Southern Illinois coal-gasification plant will bring hundreds of jobs
Illinois Gov. Pat Quinn has signed legislation that will help launch a state-of-the-art coal gasification facility in Southern Illinois that will bring hundreds of jobs to the region.
Officials with Chicago-based Power Holdings, LLC say the project will create more than 1,000 construction jobs, 300 permanent mining jobs and 250 permanent plant positions. The plant will use at least four million tons of Illinois coal per year and will require the development of a new mine in Jefferson County to feed the plant once it is in operation.
“This important project will help revive the coal industry in Southern Illinois while ensuring that Illinois remains a leader in the development of state-of-the-art, lean energy facilities,” Quinn said Tuesday during the ceremony in Mount Vernon, Ill.
The plant will eventually produce enough natural gas for 500,000 homes per year. Corporate officials say the production will be enough to serve 5 percent of the total consumption of residential, commercial and industrial customers in Illinois. Groundbreaking is scheduled for later this year with testing scheduled for completion at the end of 2013 and full commercial operation in 2014.
“Projects like Power Holdings provide us with a rare opportunity to hedge our own future prices for natural gas,” said Warren Ribley, director of the Illinois Department of Commerce and Economic Opportunity. “The plant will use an affordable domestic resource, Illinois coal, which will be mined just a few miles away.”
The Senate bill, sponsored by Sen. James Clayborne, (D- East St. Louis), and former Rep. Dan Reitz, (D-Steeleville) provides the framework for Power Holdings LLC to build the $2.3 billion facility in Jefferson County that will convert Southern Illinois coal to pipeline-quality synthetic natural gas.
The new law uses a pricing formula that shields customers throughout Illinois from volatile swings in the cost of heating their homes. The law requires Illinois Utilities to buy the synthetic gas at a set price for 10 years.
Power Holdings already has an active air quality permit from the Illinois Environmental Protection Agency. Officials with the developers say they plan to use “ultra-clean” coal gasification technology for removal of harmful gases and set a new standard for commercial energy projects by capturing and storing more than 90 percent of the plant’s carbon underground.
Water for the plant will come from nearby Rend Lake. The Canadian National Railroad will transport coal to the plant.
Quinn said that Power Holdings will have to prove to state regulators that its construction and carbon sequestration costs, as well as operating expenses, are reasonable through annual reports and plant reviews. Pricing based on those costs will be guaranteed for 10 years and Illinois’ natural gas distributors will spread those costs evenly across their customer bases.
By Len Wells