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DOE looks at funding for liquids, coal project

DOE looks at funding for liquids, coal project

CASPER — A proposed coal-to-liquids processing plant has received strong state and local support for the jobs and economic benefits it could bring to communities in Carbon County. But some environmental concerns remain.

Construction of the facility would require some 2,300 workers over two years, and provide up to 500 permanent jobs, according to Medicine Bow Fuel & Power LLC, a wholly-owned subsidiary of DKRW Advanced Fuels LLC.

But construction could also significantly increase particulate matter emissions in the area. The facility could consume up to 432,000 gallons of groundwater per day over the 30- to 50-year life of the facility.

“I can faithfully say there is overwhelming support in Carbon County for this project to go forward,” Rep. Jeb Steward, R-Encampment, said.

Governor support

Among those in support of the project is Gov. Dave Freudenthal, who wrote to the U.S. Department of Energy last week.

Although Steward worries about the accumulative depletion of water resources, Steward said the Medicine Bow project has been highly scrutinized and still no fatal flaws have been detected.

The U.S. Department of Energy held a public scoping meeting on Wednesday as part of an Environmental Impact Statement analysis of the project. The EIS is required because DKRW Advanced Fuels has applied for a federal loan provided for advanced coal technology projects in the 2005 Energy Policy Act.

Total cost of the project could approach $3 billion, according to DKRW. DKRW isn’t saying how much money it has applied for under the federal loan program, but local officials said DKRW is asking for as much as two-thirds of the cost.

Bob Kelly, a founding partner of DKRW, said the coal-to-liquids project was designed to attract enough private investment to move forward, but the current state of the financial market makes it difficult.

“We’ve always developed the project to be financable in normal financial markets,” Kelly said in a phone interview. “I think, eventually, the banks will get back to lending money to people, and that will help.”

Eligibility requirement

Part of the eligibility requirement for the federal loan program is the capture of at least 50 percent of the carbon dioxide emissions from the coal-to-liquids refining process.

Earlier this year, Kelly told Wyoming officials that the capture and compression of CO2 from the facility could add another 200 million cubic feet (Mmcf) of CO2 per day to Wyoming’s enhanced oil recovery market.

In recent years, companies with old oilfields in Wyoming have eagerly signed up for CO2 supplies from two natural gas processing plants, so they can inject the CO2 into oil reservoirs and yield barrels of oil that otherwise would be left in place.

Earlier this year, the Wyoming Outdoor Council raised concerns that construction of the project — and related coal mining activity — would degrade air quality in the region.

The plant, as proposed, would emit 195 tons of “particulate matter,” or dust, each year, according to state documents. The Industrial Siting Council approved a permit for the facility despite the concern.

“We’re concerned with particulate matter, from both the coal mine and the construction process. We are also going to be alert to impacts to surface and groundwater,” said Richard Garrett, energy and legislative advocate for the Wyoming Outdoor Council.

Contact Dustin Bleizeffer at dustin.bleizeffer@trib.com or 307-577-6069.

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