- Associated Press - Wednesday, January 15, 2014

INDIANAPOLIS (AP) - A proposed $2.8 billion coal-gasification plant that won a reprieve last month from the Indiana Supreme Court is facing a new challenge, this time from environmental groups that contend the southern Indiana project’s construction permit is invalid and expired last month.

In an appeal filed Monday with the state’s Office of Environmental Adjudication, the Sierra Club and Valley Watch Inc. argue the permit is void because the public wasn’t given a chance to weigh in on developer Indiana Gasification LCC’s request for a six-month permit extension.

The groups argue that the Indiana Department of Environmental Management was required under state law to provide a 30-day public comment period on the request but approved it Dec. 26 - the same day the developers applied for the extension. Their appeal asks an administrative law judge to strike down IDEM’s decision and declare that the permit has expired.

The swift permit extension approval is “an insult to all Hoosiers,” said Jodi Perras, director of the Sierra Club’s Beyond Coal campaign in Indiana.

IDEM’s hasty same-day approval demonstrates that our environmental agency merely rubber stamps requests they receive from industry,” she said in a statement.

IDEM spokesman Dan Goldblatt said the agency isn’t required to provide a 30-day public comment period for requests for permit extensions.

“An extension is not a change to the permit. IDEM has discretion under the Clean Air Act to grant extensions,” Goldblatt said in a statement.

Perras said the Sierra Club’s reading of Indiana law is that it allows a number of exceptions to the 30-day comment period requirement but “this type of permit extension is not one of them.”

The groups’ appeal also contends IDEM did not provide a required justification for extending the permit, which will expire June 27 if construction work on the plant does not begin by that date.

Goldblatt said Indiana law requires permit holders, not IDEM, to provide a justification for a permit extension request - and that Indiana Gasification included that in their request.

Perras responded that “IDEM needed to make a finding that the extension was justified” and their approval included no such explanation.

Goldblatt said the suggestion that IDEM rubber stamps permit requests “demeans the hard work of the staff that issue permits.”

He said that while the agency approved the permit extension hours after Indiana Gasification formally requested it, the developers had contacted IDEM about extending its construction permit within a day of the Indiana Supreme Court’s Dec. 17 ruling upholding the company’s state contract with the Indiana Finance Authority.

That 30-year contract requires Indiana to buy the synthetic natural gas the plant would produce at its planned site in the Ohio River town of Rockport, purchasing it at a fixed price and then reselling the gas on the open market.

The plant’s supporters have said it would be a boon for Indiana’s coal mining industry and would bring new jobs. Opponents maintain the plant would saddle Indiana utility customers with as much as $1.1 billion in higher natural gas rates.

Indiana Gasification LCC is awaiting Gov. Mike Pence’s decision on whether he will support the project, which was championed by former Gov. Mitch Daniels.

Company spokesman Mark Lubbers said the without Pence’s approval, Indiana Gasification and its parent company, New York-based Leucadia, cannot move ahead to secure a loan guarantee from the U.S. Department of Energy.

“The project and policy are in Governor Pence’s hands. … The time has come for him to tell us if he is going to say yes or no,” Lubbers said.

Pence spokeswoman Christy Denault did not immediately reply Wednesday for an update on when the governor might announce if he’ll support the project.

Lubbers declined to comment on the environmental group’s permit challenge, aside from saying it had been expected.

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