Thursday, February 13, 2003

Coal-to-oil plan endorsed by Bush

Federal agency tours Gilberton project

GILBERTON - It's a project that even the president endorses.

With the United States not wanting to depend on foreign oil anymore, officials from the U.S. Department of Energy came to Schuylkill County Wednesday to support innovators like John W. Rich Jr.

Carl Michael Smith, the U.S. Department of Energy assistant secretary for fossil energy, visited the co-generation plant to personally congratulate Rich, who was awarded a $100 million DOE grant in January to jump start his plans to build a $612 million coal-to-oil plant here.

"This particular project is outstanding," Smith said. "This will be a state-of-the-art project to produce diesel from waste coals essentially."

"It's certainly part of the road map that we're looking to get to, the hydrogen society that President Bush announced during his State of the Union message," Smith said.

The president said he hopes "America can lead the world in developing clean, hydrogen-powered automobiles."

"This plant is part of that," Smith said.

Rich was taken aback by the statement.

"I was just thinking about what you were saying about the hydrogen economy," Rich said to Smith. "The first step in this process is basically to produce from the coal waste hydrogen and carbon monoxide. But I'm thinking whoever would have thought it would come to that."

Rich said, "It just goes to show that when you work on something, it can evolve into things you never expected."

"The technology just keeps leading you," Smith said. "It's how we will solve our energy problems in this country and solve our environmental problems, through actual real world technology."

Smith, an Oklahoma native, serves as the primary policy adviser to the secretary of energy's federal coal, petroleum and natural gas programs. He has served in the post since Feb. 5, 2002.

He is responsible for several high-priority presidential initiatives, including the implementation of the Bush Administration's $2 billion initiative to develop a new generation of environmentally sound clean coal technologies.

Smith's visit started with a mobile tour of the winding culm-dirt roads between Rich's co-generation plant just off the Morea Road and his borough business office.

A press conference followed with Smith bringing everyone up to date on the good news that has blessed Rich's operation.

In early 2002, the federal government offered $330 million in grants to American industries looking to develop coal-to-oil technology via the DOE's Clean Coal Power Initiative grant program.

This is part of the Bush Administration's $2 billion clean coal initiative, Smith added.

There were 36 applicants who applied by the August deadline.

"When you have 36 projects competing, that's an awful lot of competition," Smith said. "The selection process went through the fall and into January."

Only eight were given awards in January. One was Rich's coal-to-oil project, which was awarded $100 million.

"It's a $100 million commitment by the federal government. And the math is easy. It's about one-third of the funds in the first solicitation," he said.

Rich is president of Waste Management and Processors Inc. and Reading Anthracite Co., Pottsville.

He's been planning to build this plant, the first of its kind in the United States, for at least 10 years.

What it will do is take coal waste and turn it into a zero-sulfur liquid called "syn gas."

The gas will then be sold and used to make diesel and jet fuel, Rich said. Rich said as he held up a tiny clear glass bottled filled with the product.

"This sample was made in a lab in Pittsburgh," Rich said.

He's currently in the process of trying to find investors to finance the rest of the $612 million project.

But he's already given himself a construction timetable.

"I'm hoping to break ground a year from now," Rich said.

He's aiming to have it built and fully operational in 72 months.

Rich intends to build it east of his Gilberton operation, but said Wednesday he still hasn't decided on an exact location.

Rich was asked a number of questions, including whether the coal-to-oil process will have a bi-product, the way Rich's co-generation plant produces red fly ash.

He said yes, that the plant will produce an aggregate, which can be used as an anti-skid material on roads in winter.