Coal-to-oil gets final approval

 

BY BEN WOLFGANG
STAFF WRITER
Republican Herald

11/02/2007

What has become a $1 billion coal-to-oil project in Gilberton took another step forward after the U.S. Department of Energy released an Environmental Impact Statement this week.

The 876-page report green-lighted the proposed plant, which would use a gasifier to convert coal waste into synthetic gas. The synthetic gas could be used to produce liquid fuels. The report also says that if successful, the coal-to-oil plant “may help to reduce U.S. dependence on imported oil.”

Being developed by Waste Management and Processors Inc., the project would be the first such coal-to-oil plant in the country.

While the DOE will allow the project to move forward, the department will monitor a three-year demonstration of the plant after it begins operation.

Owner John W. Rich Jr. said Thursday that WMPI has commitments for 15 percent of the money needed for the plant. Ten percent of the $1 billion will be provided in the form of a loan from the DOE, according to Rich.

“This is not a grant. All of that money has to be paid back,” Rich said. “I used to say that it was a low-interest loan, but now it isn’t low interest at all. It isn’t a freebie. There are all kinds of conditions.”

Another $47 million will come from a state transferable tax credit, according to Rich. The rest would come from loans and private sector investments, but it is unclear when exactly that money would be available.

“I’m not making anymore predictions about a time frame,” Rich said. “With all of the right pieces in place, the rest of the money will come. We would create so many jobs that all the money could be paid back within three years.”

The site is adjacent to the Gilberton Power Plant in West Mahanoy Township. The report describes the land as “currently an undisturbed forested area.” The facility’s storage tanks and truck loading area would be about 300 feet from the State Correctional Institution at Mahanoy.

Rich said the EIS constitutes a permit from the energy department, the last in a series of steps the company is required to take before getting started.

“This is a culmination of four years of reviews and public meetings,” Rich said. “This is not a draft. Everybody that raised an issue is in there (the statement). Everything looks OK. What’s holding us back now, as opposed to permit barriers, are financing and technical issues.”

The plans have been in the works for 15 years. Air permits, water permits and ultimately the DOE approval have kept the project from getting off the ground.

Rich said that it is imperative for the United States to catch up to countries like China, which are already using this technology.

“We’re being outdone by the Chinese,” Rich said. “The buzzword was ‘China 30, U.S. one.’ The Chinese are running up the price of everything, including this plant.”

China has 30 such facilities which were put into full operation quickly due to fewer government restrictions and less monitoring from agencies like the DOE, according to Rich.

Initially estimated at about $800 million, the project cost has increased to $1 billion. Rich said there are only three machine shops in the world capable of building the pressure vessels needed for the plant, all outside the U.S.

“All of the back orders at these plants are with the Chinese,” Rich said. “We’re getting beat to the punch.”

Rich said the small number of facilities, in conjunction with the heavy backlog on orders due to China’s plants, have caused estimated costs to rise.

John Gera, a project opponent since the early 1990s, has argued the plant would put prisoners and prison employees in danger.

Gera took the case to an environmental hearing board in April 2005. The board took no action. Gera appealed to the Pennsylvania Supreme Court and has been waiting since August to hear if his appeal would be approved.

“My question to the public is why are people in power ignoring the issue of the prison?” Gera said. “They’ve said that they won’t get into it right now. Well, they should get into it.”

Gera said the public isn’t fully comprehending exactly what the plant will look like and its potential impact.

“They (the public) don’t know what a real chemical plant looks like,” Gera said. “All people see are cartoons.”

The Department of Energy would not elaborate on its report Thursday, saying “the report is the report.”

Plant construction would take more than a 2½ years with up to 1,000 workers during peak construction periods, according to the report. Following that, the three-year demonstration period would take place with extensive monitoring from the DOE.

The EIS also said the facility could produce 4,000 barrels of liquid fuel per day and the efficiency of this type of plant would be much higher than any current method.

According to the report, the plant would need 7.8 million gallons of water per day to be drawn from the Gilberton mine pool, the plant will emit a total of 2,282,000 tons of carbon dioxide per year, and the pollutants emitted by the plant are considered “a minor new source of all regulated pollutants.”

The EIS says no endangered species are located near the proposed site and in general, wildlife is not threatened.