Tentative groundbreaking set for two of three energy projects

Ullin, Ill. -- Of three major energy projects proposed in Southern Illinois, the first to be announced was a 100-million gallon ethanol plant in Pulaski County.

But when civic and economic development leaders met Monday to hear an update of plans for major projects in the region, the ethanol plant was the only one discussed that didn't have a projected groundbreaking date. Two diesel plants -- a biodiesel facility in Cairo and a coal gasification plant just north of the city -- both gave tentative dates for the start of construction to the annual meeting of the Southernmost Illinois Delta Empowerment Zone, or SIDEZ.

"We do this meeting once a year," said Donna Raynalds, executive director of the three-county empowerment zone. "This year there are so many large projects that are looking at the area that people don't know about. We wanted to notify the communities that, hey, we need to get organized and ready for change."

The biggest proposed project is the 2,000-acre, 50,000 barrels a day coal-to-diesel plant being pushed by Clean Coal Power Resources of Louisville, Ky. The $3.4 billion plant has lined up investment banking funds and a customer who has promised to buy all the diesel it can make for 20 years, said Bill Capie, a former administrator at Southern Illinois University who has become the public spokesman for the project. He showed a timeline for meeting regulatory and other hurdles that included a projected March 2008 groundbreaking.

If the plant is built, it will provide 1,000 construction jobs for two years and 750 permanent jobs, Capie said.

To be feasible, he said, the project must have the support of local governments, state government and the federal government to provide the incentives that will help offset some of the massive private investment. A recent air pollution permit for construction of a plant near Taylorville, Ill., that will use some of the same technology is a good sign, Capie said.

But one major stumbling block to the proposed plant is what to do about the Cairo Regional Airport, which sits in the middle of the proposed plant site. The Federal Aviation Administration and the Illinois Department of Transportation are unwilling to approve closing the airport, he said.

While the developers are willing to help relocate the airport, he said, the plant can't be built if the airport stays in place.

"It is not possible to do this around the airport," he said. "The airport is a drop-dead issue."

The two other major energy projects are:

• The Renewable Energy Group project for a 100-million gallon a year biodiesel plant near the Bunge Corp. facility in Cairo. Mike Eickhoff of Duff and Phelps Financial Consultants of Chicago said he expects construction to begin in the fall of this year.
• The MOR Energy project in Pulaski County. The plant, also 100 million gallons a year, would produce ethanol. Kevin Ulrich, representing the developers, didn't give a date for construction but said "every day we are inching closer."

The Renewable Energy Group project will use tax increment financing, or TIF, to help pay for the infrastructure needed to support the plant. The details are still being worked out, said Cairo Councilwoman Linda Jackson, who attended the Monday meeting.

The Cairo City Council will decide tonight on how to proceed with gathering public comment on the proposed TIF district, Jackson said. And the council will also be choosing a consultant to study the feasibility of a "transloading" facility to move freight between barges, trains and trucks at Cairo.

Jackson said the two energy projects have strong backing among council members. "I want to commend them for their efforts," she said. The council will support "whatever benefits the businesses."

And Alexander County commissioners are backing the proposed plants as well. Commission Chairman Mike Caldwell and Commissioner Angela Greenwell attended the meeting and said they believe both projects are strongly backed and seem far more likely to become reality than they seemed a year ago.

"It is phenomenal to think we are the chosen ones," Greenwell said.

Johnson County Commissioner Ernie Henshaw, president of the SIDEZ board of directors, said the projects have the potential to transform the region, long mired in decline and poverty. "For the first time in many years, people are feeling a sense of hope," he said.

rkeller@semissourian.com

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