Rich project receives boost

 

by Peter Bortner
08/03/2005

 

A pioneering Schuylkill County project that would help reduce American dependence on foreign oil and create about 1,600 jobs has moved another step closer to reality.

Waste Management and Processors Inc., Gilberton, will be allowed, under language approved by the U.S. Senate in its energy bill, to use a $100 million federal grant to secure loan guarantees for its planned coal-to-oil plant in Mahanoy and West Mahanoy townships.

"My reaction is that it's great for the area and the county," John W. Rich Jr., president of WMPI, said Tuesday.

Rich wants to build the plant next to Gilberton Power Co., his cogeneration plant. It would convert anthracite coal waste, also known as culm, into syngas, a clear zero-sulfur liquid.

"It's the first to burn coal to clean fuel," he said. "We're talking about making coal into liquids."

With the federal guarantee, Rich is "100 percent optimistic" about getting the financing to build the plant, which he has been planning for more than a decade and has an estimated price tag of as much as $612 million.

"There are about a dozen banks interested," he said. "This is something all the banks would be interested in. It's the government saying to the banks, 'don't worry about this loan.'"

Rich had said earlier this year that financing was the major obstacle standing in the way of the plant, which will use gasifiers for the conversion process.

"Now, we're talking about the spring of next year" for groundbreaking, with completion in another 30 months, Rich said about the plant.

The Pennsylvania Department of Environmental Protection gave its approval in March for an air permit for the project.

Rich also said his projection of 1,600 new jobs was a conservative estimate. Of those jobs, 150 would be in the plant; 450 derivative ones in services needed due to the plant being there and 1,000 in construction work, according to Rich.

The money already has been approved by the U.S. Department of Energy as a Clean Coal Power Initiative grant, according to U.S. Sens. Arlen Specter and Rick Santorum, both R-Pa. Rich praised both senators for their help in getting the guarantee provision into the bill.

"Senator Santorum and Senator Specter listened to what we had to say," and then worked to get the guarantee in the bill, Rich said.

"I am pleased my colleagues in Congress have provided this provision to develop the first coal-to-liquid fuel program in the United States," Specter said. "This technology has the potential to dramatically reduce our nation's dependence on foreign oil."

Rich said he already has markets for the fuel.

Pennsylvania would use 15 million gallons of the oil as diesel fuel, he said. Also, the U.S. Department of Defense is interested in using some of the oil as aviation fuel, Rich said. Additionally, naphtha produced at the plant could be used by local refiners as a blend sock, a type of low-octane gas, according to Rich.

"This provision will greatly assist our national security by improving our domestic energy supply. I am pleased this technology has the added benefit of producing environmentally friendly, ultraclean, zero-sulfur diesel fuel from waste coal," Santorum said. "This project will be beneficial to the economy of Northeastern Pennsylvania, as well as create new jobs for the region."

While the technology has been used in Germany and South Africa, Rich's plant would be the first in the United States. It should enable the country to reduce its dependency on foreign energy sources, helping the nation in several ways, Rich said.

"We're investing in domestic infrastructure. That's what it's investing in, quality jobs," he said. "They're dollars that otherwise would go overseas."