Rich's plant given boost
Coal-to-oil may get cash for Senate

The Pottsville (PA.) Republican & Evening Herald
Friday May 19, 2000

     Pennsylvania's junior senator has officially introduced a proposal that would provide a much-needed boost to a proposed coal-to-oil plant in West Mahanoy Township.
     "It gives the Secretary (of Energy) a lot more flexibility to support these kinds of projects," Sen. Rick Santorum, R-Pa., said late Thursday afternoon from his Washington, D.C., office.
     Santorum's measure -- five lines in a 71-page bill -- authorizes the secretary of energy to provide grants for development of technologies for converting coal to liquid fuels, specifically for design and construction of an indirect liquefaction plant.
     That is exactly what John W. Rich, Jr., the president of Waste Management Processors, Inc., wants to do in West Mahanoy.
     The plant, which is slated to go on a 30-acre site just east of Gilberton Power Co.'s John B. Rich Generating Station, the Rich family's co-generation plant on Morea Road in West Mahanoy Township, would also need the $46.8 million in tax incentives that was passed by the Pennsylvania General Assembly and signed by Gov. Tom Ridge in May 1999.
     "I'm more than optimistic, I'm confident it will pass this year," Rich said of the proposal.
     Rich has assembled a combination of companies including Sasol Ltd., the South African oil behemoth; Bechtel, the international construction giant; Texaco and his own company to take advantage of such a bill.
     Rich said that he hopes the bill would give his company about 28 percent of the estimated $312 million capital cost of the plant -- about $87 million for design and construction costs over four years.
     U.S. Rep. T. Timothy Holden, D-6, who helped get $7.8 million in cost sharing funds approved last August from the Department of Energy which would help fund three of the six phases of the project, also backs Santorum's proposal.
     "I applaud the senator," he said. "There are no partisan differences when it comes to the good of Schuylkill County or the good of the Commonwealth of Pennsylvania."
     Holden, Saint Clair, noted he is still working with the department, which is headed by former New Mexico congressman William B. Richardson, to see if there can be further investment but that has to wait until the first agreement is signed by all of the lawyers.
     Santorum said it also has to go through the appropriations process to get the money authorized.
     Rich was very enthusiastic that the bill which is on the fast track in the Senate and can go directly to the Senate floor and doesn't have to go to a subcommittee can pass this year before this session of Congress ends.
    He said that the banks and the private sector would put up the other $150 million, although a final deal cannot be arranged until the federal government makes its commitment.
     Rich added that if the companies had to borrow the whole $312 million to build the plant "our mortgage payments would be so high that our cost per finished gallon is going to be outside of the market" making it impossible.

News Articles