Cairo Association of Teachers - Newsletter

CAT Tracks for June 8, 2008

From the Southeast Missourian...

Alternative fuel plants won't be built in Southern Illinois

By Rudi Keller
Southeast Missourian

A year ago, Southern Illinois economic development leaders held a meeting where big plans for alternative fuel factories dominated the discussions and confident predictions about groundbreaking dates became the big news.

Not a single shovel-full has been turned, however, and the three projects that were making headlines, including a $3.4 billion coal gasification plant just north of Cairo, Ill., are all apparently dead.

The other two projects, a biodiesel plant at the Bunge Corp. soybean facility in Cairo and an ethanol plant in Pulaski County, were the victims of high commodity prices and tight credit, said Donna Raynalds, director of the Southernmost Illinois Delta Empowerment Zone, or SIDEZ.

SIDEZ works to bring jobs and businesses to a region of Illinois that regularly records some of the worst unemployment and highest poverty rates in the state. Cairo especially had hoped the new plants would stop a decades-long decline in population and business activity.

"It is very disappointing," Raynalds said of projects that at one time promised more than 1,000 construction jobs and hundreds of permanent jobs. "If it happens enough times, people are reluctant to hope, reluctant to believe."

Clean Coal Power Resources Inc. of Louisville, Ky., secured options on hundreds of acres straddling the southern tip of Illinois for the coal to liquid fuel plant. The Cairo Regional Airport, a small field serving private planes, sat in the middle of the project. While the airport board was willing to sell, the Federal Aviation Administration blocked the project with demands that an alternative airport site be secured and operational before the Cairo airport could be closed, said Bill Capie, who acted as a spokesman for Clean Coal Power before the company scuttled its Illinois plans.

The company hasn't abandoned its plans, but moved them to Kentucky, he said.

The airport requirement was a deal-killer, Capie said. The state of Illinois was helping find locations for the airport, but the organizers couldn't tolerate the loss of time.

"You are talking who-knows-how-long that would have been," Capie said. "By the time you go through all the environmental impact studies and get the land, it may have been years. It was time to move on."

The Paducah, Ky., Sun reported last week that Clean Coal Power has applied to the Kentucky Economic Development Cabinet for financial incentives for an "undisclosed project" in McCracken County, Ky.

When Clean Coal Power withdrew from Illinois, Capie severed his ties with the company, he said. But he noted that the project never received much support from state development officials.

"It is going to go," he said. "What is amazing to me, in the short time I worked for them, was the way Kentucky embraced the project. It was incredible."

At the June 11, 2007, SIDEZ meeting in Ullin, Ill., discussions weren't about whether the projects would be built, but when. Cairo city officials set up a tax increment financing district to aid the development of the biodiesel plant at the Bunge location. Developers of the Pulaski County ethanol plant said they were "inching closer" to finalizing their project.

The credit crunch that started with rising home foreclosures has spread to business capital markets. "It is hard to bring a big project to fruition now," Raynalds said. "These are not easily done projects."

One continuing ray of hope for Cairo is a multimodal transportation plan being developed from a consultant's report. Cairo has good river access, rail lines and Interstate 57, and the plan will look at the feasibility of making the city a transhipment point for container traffic.

"The report shows promise and we are working on establishing a business case for shipping 20,000 20-foot equivalent units," Raynalds said. "We are working very hard on that."