Leucadia Front Man Claims Rockport Deal Dead Because Legislation Requires Oversight Of $2.8 Billion Project

The politically-connected company behind a proposed $2.8 coal gasification plant at Rockport say their plans to build the plant are dead if Gov. Mike Pence signs into law legislation requiring further regulatory oversight of the project. Under a one-sided agreement inked with the company by former Gov. Mitch Daniels, Indiana utility companies would be forced to purchase the high-priced gas produced at the plant, which would be passed on to the state's natural gas utility consumers. The Evansville Courier-Press's Eric Bradner has the company's reaction through the eyes of former Gov. Mitch Daniels' old pal Mark Lubbers to the legislation passed last night by lawmakers before they adjourned for the year.

A tough set of oversight measures for the proposed Rockport coal-to-gas plant has won Indiana lawmakers’ approval despite developers’ warnings that the new standards would surely scuttle their $2.8 billion project.

The legislation’s passage in the House and Senate in the wee Saturday morning hours could ease new Republican Gov Mike Pence's path out of the 30-year contract inked two years ago by his predecessor, former Gov. Mitch Daniels.

Though the state’s deal to buy and then resell the Rockport plant’s synthetic natural gas is the subject of a legal battle currently pending before the Indiana Supreme Court, developers said even a victory there could not save the project.

“We would have never spent a dime on this plant if the law passed tonight had been in place,” said Mark Lubbers, the project manager for Indiana Gasification LLC, which is being financed by New York-based Leucadia National Corp . . .

Lubbers said the resulting bill would force the plant through new hurdles that would delay construction by at least two years, and it would put in place the kind of constant regulatory review that developers had sought to avoid.

As a result, he said, the project cannot go forward.

“The legislature has killed 1,500 high-paying jobs and $1 billion of guaranteed consumer savings,” Lubbers said.

“Indiana Gasification invested $20 million in engineering, land acquisition, permitting and regulatory approval in good faith and in reliance on the rule of law. Now, after four years and on the verge of construction, the legislature has changed the law.”

Well boohoo, Mark. So you won't get the multi-million dollar payoff you expected to receive on the backs of utility consumers. Your loss will be the public's gain. Let's hope that Gov. Pence signs this much-needed legislation to help level the playing field from the public's standpoint.