Clean Coal Project Makes Another Push for Chicago

By Matt Baker

For the second time this year, the Illinois General Assembly has approved legislation for a $3 billion energy facility. Chicago Clean Energy would be a gasification plant designed to produce substitute natural gas from coal and industrial byproducts. Chicago Clean Energy is an initiative of Leucadia National Corporation, the proponents of the first bill. The gas plant site at 115th and Burley Avenue on the city’s south side is a 140-acre brownfield, the former site of a coke manufacturing plant that went bankrupt in 2001.

Governor Pat Quinn vetoed a previous incarnation of the measure in March, citing the opposition of environmental and public advocacy groups as aids to his decision. “Our investments in clean coal must not come at the expense of consumers,” Quinn said.

The new bill, which awaits Quinn’s signature, now proportionally allocates the natural gas produced at the facility to Illinois’ gas utilities and includes a number of consumer protections, including a rate cap, a more robust reserve account to mitigate rate changes and a revised system to share savings and potential revenues with consumers.

Organizations such as the Citizens Utility Board argued that the first legislation, which would mandate the purchase of the plant’s cultured natural gas by utilities like Nicor and Peoples’ Gas, would raise the price of natural gas, with the costs passed on to the consumer. Environmental groups like the Sierra Club and National Resource Defense Council claim that coal gasification, one technology under the umbrella of “clean coal,” would produce more pollution than supporters contend.

But endorsers of the legislation point to the economic benefits and job creation expected should the brownfield be given new life. “This is a significant step not only for Chicago’s Southeast Side, but also for the whole state,” said Senator Donne E. Trotter (D-17th District), the bill’s Senate sponsor. “It’s the type of clean technology that will help revitalize our community, as well as help spur Illinois’ entire economy.”

The new bill addresses many of the consumer protection concerns faced by its predecessor. The developer will create a $150 million reserve account to offset rate hikes; repayment would be restricted unless and until consumers have experienced savings. A 2% annual rate hike cap was also built in.

It doesn’t appear, however, that the environmental concerns raised previously have been addressed. Chicago Clean Energy would utilize a process known as gasification—a technique of producing substitute natural gas from coal and petroleum coke. The process uses a chemical reaction to create the fuel without burning coal. In theory, 85% of carbon dioxide and other harmful emissions would be captured and sequestered. While the technology has been implemented in other countries, gasification is not yet widely found in the United States.

Clean coal complaints focus on the environmental impacts of coal mining. Carbon sequestration, which generally means deep earth burying, remains an expensive and unproven method of dealing with the captured carbon dioxide.

The U.S. Environmental Protection Agency (EPA) issued a fiat in 2005 to equalize the amount of pollution in Illinois. Essentially, before a new factory, power plant or other polluter can come online, an existing polluter must have reduced its emissions. The site’s owners have brokered a deal to sell the pollution rights of the previous coke plant to Leucadia for the new gasification plant. This move has been denied repeatedly by the EPA, citing the fact that the coke plant went under several years before the pollution regulation standards were put in place, and that those standards were not intended to give polluters an open market commodity.

In 1990, EPA restrictions halved the production of coal in this state when it was determined that coal mined in Illinois has especially high levels of sulfur, creating pollutants more dangerous than the average. As a result, most coal burned in Illinois is shipped in from out of state while Illinois coal is sent overseas to countries with lower restrictions. The environmental costs of this extra transportation have not been calculated and just might undermine the intentions of the EPA’s ruling.

Quinn has until the end of July to either sign or veto the bill.

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