Schuylkill County coal-to-liquid fuel project hinges on pending DOE decision

 

By Ralph Nardone

March 31, 2008

Northeast Pennsylvania may become the home the first waste-coal to liquid fuels plant in the United States within four years if all goes right. The plant will be located on a 75-acre site near Gilberton, Schuylkill County.

Coal magnate John Rich, president of Waste Management and Processors Inc., (WMPI) LLC, the company building the billion-dollar project says ironing out the financial details will take up to a year and construction another 30 months.

When finished the plant will produce what Rich insists fuel that is cleaner, has fewer greenhouse gasses, is safer, has no particulate when combusted and is significantly cheaper than the foreign, oil-based products it will be replacing.

One key component to the project start-up lies in the approval of a federal low-interest loan of $100 million under the U.S. Department of Energy (DOE) "clean coal power initiative" program, Rich says. Although only 10 percent of the total project, the federal support provides a necessary boost.

Rich says that the company is still in negotiations with DOE, despite its expressed support of this project since 2000. A decision should be made in the next few weeks, he adds.

"We need to produce fuels domestically - period," says Rich.

"We are trying to nail down costs but that's a moving target," he says. The financing procurement hinges on Rich's ability to lock in costs.

Environmentalists vociferously oppose this plan, according to PennEnvironment, a Philadelphia-based group. Rich accuses them of not having the best interest of the country or its citizens in mind.

Nathan Willcox, clean air advocate from PennEnvironment, says environmental groups across the state do not want to see the Gilberton or any "liquid coal" plants become operational.

"There are two main reasons for our opposition," he says. "According to federal Environmental Protection Agency (EPA) data, liquid coal produces twice as many life-cycle global-warming emissions as regular gasoline. And, its an incredibly expensive technology."

Willcox cites a report from the Cato Institute, a Washington, D.C. free-market think tank, which concluded using government money to support what Cato called a "boondoggle" only results in wasted funding better suited for "truly clean and renewable energy sources."

According to Cato, turning coal into gas would be a wonderful idea if only it could be done cost effectively.

Willcox also cited a report from the EPA that concluded liquid coal produces 118 percent more greenhouse gases than the fuel is displaces. It requires a significant amount of electricity for production as well.

PennEnvironment and a coalition of other environmental groups including the Sierra Club of Pennsylvania, Clean Air Council, Earthjustice Citizens for Pennsylvania's Future (Pennfuture) and others petitioned Gov. Rendell in June to remove liquid coal from his state energy independence strategy.

In a letter provided by Willcox, the coalition says running a hybrid car on liquid coal will be equivalent to running a large sport utility vehicle on regular gasoline. They feel the benefits of the technology are not viable.

Despite their efforts, Gov. Rendell, and U.S. Senators Arlen Specter and Bob Casey expressed their support according to the Philadelphia Inquirer in January. In fact, they are pulling together a group of government and private buyers for the product once it is produced.

The state supports using waste coal to produce liquid fuels because it will address some of the most pressing issues confronting Pennsylvania, according to Neil Weaver, press representative for the Pennsylvania Department of Environmental Protection (DEP).

Pennsylvania has the largest abandoned mine lands problem in the country, with more than 8,500 acres of refuse piles and 233.7 million tons of waste coal that impair rivers and streams with polluted runoff, he says. There are few good uses for waste coal except electricity generation and not enough resources to address this multi-billion-dollar problem. A successful waste coal-to-liquid-fuels industry could accelerate the cleanup of waste coal across the state.

Weaver concedes environmental concerns about carbon dioxide. He cites a study done in Ohio that concluded coal-to-liquid fuels can yield 46 percent less emissions of carbon dioxide than conventional low-sulfur diesel transportation fuels. These emission reductions are achieved using a 30 percent biomass co-feed, carbon capture and storage technology, and combined cycle, co-generation processes.

When open, Rich's plant will produce 60 million gallons of fuel a year, 41 megawatts of electricity and steam feeding on waste coal. It will employ 600 and bring 1000 jobs to Schuylkill County, Rich says.

One waste coal plant producing electricity in western Pennsylvania received accolades from the Pennsylvania Department of Environmental Protection (DEP) and residents for providing jobs and burning 1.7 million tons of anthracite coal waste that formerly polluted waterways and blighted real estate.