Illinois Governor Announces Plan to Produce 50% of Energy In-State

August 24, 2006

Illinois Governor Rod Blagojevich announced a broad energy plan to produce 50% of the state's energy consumption in-state by 2017. The plan calls for:

  • Investing $775 million to build 10 coal gasification plants to produce electric power. In addition, Blagojevich wants to build a pipeline from the new plants to coal mines and oil wells in southeastern Illinois to bury carbon dioxide emission underground.
  • Providing financial incentives to build as many as 20 new ethanol production facilities. In the near term, Blagojevich announced creation of a task force to encourage production in the biofuels industry.
  • Increasing the coverage of gas stations providing E85 — a blend of 85% ethanol with 15% conventional gasoline — to 100% station participation in 2017. The governor noted that today about two percent of the cars in Colorado are flexible fuel vehicles that can run on a combination of ethanol and gasoline. He said the state now has 130 stations that provide E85, up from 14 stations in 2003. In the near term, Blagojevich announced a project to encourage automakers to provide more flexible fuel vehicles to Illinois that can run on E85, gasoline, or a combination of the fuels.
  • Supplying 10% of the state's electricity from renewable energy resources in 2015.
  • Reducing motor fuel consumption by 10% in 2017. In the near term, Blagojevich announced creation of the Illinois Fuel Conservation Task Force to explore strategies for accomplishing this goal.
  • Adopting a building energy code for homes that would increase energy efficiency.

Blagojevich estimates the plan will cost the state $27 million per year from its budget for a total capital investment from all sources of $1.2 billion. He proposes collecting business revenues more promptly to pay for the plan. The Illinois Department of Revenue estimates that businesses currently owe more than $35 million in sales and corporate taxes. To collect the revenues more quickly, the governor said the revenue department will hire 150 additional auditors.

The governor said, "The plan is different from anything we have done before." The governor noted that currently the state produces only seven percent of the crude oil and one percent of the natural gas produced in the state. Aids said that parts of the plan would require approval from the Illinois Legislature. See the governor's August 22 press release.

The week before, Blagojevich announced more than $25 million Opportunity Returns grants to build five ethanol and biodiesel production facilities in central Illinois. The facilities will produce about 225 million gallons of biodiesel per year and will require private investment of $334 million. One of the facilities will be built by Central Illinois Energy in Fulton County and will combine an ethanol production facility with a coal-fired combined heat and power (CHP) system. It is an innovative idea, given that most CHP facilities operate on natural gas. The West Central Illinois Building Trades union leads a consortium of labor organizations that will work on the project and have invested union funds in building it.

For more information, see the governor's August 15 press release.