By SUE KENNEDY
Formerly a county government reporter for the Illinois Stale Register, she writes a monthly education newspaper for the Illinois Office of Education.

The coal boom has a big bite: Gas plants would produce needed fuel but consume water and farmland

IN TEN YEARS, the nation's supply of natural gas will be almost gone, but there is a substitute and there is plenty of it in Illinois. The state's high sulfur coal can be converted, by an expensive and complex technology, into a substitute for the nation's dwindling supply of natural gas.

In Illinois, there are three coal gasification facilities scheduled which will make the state the national leader in the new industry. The New Athens (St. Clair County) and the Perry County plants will be constructed, and a third will be the existing Powerton Plant near Pekin which will be converted to the new industry. See the accompanying map for the 29 potential coal conversion sites in Illinois. Such an industry would require an extractable coal reserve of 150 million tons per site, which is the amount needed to supply a gasification plant over its 20-year lifetime. Each of these plants would require a mine complex producing about six million tons of coal per year, and each plant would produce 250 million cubic feet of substitute natural gas each day. A 1974 study by the Illinois Institute for Environmental Quality (IIEQ) identified five sites for commercial-size plants, besides the St. Clair County site — two in Fayette County, one in Franklin County, one in Washington County, and one on the Macoupin-Madison county line.

Vast coal reserves
Illinois is second only to Montana in measured coal reserves. Most of it is a highly sulfurous, bituminous variety which cannot be burned without measures to reduce sulfur dioxide emission into the atmosphere. Sixty-five per cent of the state (86 counties) contains coal deposits totaling approximately 161 billion tons. About 14 per cent of these reserves is found in seams lying less than 150 feet deep, according to a 1974 Illinois State Geological Survey report. But Illinois must provide more than its coal if it wishes to establish a sizable coal gasification industry in the state. A sizable chunk of Illinois land and water resources, some of them irreplaceable, must also be committed if industry is to be attracted to the state.

The conversion process
Balking at the cost of installing stack gas scrubbers to eliminate sulfur dioxide after burning, industry nationwide is turning to coal conversion. "You name a major oil company, and they've got a big budget going for coal gasification, and each thinks they've got the best process," said Jack Howard, manager of coal development in the Illinois Department of Business and Economic Development (BED).

The conversion process itself is relatively simple, although there are as many variations as there are companies involved. Basically, coal is heated in the presence of steam which causes some of the hydrogen in the steam to unite with the carbon in coal. This forms methane (CH4), the principal ingredient of natural gas. Besides producing methane, the process also generates carbon monoxide and hydrogen. These two gases can be made to react to form more methane in a step called methanation.

During the gasification process, some of the carbon is burned in the presence of air (O2) to produce the heat that makes the process work. This burning yields carbon dioxide as a waste product as well as ash and sulfur which can be sold or stored. To get a high quality gas the oxygen content in the gasifier is increased, yielding a higher percentage of methane. In liquefaction, coal is heated to produce gas which then reacts

16 / November 1976 / Illinois Issues

under pressure with hydrogen to produce a liquid plus leftover char. Industry's desire to scale this process to modern needs has spawned a profusion of pilot and demonstration plants all over the country in the past few years.

Illinois' first major coal conversion plant will combine the technologies of gasification and liquefaction to produce a high quality synthetic natural gas (SNG) that can be burned in homes and a low sulfur fuel for industrial use and liquid products. It will be located on 2,000 acres between New Athens and Fayetteville in the Kaskaskia River Valley in southeastern St. Clair County, approximately 30 miles southeast of St. Louis. BED'S site proposal for the Coalcon project listed assets of the area including the existence of 1.6 billion tons of mapped coal reserves within the six township area surrounding the site — an amount which could provide "seven times the estimated 110 million tons required by the commercial plant over a 20-year period."

New Athens demonstration plant
Initially, the plant will be a demonstration model and will be purchased by Coalcon at the end of three years of testing. The federal Energy Research and Development Administration (ERDA) awarded the contract to Coalcon, a partnership since 1974 between Union Carbide Corporation and Chemical Construction Corporation (a unit of General Tire's Aerojet-General Corporation), and announced the site selection last November after examining 17 other sites in five states (Ohio, Pennsylvania, West Virginia, Kentucky and Indiana). The demonstration plant is to be based on a pilot plant run by Union Carbide in Lake DeSmet, Wyo., over the past 10 years. It will be one-fifth the size of the commercial plant and have a design life of 20 years.

