progress in Indiana.”

Substitute natural gas is produced with 99 percent fewer emissions than a traditional coal plant, according to statistics put out by Daniels’ office.

Daniels said coal is one of the most abundant resources in America and it would be foolish to not use it.

“We have more energy in coal in this country than there is oil in the entire world in terms of its energy output,” Daniels said. “The notion that we can somehow abandon
the use of coal is a prescription for poverty in this state, and it must be contested vigorously.”

But, those opposed to the bill claim that the 30-year contract could hurt Indiana’s economy in the long run because the market price of substitute natural gas could fluctuate and fall below the contract price.

Although taxpayers would not pay for the construction of the plant, using substitute natural gas could be more expensive than the natural gas that Indiana currently uses.

Opponents also say it’s not possible to differentiate between those who pay utilities and those who pay taxes.

The Citizens Action Coalition of Indiana’s program director Kerwin Olson said the separation Daniels makes between taxpayers and rate payers, who pay utilities, is not valid because everyone has to pay utility bills.

“He puts taxpayers on a pedestal and promises them protection while he throws rate payers to the wolves,” Olson said. “He acts as if people have two separate checkbooks, and it’s the same person.”

Olson said the 30-year lock-in on the bill will create more poverty for southern Indiana than what already exists.

“(Substitute natural gas) is down on the market,” Olson said. “The cost of gas from the (substitute natural gas) plant would be double for what it is on the market.”

The idea that substitute natural gas will help the Indiana economy is also a myth, Olson said.

“If coal were such a beacon of prosperity, why is southern Indiana so impoverished?” Olson said.

Ideally, the Citizens Action Coalition believes alternate sources of energy would be the alternative to both natural gas and substitute natural gas, Olson said.

“We don’t need to build an expensive coal plant that would turn it into (substitute natural gas),” Olson said. “We’re 90 percent reliant on coal, and to rely on it for natural
gas is ludicrous.”