Gov. Pat Quinn used his veto pen Friday to scotch a coal gasification plant on the Southeast Side of Chicago. Environmental advocates hailed the move, but also warned that New York City-based Leucadia National Corporation would return to Springfield with a revised proposal.

And that may be the case. But energy companies have not yet figured out how to make 'clean coal' or 'coal to gas' projects both economically and environmentally appealing to Quinn and state lawmakers.

After all, Quinn’s veto follows a long proposed Taylorville coal gasification plant run by Nebraska-based Tenaska, Inc. stalling in the General Assembly this May.

And energy companies are back to the drawing board on FutureGen, the once ballyhooed “clean coal” plant for Mattoon.

The Leucadia project would have transported coal and petroleum from downstate to Chicago. The Chicago facility would then convert these polluting materials into a synthetic natural gas.

As Progress Illinois examined last month, the project could mean thousands of temporary construction jobs and 200 permanent positions within the plant. The slated cost was $3 billion paid out over 30 years with ratepayers from Nicor Gas and Ameren Illinois footing 95 percent of the bill.

In terms of environmental stewardship, Leucadia was to capture 85 percent of the carbon in underground pipelines. But environmentalists warned that there was not a clear carbon sequestration plan and that the remaining 15 percent released into the air would cause significant pollution.

In a PI op-ed yesterday applauding the veto, Jack Darin, director of the Sierra Club’s Illinois Chapter, wrote that, “The proposal has come under fire from community residents concerned about the millions of pounds of air pollution Leucadia could add to Illinois air.”

One such resident is Peggy Salazar, director of the Southeast Environmental Task Force in Chicago. Salazar says that her group is “extremely grateful that [Quinn] at least bought us some time.” But Salazar anticipates a fresh fight,  noting that Quinn told the General Assembly to “give me a better bill.”

The gubernatorial veto statement was, in fact, about a lack of consumer, not environmental, protections. For example, Quinn did not like that only two utility companies were bearing the costs of the project.

Quinn’s concerns are similar to those of the Chicago-based Citizens Utility Board. “We are not universally opposed to the project,” says David Kolata, executive director of the watchdog group. “The ball is clearly in Leucadia’s court.”

Kolata added that “a lot of complicated policy issues need to be thought through.”

Indeed, many economic and environmental policy issues have not been successfully thought through – and may not be anytime soon. In theory “clean coal” or “coal gasification” could be an environmentally responsible way to make use of a prime Illinois resource.

But the energy companies behind these Illinois projects have so far not figured out how to do this. So like Tenaska and FutureGen, both expenses and environmental worries stymied Leucadia.

“I do think that there is a commonality that the market does not favor these kinds of projects,” says Rebecca Stanfield, a program director at the Natural Resources Defense Council Midwest Office. Stanfield hopes that statehouse leaders will now take a closer look at renewable energy sources such as wind and solar power.

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