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Leucadia National Corporation Message Board

  • hollyaben hollyaben Aug 13, 2012 12:22 PM Flag

    LUK Coal to gas plant

    LUK lost again. This scheme was vetoed again today by the governor of Illinois.

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    • Thanks for the update. Lots of headlines if you plug "coal to gas" into google news.

      The Chicago Tribune article quotes a LUK press release as follows:

      Leucadia released a statement late Friday suggesting it would move on from its plans in Illinois.

      "While we find the governor's decision unfortunate, we look forward to continuing our work at our other facilities throughout the country," Leucadia said.

      Several observations:

      - As a taxpayer and utility ratepayer, I have to cheer one baby step towards fiscal sanity. We can't afford to subsidize coal-mining jobs or the handful of other jobs that result from this type of political boondoggle.

      - Illinois politicians have traditionally supported any number of fantastic political boondoggles, so long as they could link the boondoggle to "union jobs" (e.g., mining). So the result is pretty surprising.

      - The LUK management team has shifted its development focus from natural resources (Cobre Las Cruces, Fortescue) to U.S. political boondoggles. When you link your fate to politicians and regulators, you are prone to get whipsawed by the shifting political winds.

      - I hope that LUK management can get out of the political business in the next few years. LUK has underperformed over the past five years as it dumped money into these political boondoggle black holes. Given our federal and state budget deficits, the timing couldn't be worse. Governments don't have the money for anything, and utility regulators are aggressively discouraging anything "new" that will translate into higher costs for ratepayers.

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