WHEELING - Thus far, the idea of converting coal to liquid fuel has yielded little more than broken promises of job creation and industrial rebirth for the Ohio Valley.
While one such proposal, the Baard Energy project in Columbiana County, appears to be moving forward - albeit well behind schedule - residents of West Virginia's Northern Panhandle since 2008 have watched two others crumble before even getting off the ground.
The question is this: why are these facilities so hard to construct?
File photo by Ian Hicks
Former state Delegate Pat McGeehan, left, and Albion Arlo Norman Jr. are shown during a 2010 meeting with Weirton city officials. Recent revelations about Norman's criminal past have scuttled a proposal to build a coal-to-liquid facility in Weirton.
First off, they're very expensive. A project planned on former Weirton Steel Corp. property was estimated at $2 billion.
There also are environmental permits to consider, and carbon sequestration - which would allow the proposed plants to inject their carbon emissions deep into the ground - remains an unproven technology, by all accounts. The U.S. Environmental Protection Agency's current stance on burning coal doesn't help, either.
The latest of those projects, in Weirton, fell apart after it was revealed one of its principals had a federal arrest sheet and spent several years in prison for stealing millions from a New York cemetery. Another project, planned for Benwood, was scrapped just two months after its announcement when one party in the deal - Synthesis Energy Systems - decided it would prefer to do business in China instead. Consol Energy Inc. was the other partner in that project
The local area has had two failed coal-to-liquid plant ventures - one in Benwood and the other in Weirton - and Baard Energy has been working for years to build one in Wellsville. Why are these facilities so hard to construct?
First off, they're very expensive. The Weirton project alone was estimated at $2 billion. There also are environmental permits to consider, and carbon sequestration - which would allow the proposed plants to inject their carbon emissions deep into the ground - remains an unproven technology, by all accounts. The U.S. Environmental Protection Agency's current stance on burning coal doesn't help, either.
A positive development in the Baard project came in January, when the Columbiana County Port Authority, backed by Florida-based Planck Trading LLC, acquired about 25 percent of the land needed to build the proposed, $6 billion facility in Yellow Creek Township near Wellsville. Of the approximately $703,000 paid to three different owners for the property, the port authority kicked in $161,000, with the private investment firm providing the remainder.
Last month's closings leave about 390 acres with 14 separate owners left to purchase. The port authority expects Planck Trading to wire more funding in the near future to continue the process.
That process, however, has become more expensive than previously anticipated, as roughly two years of delays in lining up the necessary financing have forced officials to pay to extend purchase option agreements on the remaining parcels.
Leaders with Baard Energy, based in Vancouver, Wash., previously said once built, the facility would create thousands of constructions jobs as well as about 450 permanent, full-time positions once operations begin.
In November 2008, the Ohio Environmental Protection Agency issued the last of the environmental permits needed for construction.
Baard represents a glimmer of hope for an industry that hasn't been able to get much traction locally. Last year, a Charleston-based corporation named Weirton Energy Inc. came to Weirton with plans to build a $2 billion coal-to-liquid plant. Its chief engineer, Al Norman, claimed the project would create more than 1,000 family-sustaining jobs.
A deal had even been struck with the local United Steelworkers chapter to establish a combined union with workers at ArcelorMittal's Weirton tin mill. The company reportedly was trying to acquire much of the steelmaker's idle property in the city.
The plan disintegrated in January when Norman - full name Albion Arlo Norman Jr. - was arrested by Hancock County deputies on a fugitive warrant, wanted for grand larceny in Texas. Lone Star State authorities reportedly decided the case wasn't important enough to get Norman and bring him back to answer that charge, and he was released after five days at the Northern Regional Jail.
After the information came to light, United Steelworkers Local 2911 President Mark Glyptis said the project could not move forward under the Weirton Energy group.
In August 2008, local, state and federal lawmakers celebrated the announcement of a coal-to-liquids plant to be built at the Marshall County Industrial Park in Benwood. A joint venture between Synthesis Energy Systems Inc. of Houston and Consol Energy, it was expected to create nearly 100 jobs.
Weeks later in October, Synthesis Energy backed out of the deal, citing concerns over an unstable American credit market. That same day, the company announced plans to build a similar facility in Henan Province, China.
The concept of coal liquefaction has grabbed attention in recent years as fuel prices continue to soar. But experiments with the process were done in Marshall County, at a laboratory near the McElroy Mine, as early as the 1960s. The scientific results were promising; however, at the time it was not deemed financially feasible with the average price of conventional gas only 25 cents per gallon.
Former Gov. Arch Moore, a Glen Dale resident, said when he served as a congressman representing West Virginia's 1st District, he was able to convince the U.S. Department of the Interior to establish the laboratory in Marshall County.
He termed the costs "minimal," at about $750,000 per year. At its peak, the laboratory had as many as 30 employees.
"It was not sponsored by any private sector - just the U.S. government," Moore said during a 2008 interview. "It was established under my request as a congressman to examine the uses of coal in the economy. It was to spend three years examining the possibilities of coal for gasificication, but it had tremendous success and it kept operating. They kept expanding their comparisons to what coal could be converted to and used, and it stayed open into the 1990s.
"Early results indicated they had found many uses for coal. But they also found that at that point in time in our country, it was not momentarily feasible to convert coal to gas."
A subsequent report received by Moore termed the laboratory's work a "very feasible program," but that the cost of creating a gallon of gasoline from coal was greater than what it was selling for at the pump.
Moore left Congress in 1969 to become West Virginia's governor, but he continued to receive reports from the laboratory as it remained open. The economics of coal conversion did not improve over time.