NewGas Energy Center

On December 16, 2008, ConocoPhillips and Peabody Energy filed for a state air permit to build a coal-to-natural gas facility in Muhlenberg County, at the same location that Peabody had wanted to build the Thoroughbred Generating Station. NewGas Energy Center would gasify coal and petroleum coke into natural gas. Permits for the plant have been the subject of ongoing legal challenges.

History
On April 6, 2009, the Sierra Club submitted comments on the air permit application that noted deficiencies and omissions contained in Kentucky Syngas's Modeling Report. As of May 2009, the Kentucky Department for Air Quality is reviewing the air permit application.

As of June, 2009, the Kentucky Division for Air Quality is finializing an internal draft for the permit. Updates can be found on the Division's webpage.

On December 15, 2009, ConocoPhillips and Peabody announced that Kentucky regulators had issued a draft air permit for the plant. A Peabody spokesperson said that the permit process will continue for another year, at which point the companies will review the project and evaluate the prospects for the long-term gas market. Construction will take about four years.

On January 19, 2010, the Sierra Club and its allies submitted comments on the draft air permit, saying the permit is deficient for several reasons: it contains inadequate emission limits for several air pollutants, such as particulate matter, and does not contain any emission limits for carbon dioxide, the leading greenhouse gas that causes global warming. Additionally, the draft permit does not properly account for methane flaring emissions during times of startup and shutdown. Sierra Club also alleges that, during the permitting process, the Kentucky Division for Air Quality failed to consider cleaner alternatives to the proposed plant, such as increased energy efficiency and renewable energy, and did not consider cleaner fuel options for the project.

On April 9, 2010, the Kentucky Division for Air Quality issued a final prevention of significant deterioration (PSD) air permit/proposed Title V operating permit for the plant.

On May 7, 2010, Sierra Club and Valley Watch filed a petition for a hearing to contest the final air permit for the plant, saying among other things that the Division wrongfully classified the facility as a minor source of hazardous air pollutants to avoid critical maximum achievable control technology (MACT) requirements.

On July 20, 2010, the D.C. District Court dismissed Sierra Club’s lawsuit against the EPA. The District Judge ruled that the Court lacked jurisdiction to review the agency’s decision. On September 1, 2010, Sierra Club and Valley Watch appealed the decision to the D.C. Court of Appeals. On September 24, 2010, the Kentucky Division for Air Quality issued what Sierra Club called "a slightly revised Title V operating permit" in response to EPA concerns that the NewGas plant would violate national ambient air quality standards (NAAQS) for fine particulate matter.

On January 10, 2011, Sierra Club and Valley Watch filed their opening brief in the appeal challenging the EPA moving forward "under a defective State Implementation Plan (SIP)." In their brief, the environmental groups argue that Kentucky’s SIP still fails to meet two important requirements of the federal Clean Air Act: it does not require companies to notify the public about a project's impacts on air quality in surrounding wilderness and national parks, and it does not require new sources to demonstrate that nitrogen oxide (NOx) emissions will not violate ozone air quality standards.

On May 31, 2011, a Secretary of the Kentucky Energy and Environment Cabinet affirmed the final air permit for the proposed NewGas plant. On May 18, 2011, the Hearing Officer issued a second report, recommending that the Secretary dismiss the environmental groups’ claim that the Cabinet erred when it failed to hold a public comment period after modifying the Title V operating permit to address EPA concerns.

On July 1, 2011, the U.S. Court of Appeals for the D.C. Circuit upheld the District Court’s dismissal of Sierra Club and Valley Watch’s lawsuit against the EPA.

Project Details
Sponsor: ConocoPhillips, Peabody Energy Location: Muhlenberg County Capacity: Type: Coal-to-liquids Projected in service: 2014 Status: Permitting

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