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Coal-to-gas anthracite's
next boom
Other coal operators, however, are looking to more traditional markets
to survive
Sunday, February 3, 2002
John Rich Jr. doesn't have much hope for the traditional anthracite industry as he knows it.
"The prospect is bleak," he said. "The coal industry and its production is a fraction of what it used to be. This whole industry has been depressed for so many years."
Rich does, however, have faith in the coal business he envisions.
"If we can turn waste coal into something useful, we can see a whole resurgence in a sense."
In Rich's mind, that something useful is a liquid fuel derived from excess anthracite. Rich and two corporate partners know how to do it and claim to be closer than ever to making the coal-to-gas process a daily routine.
As heir to the family-owned Gilberton Coal Co. in Schuylkill County, he's witnessed first-hand the decline of the once-strong heating market for hard coal.
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That's part of the reason he changed his outlook on the industry in the mid-1980s. Rich turned his coal business into Waste Management Processing Inc. and the Gilberton Power Co. in 1987 with a plant driven by anthracite waste. Around the same time, Rich saw a gasifier in action, the first glimpse into his future and what he believes is the future of anthracite. Ever since, Rich has worked to bring a second plant - one that would turn coal refuse into a zero-sulfur diesel fuel - to his business in Gilberton. Such an enterprise would solve a number of problems facing the anthracite business and the region that supports it, Rich believes. Domestically produced fuel would lessen America's dependence on foreign oil. The coal-to-gas process would re-energize the local anthracite industry. The effort would help eliminate the culm and coal waste piles that dot the region. Rich's idea gained support a few years back from Sasol Ltd., a South African company he calls the Wright Brothers of gasification, Chevron/Texaco, and construction firm Bechtel Group. His plan truly picked up steam in 1999 when Rich earned $47 million in tax incentives from the Pennsylvania legislature, then a $7.6 million start-up grant from the U.S. Department of Energy. In fact, the grant is part of a cost-share with the federal government that will cover 65 percent of the ongoing development cost, which could reach $400 million by project's end. |
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The idea even caught the attention of President Bush. Rich told the president of this plan at a function he attended in May.
As they spoke, Spencer Abraham, U .S, secretary of energy, and Christie Todd Whitman, head of the Environmental Protection Agency, walked over to join the conversation.
"The president said to them 'This is the guy that wants to turn crud into fuel,' " Rich recalls. "I told them 'You're talking about clean coal, and we've got the epitome of clean coal technology.' " The contingent was so interested in Rich's proposal that Whitman scheduled a visit to his Gilberton facility.
But on the week of the planned gathering, U.S. Sen. Jim Jeffords switched to the Democratic Party, changing the schedules of every government official in Washington, including Whitman.
Rich has not been able to reschedule with the EPA director, but says he doesn't need a meeting with federal officials to follow through on the project.
It wouldn't hurt, though.
Rich remains hopeful that work on his coal-to-gas facility is only 12 months away. The project will create 1,000 initial construction jobs and 150 permanent jobs, he said.
The plant will be built right next door to and work hand-in-hand with the Gilberton Power Co. It will employ gasification and liquefaction, the two processes needed to turn coal into transportation fuel.
Waste anthracite enters the facility as a fine slurry - 65 percent coal-based carbon and 35 percent water - that is heated to 2,500 degrees Fahrenheit and mixed with oxygen to produce a crushed, glass-Iike material and synthetic gas.
The glass-Iike byproduct is removed and used in concrete, mortar and plaster. The syngas, meanwhile, continues on to a scrubber that removes fine particulates and sulfur, which is sold to pharmaceutical companies.
Now clean, the syngas is combined with catalysts to create a wax-like substance. A final chemical reaction turns the wax into its liquid fuel form.
The plant will be able to produce 5,000 barrels every day. The fuel probably will not be used independently, but rather taken to a refinery and mixed in with an existing product to give it a higher quality.
Rich's fuel will likely sell at $1.10 per gallon, he said.
Others within the anthracite industry continue to promote coal in traditional markets, but are realistic about the chances of a resurgence by those means.
"I think it's going to be hard for us to recapture the space heating market," Francis Curran Jr., engineer for Coal Contractors Inc., said. "Sure we can improve on some of that, and it would help if state and federal institutions would consider it (as an energy source).", Curran is also hopeful the U.S. steel industry, which uses anthracite to speed up the melting process, can rebound. Should foreign steel continue to surge, however, anthracite producers in China and Russia stand to benefit, and the local hard coal industry would face "an uphill battle," he said.
Another industry insider exudes a more simple optimism.
"My hope is that people begin to realize the benefits of anthracite coal," Duane Feagley, executive director of the Pennsylvania Anthracite Council, said. "It's not polluting the environment like many contend, like the bituminous industry."
Anthracite contains less sulfur than its softer counterpart, therefore limiting emissions of sulfur dioxide and nitrogen oxide.
Coal-fired plants like the Gilberton Power Co. are up to 98 percent clean, but new technologies, like Rich's proposed coal-to-gas facility, can help clean emissions even further.
In Pennsylvania, there are still 4 billion to 6 billion tons of mineable anthracite reserves. Under current market trends, Feagley said, that would last 1,000 years or more.
Feagley and other industry insiders hope hard coal is gone much sooner. That means market conditions will have swung in their favor.