In late 2009, Power Holdings was issued a final construction permit by the Illinois Environmental Protection Agency. The permit allows the company to construct emission source and air pollution control equipment for a plant “to produce synthetic natural gas by gasification of coal, including six gasifiers, two gas processing trains, two sulfuric acid plants, two steam superheaters, a cooling tower, an auxiliary boiler, feedstock storage and handling and other ancillary operations.”

The Sierra Club appealed the permit to the U.S. Environmental Protection Agency’s Environmental Appeals Board (EAB) in Washington, D.C. Among other issues, the national environmental group claimed the permit allows SNG or natural gas to be used to fire “superheaters” at the plant without addressing emissions associated with the manufacture of SNG.

The board denied the Sierra Club’s challenge “in its entirety,” saying it found nothing erroneous in the IEPA’s permit review process.

Joseph Darguzas, a Power Holdings vice president, called the EAB ruling “a huge win for us.” But it also was costly to the project. “What’s happened is that with the delaying tactics the Sierra Cluyb employed, our gas sales agreements had timed out.” The Illinois General Assembly approved legislation that authorized Power Holdings to enter into long-term contracts to sell the syngas to Illinois natural gas companies.

Now, Darguzas said, the company is “in the process of renegotiating those gas sales agreements.” Before Energy Capital Partners, a equity partner in the project, will release money for construction, certain conditions must be met, including having new gas sales contracts, he said. “So, we’re in the process of doing what we need to do to re-establish those agreements. At this instant, that’s the only issue that’s preventing us from moving forward.”

Construction finally could start in 2011, although that’s not definite. “Starting construction in 2011 would be a stretch,” Darguzas said. “But getting our contractors and other project partners re-energized in early 2011 is definitely what we’re planning to do.”

It would take an estimated 30 months to build the plant, which would produce about 65 billion cubic feet of pipeline-quality natural gas annually. The plant would use about 4 million tons of coal a year. The coal is expected to be sourced locally from a yet-undeveloped mine.