Despite the economic downturn, plans are still moving forward for a coal-to-liquids plant in Carbon County under development by Medicine Bow Fuel & Power LLC, a subsidiary of DKRW Advanced Fuels LLC.

"At the time we decided to move forward on this, oil was half of what it is today," DKRW chief executive Jon Doyle told a state legislative committee in Casper on Wednesday. "The issue today is not, 'Is there money?' It's the confidence of banks about where do they put that money?"

DKRW launched its Wyoming plans in 2004, choosing a location near Medicine Bow adjacent to a mineable coal resource owned by Arch Coal Inc., now an investment partner in DKRW.

Construction of the project could attract as many as 1,000 workers, and the facility would add 400 full-time jobs once operational. The plant would consume about 3 million tons of coal annually to produce 18,000 to 20,000 barrels per day of 87 octane gasoline, presumably offsetting a portion of oil imports.

Doyle said the company hopes to receive an air emissions permit from the Wyoming Department of Environmental Quality by year's end. However, the in-service date was recently pushed from 2010 to 2013.

"I'd say the current climate is very difficult," Doyle told lawmakers. "I think the fundamentals of this industry and future oil prices and the ability to bring future technologies for transport fuels and synthetics is ripe. But the slowdown is causing problems as far as focus."

Doyle said DKRW plans to go to the investment market with the project late in 2009.

Projects on the scale of $2 billion to $3 billion dollars require a tremendous lead time. Since 2004, DKRW has worked to build value in the Medicine Bow project by piecing together the fundamentals of a complex coal refining operation.

One of the first steps was to secure a fuel feedstock, which DKRW did in a deal with Arch Coal. That agreement secures a steady coal supply from Arch's Saddleback property and gives DKRW an option to buy.

Doyle listed a number of other license agreements that gives value to the project and assurances for investors:

- A license with General Electric to convert coal to synthetic gas.

- A license for separating and cleaning up the coal byproducts.

- A license with an industrial oxygen supplier as a feedstock for the coal-gasifier.

- A license for technology to convert the synthetic gas to methanol.

Doyle said DKRW also has completed a report to the state to drill four water wells for the operation, and said the company has a 25-year contract in place for 100 percent of the plant's gasoline product, which will go to a client in the Rockies.

Doyle said Wyoming is also particularly attractive for such a project because there's a huge demand - and a huge capacity - for the CO2 byproduct: enhanced oil recovery.

"What banks are looking for from us is assurance that it will run," said Doyle.

Contact energy reporter Dustin Bleizeffer at (307) 577-6069 or dustin.bleizeffer@trib.com

Here's a look at the Medicine Bow Fuel & Power project:

Who: DKRW Advanced Fuels LLC

What: Coal mine and coal gasification and liquefaction plant

Output: 18,000 to 20,000 barrels per day unleaded 87 octane gasoline, products, and up to 350 megawatts

Fuel: 3 million tons of coal per year

Location: Near Medicine Bow, Carbon County

Timeline: Completion date moved back from 2010 to 2013

Cost: $2 billion to $3 billion

Employment: Up to 500 full-time jobs

Status: In the development and engineering phase]]>