Schuylkill plant will turn coal waste into fuel

The facility's parent company says it will produce sulfur-free heating oil, diesel fuel and kerosene. But critics say byproducts of the conversion process won't be so clean.


By Mike Urban
Reading Eagle

GILBERTON A company in this Schuylkill County community is moving closer to turning huge piles of coal waste into fuel thanks to a federal loan guarantee and Pennsylvania's commitment to buy some of its products.

The $612 million project is expected to rid the anthracite region of millions of tons of unsightly coal waste while producing clean, cheap energy that will help lessen America's dependence on foreign oil, officials said.

Waste Management and Processors Inc. plans to begin construction of its Mahanoy Township plant in April.

The facility will convert 1.4 million tons of coal waste also called culm into 40 million gallons of diesel fuel, heating oil and aviation kerosene annually. The plant will also produce 20 million gallons a year of a low-octane gasoline used by oil refineries.

Construction and start-up will take three years and create 1,000 temporary jobs, company President John W. Rich Jr. said.

Once in operation, the plant will provide 600 permanent jobs regionally.

The company will be the first in America to blend two existing technologies to turn culm into sulfur-free diesel fuel.

Eventually the company will alter the process so it can convert landfill materials or pulverized wood into fuel, Rich said.

The recent federal energy bill guaranteed that a $100 million low-interest loan previously set aside for the project will be available, and the state has promised $47 million in tax credits.

The state and two trucking consortiums have agreed to buy about 25 million gallons of fuel annually, and several other trucking groups and the Department of Defense plan to buy the rest, Rich said.

“We have more demand than supply,” he said.

The company still needs investors or loans to pay for the remaining $465 million of the project cost, but the state and federal help will make that easier, Rich said.

“Investors are always wary of new technology, but having these buyers has created more interest,” he said.

The buyers will pay much less than they would for conventional diesel fuel, and the price will fluctuate much less, according to Rich.

“Instead of further enriching and empowering the OPEC nations we will be creating jobs here,” he said.

But the project doesn't have unanimous support in the region.

Some local officials and residents fear the plant will pollute the area, produce a foul smell and use too much water.

“It will emit gases and particles that cause respiratory problems, haze and acid rain,” said West Mahanoy Township supervisor Evelyn Andrews, pointing to other coal-to-oil plants around the world.

Rich contends his process is cleaner and will control emissions and odors. The state Department of Environmental Protection agrees.

“This will be a clean-air facility with much fewer emissions than traditional coal-fired power plants,” DEP spokesman Kurt Knauss said.

Runoff from Pennsylvania's 1 billion tons of culm and from abandoned coal mines is the state's top water pollutant. The removal of coal waste will greatly improve rivers and streams, DEP Secretary Kathleen McGinty said.

“And because this fuel will contain no sulfur, it will be the cleanest produced in America,” she said.

The plant is permitted to draw up to 7 million gallons of ground water per day and use 3.47 million gallons per day. The Susquehanna River Basin Commission, which regulates large-scale water use in the area, believes that amount will not drain wells or creeks, spokeswoman Susan Obleski said.

If an unanticipated water shortage should occur, the company would be ordered to cut its consumption, she said.

Opponent Andrews also thinks it is wrong for the company to receive tax credits and a low-interest loan for the project.

“It's outrageous that a private company is getting our tax dollars,” she said.

But federal and state officials say those payouts will pale in comparison to the project's many benefits.

“Every day we see the necessity for a national policy to address America's energy needs,” Gov. Ed Rendell said in a written statement. “Pennsylvania is going to build its own energy and keep the money it now spends on foreign energy to make investments here.”

The nation's military supports new methods of fuel production to diversify America's energy supply and to cut the risk of it being disrupted, as occurred after Hurricane Katrina, said Dr. William Harrison, senior adviser of the U.S. Department of Defense's Clean Fuels Initiative.

The plant also will generate 41 megawatts of low-cost electric power, enough to power more than 40,000 homes.

It is only fitting that Pennsylvania will help break the nation's dependence on imported oil, Rendell's spokeswoman Kate Phillips said.

“We have a proud past as a coal-producing state, and that past will help build our future,” she said.

Reporter Mike Urban at 610-371-5023.

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