World-class Coal Facility Advances with IDEM Proposed Permit

Indiana facility to produce SNG and liquefied CO2, reduce dependence on foreign oil, create 3,000 jobs

ROCKPORT, Ind., May 7, 2012 /PRNewswire-USNewswire/ — Indiana Gasification today welcomes the decision by the Indiana Department of Environmental Management (IDEM) to file a proposed permit for our company’s state-of-the-art plant with the U.S. Environmental Protection Agency (EPA).

“For Indiana, its energy future is now. The IDEM proposed permit demonstrates that our gasification facility will be the cleanest coal plant ever permitted in the United States and among the cleanest in the world,” said Bill Rosenberg, a partner in Indiana Gasification and former Assistant Administrator for Air for EPA. “Our facility will create more than 3,000 jobs (including about 1,000 plant construction jobs, 2,000 jobs to construct an interstate CO2 pipeline, and 500 on-going jobs from plant operation and mining), enhance the nation’s energy security, and reduce this nation’s carbon footprint. Equally important, this facility demonstrates that clean coal remains an integral part of the ‘all-of-the-above’ approach to domestic energy production endorsed earlier this year by President Obama and numerous energy experts,” Rosenberg added.

The IG plant will not burn coal. Rather, the gasification process will convert approximately 10,000 tons per day of coal into substitute natural gas (SNG) and liquefied carbon dioxide (CO2). About 80% of the plant’s SNG output will be sold to the Indiana Finance Authority under an agreement that guarantees Indiana ratepayers savings of at least $100 million over 30 years. The 38 million mmBtu of SNG sold to the IFA is about 17% of the gas used by Indiana gas consumers and will be an effective buffer against the historic price volatility of the natural gas market.

CO2 generated by the production process will 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 effort will produce from 10 to 20 million barrels of oil annually. At $100 per barrel of oil, the domestic oil production created by our facility in Indiana will reduce our imports of foreign oil, including oil from the Middle East and from unstable countries such as Venezuela, by up to $2 billion a year.

The facility has been strongly supported by parties looking out for the long-term energy and environmental future of the state, which is served by producing stable, long-term, clean energy in Indiana with local workforce and resources. The partners in IG believe that coal can and must be part of our energy future. The United States has 28 percent of the world’s coal reserves, just 2 percent of the oil reserves and only 4 percent of natural gas. The IG facility is proof that clean coal is feasible, available and affordable.

Moreover, the permitted emissions limits for the IG facility prove that such a project is safe and protective of Indiana air quality. For example, Vectren, a southern Indiana utility, operates three coal-burning plants that in 2009 and 2010 used roughly the same amount of coal that will be refined by IG. Vectren’s plants released 9,400 tons of SO2 a year. IG’s limit is 100 tons of SO2 annually. The permit proposed by IDEM today is an important step toward the future of advanced technology, energy independence, and local job creation.

“The IG facility will increase the use of our domestic resources, and we look forward to moving forward with a project that is good for Indiana–and the nation,” Rosenberg said.

Below is a fact sheet.

Construction on this state-of-the-art facility will not begin until after IDEM approves the environmental permits. If all goes as planned, construction will begin in 2013.

To view IDEM’s proposed permit, please visit: http://permits.air.idem.in.gov/30464p.pdf

Indiana Gasification LLC
FACT SHEET: INDIANA GASIFICATION, LLC
Detailed Highlights from the Air and Water Permit Applications
May 2012

Feedstock

• At design, annual usage of approx. 3.85 million tons of Illinois Basin coal, with the possibility of substituting a portion of this with petroleum coke.

Annual Substitute Natural Gas (SNG) Production

• Approximately 47 million mmBtu (about 38 million mmBtu will be sold to the Indiana Finance Authority, equivalent to approximately 17 percent of the amount used by residential and commercial customers in Indiana)

Annual Liquefied Carbon Dioxide (CO2) Production

• Approximately 5.5 million tons
• Will be sold for use in enhanced oil recovery operations in the Gulf Coast Region (estimated to help produce 10,000,000 to 20,000,000 barrels per year of additional domestic oil)[1]

Emissions Performance Highlights

• As a result of using gasification technology and state-of-the-art controls, permitted emissions will be extremely low (in tons per year):

    -- NOx               127
    -- CO                634
    -- VOC                16
    -- SO2               100
    -- PM-10              67
    -- HAPs               19

• In contrast, a typical coal-fired power plant will emit at significantly higher rates. For example, the Vectren coal electric fleet of three facilities in this region burned an amount of coal in 2009 and 2010 equal to approximately 80% annually of the amount of coal that will be processed by Indiana Gasification. Vectren’s plants released 9,400 tons of SO2 annually. Indiana Gasification has requested a permit limit of approximately 100 tons of SO2 annually.
• The Indiana Gasification facility will also emit significantly less amounts of lead and mercury than comparable facilities. The proposed permit for the Indiana Gasification facility allows for approximately ten times less lead emissions than nearby traditional coal-fired power plants and half as much lead emissions than comparable IGCC facilities on a per ton of coal basis. As for mercury, the proposed permit for the Indiana Gasification facility allows for approximately seventy times less mercury emissions than nearby traditional coal-fired power plants and three times less mercury emissions than comparable IGCC facilities on a per ton of coal basis. This means that less than 4 lbs./year of mercury will be emitted from the facility.

Clean Air Act Permit Status

• The Indiana Department of Environmental Management (IDEM) has submitted a proposed permit to the U.S. Environmental Protection Agency (“EPA”) for review, including IDEM’s response to the comments received from the EPA and the public on IDEM’s draft Clean Air Act construction and operating permit. IDEM previously published the draft permit for public comment, and held a public meeting and hearing on January 25, 2012.

Clean Water Act Highlights

• The water permit application provides for water to come from the Ohio River. Average usage equates to approximately 0.2% of river flow at low flow conditions. No water will come from area aquifers.
• The facility will collect stormwater that falls on various areas of the plant for use in the process, which will result in both reducing water usage from the Ohio River and reducing the potential for discharge of coal contaminated stormwater.
• The facility will filter and reuse the majority of the wastewater coming from the gasification process, with the residual evaporated. There will be no discharge of gasification process wastewaters.
• Water discharges will include stormwater and non-process waters from the cooling towers, boiler, and reverse osmosis systems. Discharges will meet effluent requirements of wastewater discharge regulations.

Byproducts

• Sulfur in the feedstock will be processed into sulfuric acid, which Indiana Gasification will sell into the industrial market.
• Heat generated during the gasification process will be used to produce steam for steam turbines that can produce approximately 300 MW to meet essentially all on-site power needs, with utility interconnection for minor power balancing.

[1] Assumes an average value of 0.25 metric tons of CO2 per incremental barrel of oil produced. See Advanced Resources International, U.S. Oil Production Potential from Accelerated Deployment of Carbon Capture and Storage, March 2010 (p. 20). Paper indicates average values of 0.22 to 0.28 metric tons of CO2 per incremental barrel of oil under different scenarios.

SOURCE Indiana Gasification, LLC