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Focus on Regulation

Indiana Approves First Major Air Permit Addressing GHGs for Coal to Natural Gas Plant

On May 7, 2012, the State of Indiana Department of Environmental Management (IDEM) approved the air permit for a major coal to natural gas plant proposed by Indiana Gasification, LLC (IG).  The IG permit is Indiana’s first major Prevention of Significant Deterioration (PSD) permit addressing emission control requirements for greenhouse gases (GHGs).  IDEM has submitted its approval to EPA for a 45-day review process that will end June 21, 2012.  A summary of the status of the permit is available on EPA Region 5’s website.  Upon submission of IDEM’s approval for EPA’s review, the environmental organization, the Clean Air Task Force, issued a press statement commending Indiana’s actions and the creative handling of GHG reductions from the plant’s operations.

As proposed, the IG plant would convert approximately 10,000 tons per day of coal into substitute natural gas (SNG) and liquefied carbon dioxide (CO2).  According to IG, about 80% of the plant’s SNG output would be sold to the Indiana Finance Authority under an agreement that would guarantee Indiana ratepayers savings of at least $100 million over 30 years. The 38 million mmBtu of SNG that would be sold represents about 17% of the gas used by Indiana gas consumers.

In addition, approximately 5.5 million tons of CO2 generated annually by the production process would be compressed, sold and shipped from Indiana to the Gulf Coast and injected into depleted oil wells for enhanced oil production. This enhanced oil recovery is expected to result in the production of 10 to 20 million barrels of additional domestic oil annually.