TransGas coal-to-liquids plant construction expected Q1 2013 - Business, Government Legal News from throughout WV

TransGas coal-to-liquids plant construction expected Q1 2013

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Major construction on the Adams Fork Energy coal-to-liquids plant planned for Mingo County is expected to begin in the first quarter of 2013, according to a June 8 update from the developer.

"(TransGas Development Systems President Adam Victor) was in, we did meetings with most of the local officials and then held a ‘town hall' kind of meeting over in Gilbert on Friday," said Randall Harris, TransGas project developer for the Mingo County Redevelopment Authority.

"He said that it was moving from the development phase into the financing phase and that everything was on track for closing by the end of this year, with major construction ramping up the first quarter of 2013," Harris said.

New York-based TransGas began site work a year ago on the plant it announced in 2008, then and still expected to be the first synthetic fuel plant in the nation.

Originally thought to cost $3 billion and later estimated at $4 billion, the project would take the place of the $2 billion Longview power plant as the largest private investment ever in the state.

At the Governor's Energy Summit in December, Victor said the company expected to close financing for components purchases by the second quarter of 2012 — or about now.

"I think he had hoped to be able to make an announcement this week, but it looks like it's probably a week or two off," Harris said.

The Adams Fork project is designed to convert 7,500 tons of local coal per day to 18,000 barrels of gasoline and 300 barrels of liquefied petroleum gas, or propane, according to 2011 information on the project.

The plant will convert coal to synthetic gas, or syngas, and convert that to liquid fuels.

Harris responded to concerns that the plant isn't viable now because it can't make sense financially to convert coal to synthetic gas and then to liquid fuels when the intermediate product, natural gas, has become very cheap since this plant was originally announced.

The flaw in that logic is that synthetic gas isn't natural gas, he said.

Syngas is a mixture of carbon monoxide and hydrogen, and natural gas is methane.

A plant that converts coal to syngas can be permitted as a minor air pollution source, he said — the West Virginia Department of Environmental Protection's decision to issue TransGas a minor source permit is in Circuit Court now on appeal, according to DEP — whereas  one using methane would also have to convert it to syngas, a process that would have to be permitted as a major source, he said.

The product will compete easily with gasoline from petroleum, Victor said in December, based on the company's calculations at that time showing the plant's cost to produce gasoline at under $2 per gallon.

And in the long run, Harris said, the company expects the price of coal to be more stable than the price of natural gas.

A little more on the plant's environmental performance: It will use 1.5 million gallons of water per day, Victor said in December, and his plan is to reclaim mine water for that.

And on the subject of greenhouse gas emissions, the lifecycle emissions of coal-based liquid transportation fuels is said to be higher than those of petroleum-based fuels. Victor told The State Journal at the time of the groundbreaking that his process allows him to capture carbon dioxide more cheaply than what petroleum refiners would have to do and that, if rules were passed that required its capture, he would send it to the Gulf of Mexico to help with oil extraction.

Plant construction will employ 5,000 union workers and should take about 48 months, Victor said in December.

He has announced that jobs will be given preferentially to veterans of the wars in Iraq and Afghanistan, including disabled veterans, according to Harris. He also has committed previously to hiring locally.

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