Schuylkill fuel plant loan restored

$100 million to come after all, area lawmakers announce.

 

By Josh Drobnyk Call Washington Bureau

02/17/2007

The Bush administration reversed course Friday on its proposal to cancel a $100 million loan to help build a Schuylkill County plant that would convert coal waste into clean-burning diesel fuel, area lawmakers announced.

The decision came 11 days after the Energy Department made clear its intention to rescind the low-interest loan through the president's 2008 budget proposal. The loan had been promised to Waste Management and Processors Inc. four years ago and is critical to the $800 million project.

''Talk about having faith in the system,'' John Rich Jr., president of Waste Management and Processors, said Friday afternoon, referring to the intense opposition among area lawmakers of the loan's cancellation. ''I think something was overlooked or something.''

Sens. Arlen Specter, R-Pa., and Bob Casey Jr, D-Pa., and Rep. Tim Holden, D-17th District, have spent the past week and a half pressuring the administration to change its mind. Specter said in a statement that Office of Management and Budget Director Robert Portman notified him of the decision to restore the loan Friday morning.

The loan originally was awarded in late 2002 under the Energy Department's Clean Coal Power Initiative.

A department spokesman did not return calls for comment. An OMB spokesman could not be reached. Last week, Energy Department spokesman John Grasser said the department wanted to move the money into a pot for a new round of applicants seeking alternative fuel technologies. He said the department's four-year negotiation to finalize terms of the loan with Waste Management and Processors — which couldn't be finalized until all other funding had been secured — had run its course.

A statement from Specter, Casey and Holden said the company will have until the end of the year to secure the rest of the funding for the plant, a requirement Rich said he was confident the company would meet.

The plant, to be located on 75 acres near Gilberton, between Mahanoy City and Frackville, has been expected to give a massive economic boost to rural Schuylkill. Rich said the project would create 1,000 construction jobs and more than 660 on- and off-site jobs once it is finished.

The project, in the works for decades, would import a technology from South Africa that converts anthracite waste into zero-sulfur diesel fuel. The plant is expected to produce 5,000 barrels of diesel fuel a day.

Supporters have hailed the project as the dawn of a new domestic industry that would help reduce American dependence on foreign oil while cleaning up millions of tons of coal waste that has contaminated water supplies and rendered land unusable in Pennsylvania and other coal-rich states.

Schuylkill County has about 5 billion tons of anthracite.