Riverview Energy plans $2.5B Indiana coal-to-diesel plant

Dive Brief:

Riverview Energy Corp. has filed a construction permit request for a $2.5 billion coal-to-diesel plant the company plans to build in Spencer County, Indiana, according to the Associated Press.
The company proposes to use local coal reserves to produce 4.8 million barrels of clean diesel each year, as well as 2.5 million barrels of naphtha, which is used in the production of cleaners, solvents, fuel, plastics and petrochemicals. When the plant goes into operation, it will be the first of its kind in the United States, according to the Spencer County Journal-Democrat, and will not send coal ash or any other hazardous material into the environment.
The project is expected to generate more than 2,000 temporary construction jobs and 225 permanent positions once the plant is complete. In addition to possessing the type of coal needed and its proximity to transportation routes, Riverview officials said it chose Indiana for the new facility because it is a "pro-business, pro-jobs and pro-development state."

Dive Insight:

To earn its pro-business reputation, Indiana has done away with the prevailing wage requirement on public projects, enacted right-to-work laws, and, according to the Associated Builders and Contractors' latest Merit Shop Scorecard, allows public-private partnerships and has a strong career and technical education environment.

But a report from the Midwest Economic Policy Institute last month threw a bit of cold water on the Indiana's pro-business policies, at least as it concerns a prevailing wage. In the run-up to the law's repeal in 2015, proponents claimed that the state could save 10% to 20% on public works projects if was not saddled with a prevailing wage; however, the institute said construction cost savings for Indiana taxpayers have yet to materialize.

In addition, the institute reported that wages for blue-collar workers have dropped 8.5% and that productivity has fallen by 5.3% and the rate of job growth is down 1.5%.

ABC gave Indiana a "C" in the category of project labor agreements (PLAs) because, according to the association, although Indiana does not have a state policy regarding them, local governments sometimes mandate them.

PLAs are collective bargaining agreements that set wages, benefits, working conditions and other labor-related conditions for a construction job. The agreements are usually between owners and local trade unions, but they don't typically exclude non-union labor from participating. However, everyone working on the project must abide by the rules outlined in the PLA.

Last month, the ABC and other construction industry groups sent a letter to President Trump requesting that he rescind an Obama-era executive order that supports the use of PLAs on federally funded or federally assisted projects of $25 million or more. The ABC and the other signatories argued in the letter that PLAs discourage competition and do not work well in the current labor shortage environment.