Eastman Chemical Company announced that it has decided to discontinue its Beaumont, Texas, industrial gasification project.

According to the Eastman press release this decision was made due to a number of factors, including high capital costs, the current and foreseen reduced spread between natural gas and oil and petroleum coke prices, and continued uncertainty regarding U.S. energy and environmental public policy. As a result of this decision, the company will recognize a pre-tax non-cash asset impairment charge estimated to be between $150 million-$180 million in the fourth quarter 2009.

The DOE had announced it would begin an Environmental Impact Study (EIS). This was widely considered to be an indication that the DOE had selected Eastman’s TXE gasification project for an offer for a loan guarantee.