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His energy answer lies in coal industry's waste
Philadelphia Inquirer
Wednesday, April 11, 2001
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GILBERTON, Pa. - Like larger-than-life tombstones, the black piles of coal waste on the denuded hillsides that pock northeastern Pennsylvania mark the devastation left by decades of mining.
But John W. Rich Jr., entrepreneur and partial heir to a family coal fortune, says his company and its partners will change all that for Schuylkill County, and perhaps for other coal regions across the country.
Rich's company, Waste Management & Processors Inc., and its corporate partners are racing to become the first in the United States to build and operate a full-scale, coal-to-liquid-fuel facility.
Such a plant uses for raw fuel the very waste that coal-mining operations spew out by the ton. The most visible examples are those towering banks of culm - anthracite coal mine waste that contains fine coal, coal dust and dirt; the state says there are more than 900 such piles spanning 8,600 acres in the state.
"This is what we're after," Rich said, tapping a tiny glass jar filled with a clear liquid - a sample of the sulfur-free diesel fuel produced with the technology he hopes to implement at a planned 20-acre facility in Gilberton.
"We're mitigating against just the thing that's given the coal industry a bad reputation," said Rich, an energetic 48-year-old whose family owns an array of local businesses.
The coal-to-diesel proposal falls under the umbrella of "clean coal" technologies that President Bush has touted in developing a national energy strategy.
Conservationists, however, have derided clean-coal efforts as paradoxical.
"You still don't want to live next to a clean-coal plant," even with their lower emissions, said Tyson Slocum, a senior researcher at Public Citizen, a Washington environmental and consumer advocacy group.
Public Citizen takes issue with subsidizing the development efforts with tax dollars.
"This is not pie-in-the-sky," Rich countered, pulling out a sheaf of contracts recently signed with the U.S. Department of Energy, San Francisco engineering giant Bechtel Group Inc., Texaco Inc., and Sasol Group, a diversified fuel, chemical and technology firm in South Africa.
The plant that Rich's consortium hopes to build would produce about 5,000 barrels of diesel fuel a day. Rich said it would create 1,000 construction jobs over five years and 150 permanent jobs for an area that has watched the boom times of the coal era fade to black dust.
In all, Rich said, the endeavor will cost more than $300 million, with private financing accounting for the larger share.
Preliminary work on the project, scheduled to break ground in late 2003, is under way. The Energy Department is paying $7.6 million to supplement $4.4 million of Waste Management & Processors' money for design and feasibility work.
In 1999, the state passed legislation authorizing up to $47 million in tax credits for the coal-to-liquid project. U.S. Sen. Rick Santorum (R., Pa.) and Rep. Tim Holden (D., Pa.) are supporting similar tax-credit legislation in Congress.
Rich defends the subsidy, saying it will put the new technology on an equal cost footing with other fuels. He reasons that taxpayers subsidize imported oil as well, through the expense of deploying U.S. forces to the Middle East.
"Why do we have to send young men and women over to the Persian Gulf?" Rich asked. "Let's keep those dollars at home."
Rich is openly critical of the Organization of Petroleum Exporting Countries for "arbitrarily" setting the price of oil and unduly influencing U.S. foreign policy, family budgets and business decisions.
"Let some of these [coal-to-fuel plants] start popping up . . . and see if they keep messing with us," Rich said.
Construction of such plants also could end debate on whether to explore for oil and natural gas in the Arctic National Wildlife Refuge in Alaska, Rich said.
"We don't need to be in Alaska," he said. "That whole argument just drives me crazy."
Behind the wheel of his leather-appointed Jeep sport-utility vehicle last week, Rich skidded around the curvy, tarry roadway carved between towering heaps of coal that sit on a hill overlooked by one of his two coal-fired electricity-generating plants.
"You can see it all around us. Everything around here is potential feedstock" for the coal-to-diesel facility, Rich said.
Rich acknowledges the legacy of blight left by the coal industry: contaminated water, devalued real estate, and hollow economies where coal once brought prosperity.
But Rich said he was reclaiming damaged areas, by capping them with ash from power plants, and clay, and then planting them with trees and grass.
As for the local economy, Rich said annual payrolls for the coal-to-diesel project would total more than $22 million. Secondary jobs that support the project and employees would total far more, he said.
Rich said two proven processes - gasification and liquefaction - combine to make his vision work.
In gasification, coal waste is mixed with water into a slurry. The mixture is heated to more than 2,500 degrees in an enclosed chamber. The by-products are a mixture of carbon monoxide and hydrogen called "syngas," and an inert, harmless aggregate that resembles crushed brown glass.
The aggregate can be used as construction filler material. The syngas is then cleaned of sulfur, liquefied, and refined into liquid fuel.
The processes produce extremely low emissions and no waste, Rich said. The sulfur gets packaged and sold to pharmaceutical firms. Even excess steam gets used; Rich plans to generate electricity with it.
"We're going to have a market for everything that comes out of it," he said.
Slocum, of Public Citizen, acknowledged that it is better to keep tax dollars circulating domestically to develop new energy technologies than it is to support OPEC.
But clean coal should not be one of those technologies, he said.
"There's a third option: subsidies for renewable energy and conservation," Slocum said.
Some environmentalists criticized the Bush administration last month for favoring clean-coal technologies and increased domestic drilling over energy conservation and renewable sources such as solar and wind power.
Hamid Arastoopour, a professor of chemical and environmental engineering at the Illinois Institute of Technology, said the benefits of advancing coal technology far outweighed the risks. Arastoopour helped develop gasification technologies during the 1980s.
"It's doable," he said. "The technology's there."
Whether it can be cost-effective, though, is another question, Arastoopour said.
"We can create very clean by-products," he said, but "every separation process you have, you increase the cost. You have to ask, 'What are the choices?' "
Coal is the cheapest and largest contributor to the nation's power grid today. Replacing it with some other fuel - or using half as much electricity - is not feasible, Arastoopour said.
"This is kind of the only alternative we have to be independent," he said.
Richard Hucko, a manager with the Department of Energy, is cautious about predicting whether Rich's project will be an economic success, but he said that effort and similar ones being studied by the department were addressing important problems.
"There is this compelling need," said Hucko, acting division director for coal projects at the department's National Energy Technology Laboratory. "You have an environmental eyesore in those anthracite culm banks, and you have this fact we are buying much of our oil from other countries."
Though it may be too early to validate Rich's visions of economic and environmental vitality for Schuylkill County, Energy Department officials are encouraged by his enthusiasm.
"We're glad he's optimistic," Hucko said. "He seems to be the type of person we love to work with on this sort of project."