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This project is NOT a "done deal."

  • WMPI can't get financing for the project, whose costs have ballooned from $312 million to over $1 billion since the plant was first proposed. The coal-to-oil industry as a whole has languished for lack of investors, and any sane investor wouldn't bother with this experimental pilot-scale plant, anyway.
  • WMPI hasn't been given the $100 million loan promised by the Department of Energy, even though their Environmental Impact Statement was finalized (with some fatal flaws) -- apparently due to the above problems securing private financing.
  • Their air permit (PDF) -- after being appealed to the Environmental Hearing Board -- is no longer valid because the permit requires continuous construction to have commenced within 18 months of when it was granted in 2005.
  • The other two permits they need from the PA DEP (a water pollution discharge permit and a storage tank installation permit) have not been granted yet, as they have been on hold since 2005.
  • Their water withdrawal permit (PDF) from the Susquehanna River Basin Commission to extract 7 million gallons of water a day from the Gilberton mine pool states (point #8) that if the mine pool water level drops too far, they must return to the Commission and apply for additional water withdrawal permits to meet their massive water needs with additional sources.

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Summary

Supplies of oil and gas are failing to meet growing demand in North America and even globally, causing energy prices to skyrocket as these fossil fuels are being depleted. The United States still has large supplies of coal, the dirtiest of fossil fuels. Transportation and heating fuel needs are largely met by oil and gas, but with the rising prices of these fuels, there is now a move towards using coal as one of several new "alternative fuel" schemes, even though cheaper and far cleaner alternatives exist.

Brief history

A new wave of polluting "coal-to-oil" refineries are planned in order to produce low-sulfur diesel fuel through a process that gasifies, then liquefies coal. The technology involved is called Fischer-Tropsch, named after the two German scientists who developed it in the 1920s. The first coal-to-oil refineries were developed to fuel the Nazi war machine and ran from 1936 to 1945. Since 1955, three coal-to-oil refineries were developed under the Apartheid regime in South Africa (another nation with little oil, but plentiful coal reserves). These are the only existing coal-to-oil refineries and their operator, SASOL, is in the process of switching them from coal to natural gas as a feedstock.

Proposals in the US

The first in the U.S. would be build in Schuylkill County in eastern Pennsylvania, an economically depressed anthracite coal mining region whose economy revolves around waste dumping, coal mining, waste coal burning and prisons. This facility would be a heavily subsidized experimental demonstration project that could pave the way for many more of these refineries throughout the U.S.

Several other locations are now being considered for similar (but full-scale) facilities that would be 10-12 times larger. The following states have been named as potential hosts for these larger refineries: Alaska, Colorado, Illinois, Indiana, Kentucky, Montana, Ohio, southwestern Pennsylvania, Virginia, West Virginia and Wyoming. Refinery proposals in some of these states are already in the early stages of development. Coal-to-oil refineries are also being proposed in Australia, China, India and the Philippines.

John Rich's Proposed Refinery in Gilberton, PA

In September 1998, then-Governor Tom Ridge took eastern Pennsylvania's anthracite mining baron, John W. Rich, Jr. on a trade mission to South Africa, where Rich teamed up with SASOL to bring a coal-to-oil refinery to Schuylkill County, PA. Now calling themselves "WMPI Pty, LLC" they formed a team that now includes Rich's Waste Management & Processors, Inc., SASOL, Uhde GmbH, Bechtel, Shell and ChevronTexaco. Eastman Chemical has been named as the company that may operate the plant.

The refinery would be located between Reading and Scranton, Pennsylvania, in northern Schuylkill County, 8 miles north of Pottsville. The site is in Mahanoy Township, between the John B. Rich Memorial Power Station and the SCI-Mahanoy state prison. The state considers communities with over 30% minority population or over 20% poverty rate to be environmental justice communities. The prison houses a population which is 69% black and Hispanic. The nearby towns of Mahanoy City and Shenandoah have poverty rates higher than the state and national averages; high enough in Shenandoah Borough to qualify as an environmental justice community.

