Squeezing more than diamonds from coal
Jun. 13--DOUGLAS -- By Jessica Lowell, Wyoming Tribune-Eagle Knight Ridder/Tribune Business News
Daniel Fessler left Wyoming at 18.
He's got the plan; all he needs is about $1.7 billion.
Fessler is the managing principal of Clear Energy Solutions, a company that
proposes to do what's been talked about a lot and accomplished very little --
adding value to the state's coal resources by developing the raw material into
some other product.
Fessler plans to use technology that's been proven for about nine decades to
develop a synthetic diesel fuel plant to meet coming air quality standards. The
plant also would generate electricity and produce carbon dioxide, a valuable
commodity in developing some of the state's oil reserves.
"I've spent the better part of five years looking for a place to do
this," he said last week in Douglas.
He had considered a site near Kemmerer in southwest Wyoming, but that didn't
work out, in part because he could generate no interest in the electricity the
plant would make.
Fessler has now set his sights on Converse County, where he has an option to
buy six square miles of land.
While $1.7 billion is the long-range cost, in the near term, Fessler said he
needs about $32 million for the site-specific study of the land he's picked out
to determine the feasibility of the project, which depends a lot on the
availability of water.
Fessler is just one of four developers considering such projects.
He and three other companies gave brief presentations at last week's Joint
Minerals, Business and Economic Development Interim Committee in Casper at a
panel discussion of adding value to minerals before they leave the state.
The committee is likely to talk about what lawmakers might do in the upcoming
legislative session to promote developing coal gasification in Wyoming.
One of the presentations was by DKRW Energy, a company founded by four former
Enron executives who plan, through a subsidiary called Medicine Bow Fuel and
Power, to develop a $2.8 billion coal gasification plant in Medicine Bow in
Carbon County.
Rentech Inc., based in Denver, has presented the results of its
coal-to-liquids study to the office of Gov. Dave Freudenthal; the study was done
on behalf of the Wyoming Business Council and looked at the economic viability
of using what's known as clean-coal technology to develop products from
Wyoming's vast coal reserves.
Rentech officials concluded that the Powder River Basin represents a great
opportunity to maximize the value of Wyoming coal at a facility at the mouth of
a coal mine.
Waste Management and Processors Inc., a Pennsylvania company that's won a
$100 million grant from the U.S. Department of Energy, is to build a
coal-to-clean-fuels plant in that state; it also has a commitment from
Pennsylvania lawmakers for $47 million.
All of the presenters pointed to the benefits of capturing carbon dioxide,
which can be used in tertiary recovery of oil; that would expand the state's oil
production.
Fessler hit on a couple of other points. Because of coming clean air
standards, the clean diesel this process would make could be used in the Powder
River Basin to clean up the air there and pave the way for more development.
And the electricity the process generates could be sent out on transmission
lines to bolster the output of wind farms to states like California, which have
green energy requirements.
All of the projects use some version of Fischer Tropsch technology, developed
early in the last century by German scientists.
Today, South Africa uses the technology, and Israel has the capability to
convert coal into synthetic diesel, Fessler said.
While the technology is proven, Fessler said his biggest hurdle is with the
funding.
"We're not asking the government for anything," he said.
He said he'd like to see a consortium of investors, an angel investor or even
"archangel" step up with the funding.
While he says he's not asking the government for anything, the government may
give him and his competitors something anyway.
In the energy bill that the U.S. Senate is now considering is a provision
that would award federal loan guarantees for "a project to produce energy
from coal -- mined in the western United States using appropriate advanced
integrated gasification combined cycle technology -- and shall be located in a
western state at an altitude greater than 4,000 feet."
Tyson Slocum of Public Citizen, a non-profit consumer advocacy organization
founded by Ralph Nader, said his organization's research pointed out an
advantage to the company of the former Enron executives, but he has since
learned that the provision was written with a project to be developed in
Colorado that hasn't been announced yet in mind.
Fessler said his proposal is a little different, because he would dedicate
land to a joint project of the Energy Department and the University of Wyoming
to study and improve the technology.
At the end of Wednesday's Minerals Committee meeting, Wyoming Mining
Association Executive Director Marion Loomis reminded lawmakers that Wyoming has
seen projects like this before.
When he was at the Department of Economic Planning and Development 30 years
ago, there was a great push to develop alternate fuel sources to wean the United
States off imported oil.
"The federal government did lease a lot of coal, and we did open a lot
of mines and power plants," Loomis said.
If the state is serious about adding value in the state to coal, it's going
to have to step forward with incentives, he said.
"We're doing an analysis of Ohio, Pennsylvania, Illinois, North Dakota
and South Dakota of incentives and how they are encouraging plants to come into
the state," Loomis said. "We should do the same."
A bill to do that died in the Senate earlier this year, he said.
At the time, the Equality State Policy Center -- which has studied mineral
tax policy in the state -- objected because in other states, incentives were
tied to job creation, while the Wyoming proposal was not.
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