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Legislative changes in Montana’s environmental laws will be applied to a proposed coal gasification electrical generation plant near Hardin.

Although generation plants were removed from the Major Facilities Siting Act, they must get air quality and water discharge permits from the Montana Department of Environmental Quality.

One of the first plants to come under the new regime is a proposed 100-megawatt coal gasification generator at the old Holly Sugar Corp. beet factory northwest of Hardin.

Rocky Mountain Power Inc. owned by Dick Vinson, of Thompson Falls, who has a lumber mill at Trout Creek and his partner, Lloyd Debruycker, a Dutton cattleman, has a contract with Montana Power Co. for the electricity. The contract, at less that 4 cents a kilowatt, requires a review by the Public Service Commission.

The partners propose to build adjacent ethanol and cement-block plants, which will provide byproduct energy to the coal gasification unit. The estimated cost is $50 million to $60 million.

The project would employ 35 people after completion with another 125 jobs added from the two adjacent industries. The power will remain in Montana.

The Montana DEQ will review RMP’s proposal under the criteria of the Montana Environmental Policy Act, which was also altered by the recent legislative session.

“State action begins with MEPA,” said Dave Klemp, who oversees air emission source permits for the air and waste management bureau at DEQ. The department performs an environmental assessment which determines whether a more comprehensive environmental impact statement is needed.

Klemp said he does not know if the RMP proposal needs an EIS.

Vinson said Tuesday that he has applied for an air quality permit, but Klemp said the application has not been received. The coal gasification process emits sulfur dioxide. New technology and low-sulfur coal has reduced the level of SO2 in such processes, but until DEQ sees the application, it cannot determine what levels might be emitted, Klemp said.

“There are ambient standards for SO2 that must be met, otherwise no permit,” he said.

Vinson hopes to have the plant up and running by July 2002. Klemp said he does not know if that is a realistic expectation, but “he should have the permit by then.”

A water discharge permit is issued separately by the DEQ’s water protection bureau, which has its own extensive review process.

Vinson said the process does not produce wastewater but recycles water used in the “contained cooling system.”

Bonnie Lovelace, chief of the water protection bureau, said separate laws govern the permits for air and water. An application to her bureau would be analyzed, opened to public comment and probably subjected to a hearing. EPA and federal court stipulations would also apply, she said.

Industrial water rights that come with the property have been acquired, and a long-term contract with Westmoreland Resources for just over 500,000 tons of coal a year is pending. Westmoreland mines Crow-owned coal at the Absaloka Mine.

Coal gasification is a process that turns coal into a gas similar to natural gas, which will then be burned to run the turbine.

“The gasification units are very clean,” he said. The units he is looking at are made in Venezuela and are marketed by an Australian firm, he said. “The EPA has rules concerning these (operations) and these units don’t come close to its limits,” Vinson said.

There is a coal gasification plant, built in the early 1980s in Beulah, N.D., which is owned and operated by a subsidiary of Basin Electric Power Cooperative of Bismarck, N.D.

Recent technological changes provide for a more efficient conversion of the coal to a natural gas equivalent and removes the sulfur at a higher temperature, thus saving ancillary energy and reducing cost.

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