Project Timeline and Delays
Rich hoped to start construction in 2000 and have an operating refinery in 2003. His hopeful projections have slipped back for years and he is now aiming to start construction in April 2006 and start operation in 2008. During the 3 year construction period, 76.5 acres of deciduous forest would be cleared of trees, extensive grading would take place, and trees and construction waste would be openly burned. Traffic in the Frackville area would become congested. After three years of operation as an experimental demonstration, they would go into full commercial operation if the demonstration succeeds. If it fails, they're considering tearing down much of the facility and converting it to a coal-burning IGCC power plant, which would locally burn all of the gasified waste coal that would otherwise have been converted to liquid fuels to be burned in gas tanks elsewhere.

Process Details

Known to regulators as the "Gilberton Coal-to-Clean Fuels and Power Project" (and advertised as "Ultra Clean Fuels" at www.ultracleanfuels.com), the proposed refinery would process 4,711 tons of anthracite waste coal into 5,000 barrels of diesel fuel and naphtha each day. Since the refinery can't process waste coal as dirty as that found in the region, the process begins with a "beneficiation" plant in the valley immediately north of the mountain site. This plant would remove rock from the waste coal. The processed waste coal is crushed, mixed with limestone (134,000 tons/year) from Herndon, PA and water (from the mine pool) before being sent to a gasifier, which uses heat and pressure to produce a gas stream and large volumes of solid waste (slag and ash). Sulfur, ammonia and particulates are then filtered from the gas and the remaining gas (mostly hydrogen and carbon monoxide) is put into the Fischer-Tropsch gas-to-liquids (liquefaction) process to produce the diesel and naphtha. These liquid fuels would be kept in 13 storage tanks before being piped to a rail line one mile away for export to markets. Some of the gas stream would be burned to produce electricity (92 megawatts to power the plant, and 41 surplus megawatts to be exported to the electric grid).

Environmental pollutants

Air pollutants
Air pollutants throughout the process would be emitted from the refinery's six stacks (five 200 foot stacks and one 300 foot stack) and from the storage tanks, which are expected to leak over one ton of diesel and naphtha each year. The state DEP has permitted the refinery to annually release up to 99.9 tons each of sulfur dioxide, nitrogen oxides, carbon monoxide and fine particulate matter (including up to 15 tons of sulfuric acid mist) as well as 49.9 tons of volatile organic compounds, 100 tons of ammonia and unlimited amounts of carbon dioxide and other unregulated pollutants. In total, the refinery would release hundreds of tons per year of health-damaging air pollutants, including 38 pounds of mercury. The amount of mercury in one thermometer is enough to contaminate a 20 acre lake to the point where the fish are unsafe to eat. 38 pounds of mercury is equivalent to about 25,000 thermometers. Pennsylvania is already one of only 3 states where the general population is advised to restrict their consumption of all types of fish from any body of water in the state due to mercury contamination.

Since the gasification process enables the separation of hydrogen and carbon dioxide (CO2), Rich has also proposed using the refinery to produce and market hydrogen. Of the 832,000 tons of carbon dioxide they'd produce each year, they hope to sell a small amount to produce dry ice or carbonated beverages. The rest would be released to the atmosphere, contributing to global warming.

Sulfur
The refinery would produce about 4,000 tons/year of sulfur, which they plan to sell to Koch Inc. for use by the agriculture and pharmaceutical industries. While there is currently a demand for sulfur in the U.S., global sulfur production is increasing while global demand is decreasing, which could end up leaving the refinery without a market for their 13 tons per day of sulfur waste product. Dumping large volumes of sulfur in eastern Pennsylvania landfills could worsen landfill leaching and odor problems.