A high pressure hydrocarbonization process will be used to convert 3,850 tons of coal a day to 4,142 barrels of liquid and 20.2 million cubic feet of gas products in the demonstration phase. "Coalcon is taking advantage of coal's natural tendency to change to both a gas and a liquid in the conversion process," Howard explained. "It's harder to drive the substance completely to either a liquid or a gas." The greatest potential from coal conversion in Illinois is a coal chemicals industry, Howard said, reflecting Coalcon's focus on the liquefaction process. "Many products which were made from crude oil when it was cheap can be made from coal." Fuel oil and chemicals such as ammonia and naphthalene will be produced at the New Athens plant. The sulfur produced in the process will be sold to make sulfuric acid, if possible. If it cannot be sold, the material will be given away or stored until it can be marketed. The ash yield, to be buried on the site, will be about 10 per cent of the total coal processed daily, or about 385 tons if 3,850 tons of coal are used. Besides coal supplies, other resources are needed to operate a gasification plant, and Coalcon executives believe those resources are available at the New Athens site. Nearly 2 million gallons of water, 80 per cent of which is totally consumed in the process, will be withdrawn daily from the nearby Kaskaskia River in the first phase. About 21 million gallons of water will be withdrawn for the com- mercial plant. Should supplies run low, a prospect designers say is unlikely, plans are being made to pumpadditional water from the Mississippi River.

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Specific state incentives proposed for the New Athens plant include water at no charge during the life of the demonstration project, cheap river frontage., extension of roads at no cost and a 5-10 year property tax break on leased lands

Electricity to run the plant will be supplied by the nearby Baldwin power plant. Transportation in the area includes the Illinois Central Gulf Railroad, U.S. Route 460, Illinois Route 13, and various natural gas and refined products pipelines passing close by the site. Also, barge service with the ability to transport up to 20 million tons of coal per year will be available on the Kaskaskia River following completion of the navigation channel in 1978. Finally, the metropolitan St. Louis area will provide the sizable construction, maintenance and operation crew.

The only real concerns with the site involve possible environmental problems in the future, according to proposal writers. "A well controlled coal conversion demonstration facility would not contribute sufficient particles and sulfur dioxide (to the atmosphere) to exceed the allowable increments. However, a commercial plant may create some problems because of its size." An environmental impact statement on the project remains to be done, although Coalcon completed an environmental assessment as part of selection criteria imposed by ERDA. The design phase is expected to take 18 months and cost $17 million. Construction is planned to start in 1977 with plant operation in 1980. The commercial plant is expected to be in operation by 1985.

Perry County and Powerton sites
The Perry County coal conversion facility, which will also employ liquefaction and gasification technologies, will be located approximately 11 miles southwest of Pinckneyville. In its demonstration phase it will produce 22 million cubic feet of pipeline quality gas and 2,000 barrels of crude oil per day from 2,300 tons of coal. Water will be piped from the Mississippi River, along a previously obtained, 17-mile right-of-way.

A $20 million engineering and development phase will begin immediately in Perry County. The Illinois Coa1 Gasification Group (ICGG), a consortium among Northern Illinois Gas Company, Aurora; People's Gas Light & Coke Company, Chicago; Central Illinois Public Service Company, Springfield; Central Illinois Light Company, Peoria, and North Shore Gas Company, Waukegan, was selected by ERDA (Energy Research and Development Administration) this summer to build the facility. Construction on the demonstration plant will begin in 1978 if Congress approves the funding. Commercial plant construction will begin around 1985.

Both the New Athens and the Perry County sites are nearly perfect locations for a coal conversion facility according to BED Manager of Program Development Rusty Glen. Land (previously stripped and reclaimed), water and coal are all readily available. The companies which will provide much of the coal for plant operation also own all the land needed for the facilities. "This makes it much easier than having to deal with several landowners," Glen says. About 65 per cent of the coal to be used in each facility will be taken from nearby mines. The rest will come from various parts of the United States and Europe, to test different grades.

Lastly, ERDA gave the go-ahead this summer for an on-site coal conversion facility at Commonwealth Edison's Powerton Plant near Pekin. The facility will produce boiler fuel for use in the electric generating plant.

Although industry has done its part to bring coal conversion to Illinois, government has also aided the project ERDA is financing the New Athens plant to the tune of approximately $110 million while Coalcon is sinking around $100 million into it, and the state of Illinois will contribute S25 million from coal development bonds.

ERDA will finance approximately 50 per cent of the $276 million Perry County project and the $105 million Powerton facility. The State of Illinois will contribute $7.2 million to the Powerton facility, and Commonwealth Edison will pick up the balance. ICGG presently plans to spend around $130 million on the Perry County plant. Illinois' share has not yet been determined, but could be around 10 per cent of the iota! project cost. The Coal Development Bond Act A string of state legislation passed in recent years has made possible the financial backing of coal conversion in Illinois. The Illinois Coal Development Bond Act (P.A. 78-1 122). which passed in 1974, provides $70 million from the sale of bonds for financing a state research, development and demonstration program primarily in coal. BED (Illinois Department, of Business and Economic Development) was granted extensive powers of eminent domain to acquire property, mineral or water rights for the development of such resources. And, an advisory council composed of the governor, lieutenant governor and heads of resource concerned state agencies was created to

18 / November 1976 / Illinois Issues

advise the BED. Principal sponsor of the legislation was Sen. Bradley M. Glass (R., Northbrook).

