Thursday, February 28, 2003

$100M boosts coal use

Liquefaction plan wins over critics

GILBERTON - The endorsements for John W. Rich Jr.'s $612 million coal-to-oil project keep coming. First, Rich got a $100 million grant from the federal government. Then, he received kudos from the U.S. Department of Energy on a recent visit to the Gilberton site. And now the project is getting the thumbs up from a few critics.

Among them is Harold H. Schobert, director of the coal utilization laboratory at Penn State University, State College.

"I would say that a year ago or a year and a half ago when John was talking about this project and trying to raise support, there was a certain amount of skepticism. That skepticism is now gone," Schobert said.

"I thought it was remarkably well thought out. We really want to see him pull this off," Schobert added.

Gilberton Mayor Mary Lou Hannon said she supported the project from the start. "With the crisis today, with the oil and things like that, we can't wait and sit back any longer, " she said. "It's a shame what's going on in the world. I'm disappointed that it took this many years to get this moving."

She thinks it's a good idea for a few reasons.

"We're going to be able to produce something that we don't have to rely on another country for," Hannon said. "If I could buy everything in America, I would. I think that's how most people in America feel today with what's going on in the world today," she said.

Also, this means jobs, she said.

It's expected to create 1,000 construction jobs and about 150 jobs inside the finished plant.

"And you're going to have high-paying jobs because they're going to be high-tech jobs," Hannon. "College graduates are going to be looking for something like that. It's going to be a win-win situation."

Still skeptical about Rich's coal-to-oil plant, however, is Regina Kurtz, a West Mahanoy Township supervisor.

She said she's not opposed to the project, even though in early 2001 she voted against giving Rich a Keystone Opportunity Zone (KOZ) which would have given him a tax-free incentive to build his plant.

"It's not the project that we voted against, " Kurtz said. "It wasn't about the fact that he couldn't build his plant there. The fact was we wanted the tax money. That's what my vote was for, against the free tax," she said.

She still has a few questions about the coal-to-oil process too.

"We'd like to know what effect it's going to have on the environment," she said. Kurtz wants to know how much water it's going to take to run the plant.

"I want to know where the water's going to come from," she said. "He has the right to build it and he's certainly got the government to support him on that. I'm only concerned about the environmental affect it's going to have," Kurtz said.

If Rich wants to build in West Mahanoy, Kurtz is certain he will be able to answer all her questions when he comes for a building permit.

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

He's been planning to build a coal-to-oil plant, the first in the United States, for the past decade.

Rich had studied the technology for years.

In particular, he did research at a coal-to-oil plant in South Africa called Sasol Technologies Inc.

The plant will cost him about $612 million to build.

He intends to build it east of his Gilberton operation, but hasn't decided on an exact location.

What the plant will do is use coal waste and turn it into "syn gas."

"What it is basically is a mixture of carbon monoxide and hydrogen," Schobert said.

"That mixture, although it has different proportions of the two compounds, is typically called synthesis gas or sometimes even just syn gas."

That "syn gas" will then be sold on contract and used to make diesel and jet fuel.

"The technology is remarkably old," Schobert said. "It's never really been utilized on a commercial scale to my knowledge in the United States."

In the late 1920s, the Germans used that mixture of carbon monoxide and hydrogen and produced liquid fuels from it.

There are a few good reasons why the federal government is giving Rich support now, Schobert said.

"It's nice to have other sources of liquid fuels," he said, especially now with the crisis in the Middle East.

"That's a major source of oil both for the United States and other parts of the world and even though we get a lot of oil out of South America, there's a major uncertainty in the international oil market," Schobert said.

He and a group from Penn State University were given insight into the plan when they visited Rich's Gilberton operation in January 2002.

"We came away rather impressed with the project," Schobert said.

But it's easy to be skeptical at first, he added

"If you were starting with a clean sheet of paper and could locate a plant anywhere in the United States, you probably would not choose anthracite as the coal to use for this project. It's not as reactive as other kinds of coals," Schobert said.

"So the intermediate step, the making of a gas that is eventually converted into the clean liquid, is easier with certain other kinds of coal, he said.

"However, if you temper that comment with the fact that in essence what they have there is an enormous supply of essentially free anthracite because it's this culm, that suddenly changes the equation. That changes the whole ball game," he said.

The use of the anthracite culm as the feedstock will also aid in the reclamation of the area. "Those big piles will eventually vanish," he added.