New York-based Leucadia has promised its synthetic gas would cost $0.70 to $0.80/therm. Current market prices are about $0.45/therm.
The legislation requires three Illinois natural gas companies—Peoples Gas, Nicor and Ameren Illinois—to enter into 30-year agreements to purchase all of the plant’s projected output of 40 billion cubic feet annually. Peoples opposed the bill to no avail, but the project generated a sufficient mix of support from Downstate lawmakers from traditional coal-producing counties and their Chicago metropolitan counterparts who argued the plant would stimulate needed economic development, particularly on Chicago’s South Side.
During Senate debate on the bill, Donne Trotter, a Chicago Democrat and the primary sponsor of S.B. 3388, stressed Leucadia would be required to use about 1.5 million tons
of Illinois coal annually for up to half of the gasification process. “This bill does generate jobs,” said Trotter, adding it would create 1,100 to 1,200 construction and 200 to 300 permanent jobs.
Phil Gonet, president of the Illinois Coal Association, applauded Leucadia’s approval. A similar coal gasification project for Power Holdings of Illinois LLC also passed the General Assembly. Together, the two plants would produce more than 20% of the gas used in Illinois.