Coal gasification project ended for now

November 26, 2008

Plans to build a $1.5 billion plant in southwestern Indiana to turn coal into natural gas have been put on ice.

The developer, Indiana Gasification LLC, yesterday pulled its application to the Indiana Utility Regulatory Commission, according to The Times of Munster and the Evansville Courier & Press.

The project, which was to be built in Spencer County, took a hit earlier this year when Citizens Energy Group in Indianapolis said it wouldn't buy the gas.

Then yesterday, Evansville-based utility Vectren Corp. said uncertainty over potential federal carbon restrictions presented too much risk to commit to a 30-year contract to buy the gas.

The third utility considering a contract was Northern Indiana Public Service Co., which is owned by Merrillville-based NiSource Inc. NIPSCO had made no financial commitment to the project.

Another gasification project continues to move ahead. Duke Energy Corp.'s plant at Edwardsport, also in southwestern Indiana, is projected to cost $2.4 billion and generate 630 megawatts of electricity.

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