Quinn kills gas plant bill
By Mike Nolan mnolan@southtownstar.com August 10, 2012 5:06PM
A former LTV Steel coke plant at 114th Street and Burley Avenue in Chicago was to have been the site of a $3 billion coal gasification plant. Gov. Quinn on Friday vetoed legislation that would have cleared the way for the plant's construction.
Updated: September 13, 2012 6:20AM
Gov. Pat Quinn on Friday vetoed legislation that would have cleared the way for a $3 billion coal gasification plant on Chicago’s Southeast Side on land owned by three Southland men.
The bill would have forced Nicor Gas, which serves suburban customers, and downstate Ameren Corp. to buy synthetic natural gas from Leucadia Corp. for 30 years to help pay for the plant’s construction and operating costs.
The proposed plant was to be built at the site of a former LTV Steel coke plant at 114th Street and Burley Avenue in the city’s East Side community and would use Illinois coal and refinery waste.
Supporters said it would guarantee a market for Illinois coal, create jobs and assure gas supplies. Opponents said it would force utilities to buy natural gas at rates far higher than market price and lead to consumer rate increases.
David Kolata, executive director of the Citizens Utility Board, praised Quinn’s veto, saying the legislation “would have unfairly dumped the lion’s share of the plant’s cost on consumers in suburban Chicago” as well as natural gas customers downstate.
The Sierra Club, which also opposed Leucadia’s proposal, also praised Quinn.
“We applaud Gov. Quinn for taking action to protect consumers from Leucadia’s rate hike and air pollution,” Jack Darin, director of the Sierra Club’s Illinois chapter, said in a statement.
The 140-acre site that Leucadia had a tentative contract to buy is owned by three Southland men. Orland Park resident Alan Beemsterboer and his cousins — Simon Beemsterboer, of Mokena, and Steve Beemsterboer, of Frankfort — bought the property from LTV in late 2002, and their original plans were to resume making metallurgical coke using a cleaner method.
Leucadia had proposed using a chemical process at the plant for extracting what it called substitute natural gas from coal and petroleum coke, a byproduct of oil refining. The company said the bill Quinn vetoed contained consumer protections, and that natural gas users would have saved $100 million over the 30-year span of the gas-buying contracts.
Leucadia said its gas would sell for an average of $7 per million BTUs, while current market prices for natural gas are below $3 per million BTUs. The company said it expected natural gas prices to steadily rise in the coming decades as demand increases.
Leucadia proposed spending about $25 million to clean up pollutants at the site and expected the gasification plant to begin operating in March 2018.
Along with Nicor and Ameren, two other utilities, Peoples Gas and North Shore Gas, were supposed to buy Leucadia’s synthetic gas but balked at the price. By backing out, they were to have more frequent and rigorous rate reviews by the Illinois Commerce Commission.
Recently, Peoples Gas filed for a rate increase that would add $6.50 a month to the average Chicago homeowner’s bill.
Chicago Clean Energy, the Leucadia subsidiary that would have built and operated the plant, had launched an aggressive public relations campaign, with full-page newspaper ads urging Quinn to sign the bill. The project had the support of building trades unions because of the construction jobs the plant would have created.
Leucadia is moving ahead with a similar coal gasification plant in southern Indiana.
Contributing: The AP