Trading coal ash for slag
Every day, the gasification process would produce 1,600 tons of "glass-like" slag (about 800 tons once dry). They hope to market this waste to the construction and building industries to be used in concrete, mortar, cinder blocks and plaster and possibly for use as antiskid material to be spread on highways. If these markets don't work out, this massive waste stream would be dumped throughout the region, used as backfill for the culm banks -- the same culm piles that the project proponents say would disappear when the plant uses them for fuel. The volume of slag produced over the refinery's projected 26-year lifetime would be enough to fill a football field to the height of 1.5 miles (nearly six World Trade Center's tall). Although coal gasification slag can pass laboratory tests that enable it to test "non-hazardous," in real-world field tests, the slag does leach unsafe levels of toxic metals. If the slag had to be handled as hazardous waste and placed in lined landfills, it's very unlikely that the project could be economically viable.

The gasifier would also produce about 500 tons of "fine solids" (slag filter cake) each day (about 200 tons once dry). This would be even more dangerous than the ash produced by waste coal power plants like the John B. Rich Memorial Power Station next door to the proposed refinery. Such ash has been shown to be leaching and damaging groundwater at Pennsylvania ash dump sites. This toxic waste stream would be dumped on land in the area as part of mine reclamation, but there is the possibility that it will be too likely to leach toxins into groundwater, requiring that it be dumped in area landfills instead.

About 7,400 tons/year of sludges from water and wastewater treatment would be produced. These sludges, full of iron from filtered mine pool water and toxic and cancer-causing contaminants from refinery processes, would be dumped on mine lands if not required to go to landfills. Treated wastewaters would be dumped in a tailings pond near the plant, where any contaminants would build up over time in the soil.

Mercury in the waste streams
In addition to the mercury air emissions, over 500 pounds of mercury each year would be present in the slag, fine solids, and other refinery wastes streams. The mercury pollution from this one refinery would be equivalent to adding 3-4 more waste coal power plants like the five already in the area.

Other feedstocks
In addition to processing anthracite waste coal (culm), the facility would be able to process a wide range of coals and waste products. Rich has stated his intentions to process anything that could go to a landfill (which, in Pennsylvania, is nearly every type of waste imaginable).

Chemical inputs
Dangerous chemicals to be used as inputs for the refinery include about 11,400 gallons/year of methanol for the sulfur separation process, about 5,000 gallons/year of sulfuric acid used for processing and wastewater treatment, and about 3,200 gallons/year of ammonia to be used in the pollution control system of the on-site gas-burning power plant. 57 tons/year of biocides and 53 tons/year of chlorine gas would also be used.

An expanding disaster?
As polluting as this proposed refinery would be, it could get much worse. Rich has stated that, eventually, "he sees the plant building out its capacity, requiring a $4.2 billion investment" -- possibly expanding to be as large as the others he hopes to build (10-12 times larger).

The politics of pollution

John W. Rich, Jr., his family members, corporate partners and WMPI lobbyists and consultants have all contributed to the campaigns of various politicians who have, in-turn, showered the refinery project with generous state and federal subsidies. Recipients include President George W. Bush, Senators Specter and Santorum, Congressman Tim Holden, Governor Rendell, State Senator Rhoades and State Representative Argall.

Subsidies and Tax Breaks
The refinery would benefit from a wide range of tax breaks and subsidies, including:

  • $7.8 million from the U.S. Department of Energy's Clean Coal Power Initiative (already awarded) for engineering studies
  • $100 million from the U.S. Department of Energy's Clean Coal Power Initiative (pending completion of the EIS process)
  • $47 million in tax credits from the Commonwealth of Pennsylvania
  • $465 million in loan guarantees from the Commonwealth of Pennsylvania
  • An agreement where the state and its trucking association will purchase nearly all of the refinery's product at $1.30/gallon (30 cents more than their cost of production)
  • Exemption from all state and local taxes through 2013
Rich's experimental refinery would cost $612 million. Initially, the project was to cost $300-312 million, but after nearly 4 years of publicizing the project cost at that amount, the price tag mysteriously jumped to $612 in 2002 -- the year that WMPI applied to the Department of Energy, asking for the $100 million that they were later selected to receive.

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