Tuesday, January 14, 2003

Coal-to-fuel initiative gets $100 million grant

A Schuylkill County company could soon lead the way to energy independence for the United States.

Waste Management and Processors Inc. has received a $100 million federal grant to build a plant to develop a new diesel fuel from coal waste.

This technology has yet to be employed in the United States, according to U.S. Sens. Arlen Specter and Rick Santorum, both R-Pa., who announced the grant.

"The $100 million grant is a win for energy independence, a win for the environment and most importantly, a win for Pennsylvania, by helping to fuel the Schuylkill County economy," Santorum said Monday.

Santorum notified John W. Rich Jr., president of Waste Management and Processors Inc. and Reading Anthracite Co., Pottsville, on Monday afternoon of the grant. Rich was thrilled by the news, which culminated 10 years of work.

"We haven't picked the final site yet," he said. "It will be located to the east of the Gilberton Power Co.," in either Mahanoy or West Mahanoy Township.

The project will create at least 1,000 construction jobs and about 150 permanent jobs in the plant, Rich said. "Finalizing the financing" is the project's next phase, he said.

"We have three major institutions in New York that are interested, so we're going to negotiate with that, select one and then work toward closing the financing by the end of the year," he said.

The project will also receive $47 million from the state, said state Rep. Bob Allen, R-125.

"Back in May, the local delegation worked on legislation to have a tax incentive package put in for projects just like this," Allen said this morning.

Waste Management's plant would be the first to commercialize this coal-to-liquid fuel technology and would use it to produce about 60 million gallons of domestic transportation fuel a year.

It will cost approximately $612 million to build the plant, Santorum reported.

"Oh my gosh," said Regina J. Kurtz, chairwoman of the West Mahanoy Township supervisors, when she was reached this morning and given the news.

Kurtz has opposed the project in the past. In early 2001, she voted to reject three of four Keystone Opportunity Expansion Zones (KOEZ) proposed in the township, which would have given tax-free incentives for Rich to build his plant. Kurtz had no further comment about the grant when contacted this morning.

However, Allen had nothing but praise for the project.

"It's the most dynamic impact for Schuylkill County as far as revitalizing this county in the last 50 years," Allen said. "I commend the Bush Administration, Senator Specter and Senator Santorum for their hard work in realizing that this is both an environmental and economic package that will strengthen our economy here in eastern Pennsylvania."

So did U.S. Rep. T. Timothy Holden, D-17.

"This is a project that a lot of people have been working a long time on. It will be a tremendous shot in the arm for our local economy and to our region," the congressman from Saint Clair said this morning. "We have more recoverable coal in our country that the rest of the world has in recoverable oil and we need to take advantage of our own natural resources."

This plant could take two years to build, and it will reportedly turn about 3,400 tons of anthracite waste a day into more than 5,000 barrels a day of zero-sulfur diesel fuel.

This plant could help free the United States from dependence on foreign oil and create temporary construction jobs as well as permanent jobs in the county, Rich said.

"The plant will generate a lot of activity, visitors and interest. There will be a lot of positive economic benefits going in every direction, not to mention jobs."

The technology Waste Management will develop, called Fischer-Tropsch, will provide cleaner-burning sulfur-free transportation fuels, such as jet and diesel fuel.

"The partnership established with Waste Management will create a cleaner environment by converting coal waste into zero-sulfur liquid transportation fuels, which will reduce air pollution," Santorum said.

The technology will reduce the nation's dependence on foreign oil.

"This plant will mean that dollars are kept here in the county, not going overseas," Rich said.

"This could be the opening for the United States becoming independent of OPEC oil," Specter said. "Pennsylvania has a tremendous amount of coal sludge and a tremendous amount of coal."

It also will benefit the environment by reducing air pollution and coal waste, Santorum said.

"Waste Management, through the use of coal waste, will eliminate millions of tons of coal mine refuse which is a major source of water contamination," he added.

The next step in the process will be the formal negotiation of the cooperative agreement between Waste Management and the U.S. Department of Energy.