We might have defeated "Indiana's Enron" last week. Leucadia Energy's Rockport Coal Gasification Boondoggle—environmental threat, financial threat, and perversion of democracy in Indiana—is now off, according to the company. Self-proclaimed Free Marketeers in the Indiana legislature previously voted to require Hoosiers to pay far above the market price for Unnatural Gas, aka syngas, that is, a mixture of hydrogen and carbon monoxide made from coal and water. This corrupt deal would have been law for thirty years. Now they have changed their minds under intense public pressure. Even our egregious Gov. Mike Pence and House Speaker Brian Bosma have backed away from the deal. Leucadia is complaining bitterly that Indiana changed the rules in the middle of the game. Which is true. The public was outraged at the previous outright legislative theft, and they had to give it up.
Boo-hoo. It couldn't happen to a more deserving bunch of kleptocrats.
Now let me tell you a bit about them down below the vignette of orangeosity, and about the deal, and the very elementary science and economics involved that are entirely beyond the ken of Republican politicians, even in circumstances where they understand public outrage just fine.
Here is the state of play.
Leucadia to quit Rockport coal project
Developers that financed a project that would turn coal into synthetic natural gas [WRONG; see Science! below] say they're closing up shop.
Indiana Gasification LLC, financed by [Leucadia Energy, a subsidiary of] Leucadia National Corp., is embroiled in a court case over the validity of the 30-year contract it signed to sell its gas to the state from a plant in Rockport. The General Assembly is ordering state regulators to take a second look at the contract, but only if the Indiana Supreme Court either doesn't take the case or rules that the contract isn't valid.
Leucadia spokesman Mike Murphy said that even if the company wins the court case, it would take an attitude adjustment from lawmakers and Gov. Mike Pence for them to resume building the plant.
"We have been disappointed by the state's breaking its commitment to the plant and the project," Murphy said. "They have changed the rules in the middle of the game."
As Indiana gasification plant stalls, so does CO2 pipeline
This monster was to be so big that it could justify a CO2 pipeline from Rockport to the Louisiana oil fields, where the CO2 would be pumped into wells to increase yields. The industry says that no coal-fired power plant is big enough to support such a pipeline.
The Rockport deal has been to the Indiana Legislature and the courts many times over, and has been fought from the beginning by various environmental and consumer groups. I got into it through the Sierra Club.
The Indiana Court of Appeals struck down one provision of the contract, and now Leucadia says it won't play this game unless it gets every word of the previous contract back.
I am not going to give you the whole sorry history here, but I have some links, including some from when the deal appeared to be wired. I don't have much on Leucadia apart from its energy deals. It doesn't get much media coverage. I can definitely tell you about the science and the con jobs involved.
State, developers reach agreement on Rockport, Ind., gasification plant
Under the deal the two sides agreed to, for a period of 30 years, Indiana will buy gas at a permanent price of about $6 per unit [of 1000 cubic feet], which is more expensive than natural gas is today but would represent a major savings over the course of the contract.
Except that it turns out that due to fracking the cost of natural gas has sunk well below that price, meaning that this deal would have become a tax on ratepayers for the sole purpose of enriching Leucadia.
Here are the reaction from the Citizens Action Coalition, and their fact sheet.
Rockport Coal-to-Gas Plant: Indiana's Enron
Our latest Indiana Gasification Rockport Plant Fact Sheet
Advance Indiana: Leucadia Tax On Natural Gas Users Thanks To Lawmaker Representing Coal Interests
And the Sierra Club.
Indiana Beyond Coal: 'No Leucadia Tax' Campaign
Here is a similar project by Leucadia in Illinois. There are others besides these two, all involving corrupt dealings with politicians for unconscionable subsidies by ratepayers.
Clean-Coal Debate Focuses on Gasification Plant
Science!
Chemistry and economics, as promised.
Firstly, almost everybody calls this synthetic natural gas. It is not. It can correctly be called synthesis gas or syngas. Natural gas is mostly methane, CH4. There was to be no methane in the syngas from Rockport. It was to be hydrogen cracked from water, together with carbon monoxide, CO, which is to say, half-burned coal, made with the oxygen from the cracked water. Except that in energy terms it is rather more than half burned, as I explain below.
