Hope remains for future of coal-to-liquid fuels project
Questions about the financing and a murky national energy policy are clouding the future of a proposed $1 billion coal-to-liquid fuels project.
Yet John W. Rich Jr. remains optimistic his plan can help break the nation’s dependence on foreign oil.
“There’s not any threat of a war over coal, but there sure is a threat of war over oil,” Rich said in an interview Thursday. “We’re continuing to pursue this whole effort. We’ve been at it for a long time. We certainly got tripped up at the federal level. … This is where the future is – making liquid transportation fuels.”
The project – planned for Mahanoy Township – has been in development for two decades. For much of that time, Rich had been counting on $100 million from the U.S. Department of Energy to help fund the project, which would convert waste coal to usable diesel fuel.
However, the federal government pulled that money from the project without explanation during the last days of the Bush administration.
The move came after Energy Department officials met privately with project subcontractors. Rich was not present at the 2008 meeting and has said he believes the administration was playing “run out the clock” with the project, unwilling to “breathe life into competition for big oil.”
U.S. Rep. Tim Holden, D-17, in late 2009 requested the Department of Energy’s inspector general look into why the funding was pulled.
In an interview Friday, Holden said the inspector general produced a preliminary report late last year but is still investigating.
“We think something went wrong here,” Holden said. “Basically, he (the inspector general) said things looked unusual, out of the normal process, but he was having difficulty having anyone go on record that anything illegal or unethical happened. On the way out the door, the Bush administration reprogrammed that money. I think it’s an uphill battle to have it reprogrammed at this point.”
Under the Obama administration, Rich said there has been “pure uncertainty” with respect to such projects, despite the president’s frequent claim that the nation must invest in new energy sources.
Rich said the energy department’s involvement was a sort of “seal of approval,” letting other potential investors know that the project is viable and likely to actually break ground.
“It’s one thing for me to go call people up all over the place … but when you say that, ‘Hey, I applied and DOE is participating,’ it drives people together. They’re a huge facilitator,” Rich said.
Meanwhile, another multimillion-dollar coal project in Porter Township is in the works, developed by Canada-based EmberClear. The roughly $800 million Good Spring Integrated Gasification Combined Cycle – or Good Spring IGCC – would turn anthracite coal into synthetic natural gas. That gas would then be put into a standard turbine to generate electricity.
EmberClear CEO Albert Lin said Thursday that federal grants, loans and other money sources are being evaluated for the project. Private domestic investment or foreign money are also possible, according to Lin’s e-mail to The Republican-Herald.
The project, Lin said, would be developed by EmberClear but will eventually be owned and operated by a utility company or similar party. Those eventual owners will have a say in how the project is financed, according to Lin.
The company hopes to break ground before the end of the year.
Both projects grapple with the same problem – an unclear energy policy.
“The project could be privately financed, but governmental regulations must have a higher level of clarity for such a scenario to move quickly,” Lin said. “The lack of a climate bill being passed despite years of drafts has created so much uncertainty with the financial community that it has become very hard for any project to get the attention and support once seen in the industry.”
Rich said he has similar concerns. Early in the Obama administration, the Democrat-led House of Representatives pushed through the cap-and-trade energy bill, which set caps on emissions and allowed companies to trade energy credits with each other in order to stay below guidelines established by the federal Environmental Protection Agency.
The bill never came to a vote in the Senate and Holden said it now appears dead.
“I don’t think it will even be considered in the House,” he said.
However, just because that bill appears off the table, the nation’s energy policy going forward remains unclear. Rich’s project and EmberClear’s effort could theoretically suffer, depending on what restrictions are put on coal in future energy legislation.
In the meantime, Holden said he’s fighting for coal to be a central component of whatever the policy turns out to be.
“We cannot turn our back on a 200-year plus deposit of coal and not take advantage of it,” he said. “I’m going to continue to work at it.”
BEN WOLFGANG (STAFF WRITER bwolfgang@republicanherald.com)
Published: February 26, 2011
http://republicanherald.com/news/hope-remains-for-future-of-coal-to-liquid-fuels-project-1.1110966