Politicians battle for energy funding

 

by STEPHEN J. PYTAK
STAFF WRITER

02/09/2007

GILBERTON — The governor and members of Congress are calling on President Bush to restore the $100 million low-interest loan to WMPI Pty LLC for the coal-to-oil project slated for Mahanoy Township.

“The president, in his State of the Union address, promised to promote clean coal technologies and lead the charge for cutting America’s reliance on oil,” Gov. Ed Rendell said Wednesday, “but his new budget instead cuts funding for a very promising solution to our energy needs.”

John W. Rich Jr., president of WMPI Pty LLC, has been working on the $800 million coal project for 13 years. A coal-gasifier would turn anthracite culm waste to a zero-sulfur diesel fuel.

When the president revealed his proposed budget Monday, a $100 million low-interest loan through the U.S. Department of Energy’s Clean Coal Power Initiative wasn’t part of it.

“I am aware that the recipient of this award has been working diligently for some time to address and resolve complex issues necessary to conclude a cooperative agreement,” Sen. Robert P. Casey Jr., D-Pa., said Thursday.

Despite that, Casey said, Rich was given no “fair warning” the keystone of his funding plan would be stripped away by the U.S. Department of Energy or the U.S. Office of Management and Budget.

“This was right out of the pure blue,” Rich said Thursday night.

“As a long-term advocate of this project,” Sen. Arlen Specter, R-Pa., said Thursday, “I am disappointed and disturbed that I was not notified of this possible course of action before it was announced in a formal administration budget submission.”

Rendell sent a letter to President Bush, Rendell’s press secretary, Kate Philips, Harrisburg, said Thursday.

Both Casey and Specter sent letters to Secretary of Energy Samuel W. Bodman and Robert J. Portman, director of the Office of Management and Budget, requesting they reconsider reinstating funding for the nation’s first coal-to-diesel project.

On Tuesday, U.S. Rep. T. Timothy Holden, D-17, indicated he also intended to approach the administration on the matter. He could not be reached for comment Thursday.

Rich said he’s had trouble sleeping since he heard about Bush’s proposed budget.

“It was practically the endorsement of the DOE,” Rich said Thursday.

Without it, Rich only had two other government incentives backing his project: $47 million in tax credits the state offered him in 1999 and a $7.7 million competitive cost-share investment from the U.S. Department of Energy Rich won in 2000.

“Them making this suggestion concerns potential investors and we have negotiations that are underway that are in jeopardy because of it,” he said. “And all these delays mean that the costs continue to go up because of the pressure the Chinese are putting on the market. They’re not holding back.”

When he received a copy of Specter’s letter Thursday, Rich said it gave him hope. He stuffed it in his pocket and carried it around the rest of day.

The legislators will have opportunities to recommend changes to the president’s proposed budget before it’s given final approval Oct. 1.

“Our delegation has jumped on this,” Rich said, “and it’s phenomenal how passionate they are about defending our position.”