Leucadia to quit Rockport coal project 

click to enlarge Rockport-IG_ProposedSite - JOHNBLAIR, VALLEYWATCH.NET
  • Rockport-IG_ProposedSite
  • JohnBlair, ValleyWatch.net

By Tim Grimes

Developers that financed a project that would turn coal into synthetic natural gas say they're closing up shop.

Indiana Gasification LLC, financed by Leucadia National Corp., is embroiled in a court case over the validity of the 30-year contract it signed to sell its gas to the state from a plant in Rockport. The General Assembly is ordering state regulators to take a second look at the contract, but only if the Indiana Supreme Court either doesn't take the case or rules that the contract isn't valid.

Leucadia spokesman Mike Murphy said that even if the company wins the court case, it would take an attitude adjustment from lawmakers and Gov. Mike Pence for them to resume building the plant.

"We have been disappointed by the state's breaking its commitment to the plant and the project," Murphy said. "They have changed the rules in the middle of the game."

The Indiana Supreme Court would need to rule the contract valid in its entirety, which could present a problem because the Indiana Court of Appeals struck 37 words from the original contract last year. House Speaker Brian Bosma, R-Indianapolis, didn't say if the legislature intended for the contract to contain the 37 words or not.

"Every word, every jot and every title of the whole thing have been litigated the whole way, so I don't want to impact that or give my personal opinion," he said.

Bosma, Gov. Mike Pence and other lawmakers said fluctuations in the natural gas market justify their desire for another review at the contract. They want savings for customers to be evaluated throughout, rather than at the end, of the contract.

"I see merit to this, but with the volatility we've seen in the natural gas market, the prices that exist today, it's in my judgment that, in the interest of Hoosiers, in the interest of ratepayers, to take a fair second look," Pence said.

But Murphy said state regulators could have gotten their "second look" in the form of a non-binding review of the plant that appeared in an earlier version of the bill. That provision was shot down, however.

"That alternative was rejected in favor of adopting new standards that the legislature and the governor knew would kill the project because it would require a different contract and two years of review that the project cannot sustain," Murphy said. "The decision to take this path was a conscious decision to kill the project."

Murphy said Indiana Gasification will see the court case through to the end, but will stop all other operations relating to the plant.

Tim Grimes is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.

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