Secondly, they call this by the oxymoron Clean Coal. This is not only Dirty-as-Ever Coal, it is in reality only about Filthy Lucre. The only Green thing about it is the Benjamins.
Thirdly, and most importantly, there is this rule called Conservation of Energy that says that you cannot get more energy from coal by jiggering with chemistry than you can just by burning it. In fact, the engineering works built around the chemistry necessarily suck up energy, and you necessarily end up with less energy than you started with.
The basic reaction is burning coal and oxygen to carbon dioxide, releasing energy, and of course adding to global warming.
C+O2→CO2+energy (32 Mj/kg of C)
The energy unit here is megajoules of energy from burning each kilogram of coal. As long as we use the same unit, you can ignore what that means to a physicist or chemist, and just compare the numbers. It is when you change units, say to BTU/lb, that you get into fiddly multiplications by numbers you can't remember. Just forget I mentioned it, OK?
No? Well, for those not intimidated by numbers and equations, there are tables of heats of combustion for a variety of fuels at Wikipedia, giving results in three different units. Knock yourself out.
The Rockport project proposed instead to do
C+H2O→CO+H2-energy
and then
CO+H2+O2→CO2+H2O+energy
ending up with less than the 32 Mj/kg we could have gotten from the coal. So we have to use more coal or some other fuel, and generate more CO2 and make global warming just that much worse, unless the pipeline could take some of it away to be sold.
I gave you only the starting materials and end products above, leaving out the fact that the coal actually gets burned to carbon dioxide and then partially unburned to carbon monoxide, with more energy lost. Those who know how to do this sort of thing will have no trouble writing the extra equations and looking up the resulting energy inputs and outputs. However, for political purposes, the engineering details do not matter. As long as you are clear on Conservation of Energy, the rest of Leucadia's pitch is smoke and mirrors. Especially smoke. You can see more here if you like.
Burning coal to carbon monoxide yields 21 Mj/kg, while burning CO to CO2 later on yields only 11 Mj/kg. Those 21 Mj/kg from the first stage are used, with some losses, to crack water,
2H2O→2H2+O2-142 Mj/kg of hydrogen produced
and then when you burn a kilogram of hydrogen you get back the same energy you put into cracking the water, minus the wastage, together with the same amount of water you started with. A kilogram of hydrogen plus about 8 kg of oxygen makes about 9 kg of water.
In sum, you get less energy out of this convoluted process than you would have gotten from just burning the coal. However, they get to claim that this is Clean Coal, that the process is cleaner and more environmental than burning coal, that it is Green even, that it fits into the dreaded Obama All of the Above energy strategy, and is good for Global Warming. (Except that it isn't.) As long as you are talking to people who don't know any science, or preferably don't care.
Then Indiana utilities would have been required to pay a contract price for the syngas far above the price for the amount of natural gas needed to produce the same energy. It would also be much higher than the cost for the same amount of locally-produced wind power. The only clean thing about it was taking Hoosiers to the cleaners by force of law.
Leucadia
Perhaps you have heard of the Leisure Class that was the subject of Thorstein Veblen's greatest work, or the Malefactors of Great Wealth that Teddy Roosevelt railed against, or the Economic Royalists whose hatred FDR welcomed, or the 1% that the Occupy Movement goes on about. These are another branch of the same mob.
Here is their version of themselves.
Leucadia Energy
Leucadia Energy is a subsidiary of Leucadia National Corporation…which is a Fortune 500, NYSE-listed company that owns and operates a broad portfolio of businesses including mining operations, forestry and drilling companies, beef processing plants, vineyards and insurance.
Although Leucadia's energy projects have aroused intense opposition from environmental and consumer groups, it is almost completely under the media radar outside the energy business, and is wired into both Democratic and Republican politics. Leucadia National's chairman and CEO is Ian Cumming. Cumming was a member of President Obama’s 2008
National Finance Committee and has played other roles in Democratic politics. He also contributes to Republican politicians.