Indiana Gasification has received an offer from the U.S. Department of Energy for a $1.87 billion loan guarantee to finance much of the project. In October, the company remained in negotiations with DoE for the federal money, according to William Rosenberg, president of e3 Gasification, a project co-sponsor.

The project enjoys the support of Republican Indiana Governor Mitch Daniels and benefited from legislation passed by the General Assembly in 2009 that authorized the state Finance Authority to enter into long-term contracts to purchase and sell synthetic natural gas manufactured at Rockport. The plant would use about 3 million tons of coal annually to produce about 40 billion cubic feet of pipeline-quality gas a year.

Negotiations between the company and Finance Authority also are continuing. Several environmental groups say they will oppose the permit requests, arguing the project represents a boondoggle for Hoosiers because the syngas would be more expensive than current natural gas prices.

The project was first announced in 2006.

J. Nathan Noland, president of the Indiana Coal Council, said he remains optimistic about the project, believing it eventually will become a reality.  Indiana, part of the high-sulfur Illinois Basin, produces between 30 million to 35 million tons of coal annually.