At the same time, former Rep. Robert W. Blair (R., Park Forest), steered legislation through the General Assembly to create the Illinois Energy Resources Commission, composed of legislators and private citizens. In addition to recommending strategies for solving energy related problems in Illinois, the commission authorizes the issuance and sale of bonds for coal development projects it deems worthy.

The state commitment to coal development is firmly established. However, in the 1975 legislative session, the idea was expressed that perhaps the powers of eminent domain extended to the BED in the Illinois Coal Development Act were a bit too broad. Since the law had been enacted to give industry the incentive to develop coal resources, many thought it was not proper to give a state agency the power to condemn private land for private use. P. A. 79-713, sponsored by Rep. John S. Matijevich (D., North Chicago), amends the Coal Development Bond Act stating that the BED'S power of condemnation be exercised "solely for the purposes of siting and; or rights of way and or easements appurtenant to coal utilization and / or coal conversion projects". Another bill. H.B. 1704, sponsored by Rep. Adeline Jay Geo-Karis (R,. Zion), was passed to amend the Illinois Coal Development Bond Act to provide for the development of other energy sources, but it was vetoed by Gov. Dan Walker.

Specific governmental incentives In addition, to help make Illinois' high sulfur coal a bit more "usable" while coal conversion techniques are refined, Rep, Richard 0. Hart's (D., Benton) legislation (P.A. 79-1099) directs the Illinois Pollution Control Board to set regulations for "internment control systems." The measure allows industries in low pollution areas to burn high sulfur coal as long as sulfur dioxide emissions do not exceed the minimums set by law. An intermittent control system entails selling up sensors around a plain to monitor emissions.

Specific governmental (state and local) incentives included in the BED'S site proposal for the New Athens project offered industry;

- water at no charge during the life of the demonstration project by virtue of state-owned land adjacent to the Kaskaskia River.

- lease frontage on the river for water intakes and discharge flumes from the state at an annual cost of S!0 per foot of river frontage and S75 an acre of backland;

- extension of county roads to state highways at no cost;

- a tentative 5-to-10-year property tax moratorium for lands leased by the state (The county government also indicated there is wide discretion on valuation of the leasehold.);

- the use of BED'S powers of eminent domain.

The proposal also noted BED s efforts to establish a U.S. Bureau of Mines research station at Carbondale, one of five in the country, for the study of coal mining and reclamation problems A Coal Extraction and Utilization Resource Center also exists at Southern Illinois University at Carbondale for this purpose. Also. the proposal states that three southern Illinois colleges have programs to "train, retrain or upgrade workers for Illinois mines. .

The impact of such an industry in several areas of Illinois would drastically affect not only the geography of the state, but its inhabitants as well. Water rights and loss of agricultural land are just two of the issues that will face Illinois citizens in counties where future plants are being considered. At least one community action group concerned about the growth of the coal conversion industry in the state. According to members to the Illinois South Project, based in Carterville, the question that Illinois citizens need to ask regarding this new industry is: "Who will benefit from coal and energy development projects, and who will pay the long-term costs?" Project member Dave Ostendorf acknowledges that the coal gasification industry may bring certain benefits to the state and nation, but only if its growth is managed so as to have the least possible adverse effect on the environmental and economic bases of the states involved.

Tax costs
For starters, Ostendorf says citizens should be aware of the tax impact of any new plants on the community. For example, the 5-to-10-year tentative property tax moratorium originally offered by St. Clair County for lands leased by the state to Coalcon could put a heavy burden on New Athens taxpayers, he says. Community residents would have to bear costs for an array of municipal services for the large number of newcomers the plant is expected to bring. "It is imperative," Ostendorf said, "that any preferential treatment extended to industry does not result in an additional tax burden on residents of the community."

Ostendorf also points out that a commercial size coal conversion plant would require between 10,000 and 20 000 gallons of water per minute to operate. Between 14.4 and 28.8 million gallons per day would be entirely consumed in the process. The Illinois Water Survey has already identified 240 potential sites for gasification related reservoirs, according to Ostendorf. "Even if the water base were there," he said, "Illinois does not have a water permit statute that would control the rate and amount of water withdrawn from a natural watercourse or from groundwater or diffused water sources." Ostendorf said that the Illinois Economic and Fiscal Commission (a legislative study commission) made clear in Water Resources Management in Illinois: A Program Review (1974) that Illinois water rights law is largely an archaic and jumbled system of case law rather than

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statutes, and that the system is heavily based on riparian rights which allow an owner of land adjoining a naturally flowing stream to use water at his own discretion. The report states that "it is still private ownership of riparian land which generates the recognized right to use water, and not consideration of social and economic impact."

Water supply
In regard to water supply, the commission's report stated, "There is still enough water in the state to meet current overall demand projections. A number of things could happen, however, which would change the situation dramatically. Two of the most important would be a substantial drought and the widespread use of coal gasification." The report adds that within 50 years, regardless of either impact, water supply problems can be expected in La Salle-Peru, Springfield, Carbondale, East Moline and Cook County. Ostendorf added, "The issue, it seems, is relatively simple: unless Illinois enacts a water permit statute or clearly delineates legal definitions of how much water can be withdrawn from a natural source, by whom and for what purpose, this water-consumptive coal gasification industry could play havoc with Illinois' water supply. Citizens must be assured, at the very least, that their municipal water supplies will not be interrupted."

One piece of legislation in this vein, H.B. 1786, was introduced by Rep. Thaddeus S. Lechowicz (D., Chicago) during the past legislative session as a result of the commission's study to establish a system of registration and permits for large uses of water. The measure, which was sent to the Study Calendar on Counties and Townships — where it stayed — would have created the Illinois Water Resources Authority. Similar legislation is being drawn up in the Illinois Division of Waterways. "Coal gasification has long been a concern to us," commented Bruce Barker of the division. "It's kind of a double-edged sword with regard to water supply. We need the water for energy production, but one coal gasification plant would use water like the whole city of Rockford or Peoria."

In addition to allocating water based on supply, he says a permit type statute applied on an area-by-area basis would help the state to direct large-scale users to regions of adequate supply. And, by rationing the naturally available stream flow, he believes industry will continue to augment Illinois' water supply with reservoirs. "We're really trying to prevent any cutthroat competition with this permit system. We want people to realize the effect their water usage has on their neighbors." The division's legislation would differ from H.B. 1786 primarily in that existing agencies would administer the program.

Glen of the BED predicts that such legislation will be law in three to five years. "There is need for a system of permits for water usage. Communities need to be able to plan for their water needs. This will institute a kind of 100-year growth limit to assure a reassessment of needs."

Agricultural land
Illinois South Project members believe that the impact of a widespread gasification industry on agricultural land in the state should also be assessed. They point out that Illinois, the nation's leading agricultural exporter, is losing farmland at the rate of about 100,000 acres per year, according to an Illinois Department of Agriculture estimate. "New coal mines — both deep mines and strip mines — along with a coal gasification industry, including the possible construction of new reservoirs, pose a quiet, but potentially severe threat to agricultural lands," Ostendorf said. "One high energy plant would require disposal of about 5,000 tons of solid wastes each day. If used as land fill, this would require 1,250 acres of land covered to a depth of 10 feet over the 20 year life of the plant."

One nonprofit energy research organization, the Environmental Policy Institute (EPI), based in Washington, D.C, claims that Illinois strip mine laws both directly and indirectly encourage the loss of farmland, and that 5,000 to 6,000 acres of farmland are lost to strip mining in Illinois annually. In a recent report, "Strip Mining in the Corn Belt," the EPI says the Illinois Mined Land Conservation and Reclamation Act and Rule 1104 encourages this loss due to the absence of any provision for determining pre-mining agricultural productivity or yield. "There are serious questions as to whether high capability agricultural lands strip mined for coal can be returned to their original capabilities within an acceptable period of time." It can take 10 to 30 years to restructure agricultural soil after strip mining, researchers say.

The loss of farmland can be lessened through the use of deep mining, however, the report states. "There is more deep-minable coal in four Illinois counties — Jefferson, Macoupin, Montgomery and Sangamon (22.3 billion tons) — than there is strippable coal in the entire state (19.5 billion tons). In fact, there is more deep-minable coal in Illinois than there is strippable coal in the entire nation." In regard to Illinois' importance as an agricultural state, the report adds, "As of 1975, Illinois accounted for 15 per cent of the nation's export shares for feed grains and feed products, ranking second in the nation, and 16 per cent of the nation's export shares of soybeans and soybean products, ranking first in the nation." Illinois South Project members and others concerned about the growth of the coal conversion industry believe Illinois citizens have not had a great deal of influence to date on governmental decisions which are accelerating what is termed "the new coal boom." Ostendorf concludes, "If citizens are to have any voice concerning the siting and development of new plants, they must work quickly to recapture their role in governmental decision-making processes." 

20 / November 1976 / Illinois Issues