DUSTIN BLEIZEFFER Star-Tribune energy reporter | Posted: Sunday, February 26, 2006 12:00 am
NewsTracker
* Last we knew: Wyoming officials are trying to overcome altitude and transmission challenges to bringing coal gasification and coal-to-liquids process to the state in hopes to boost local economies.
* The latest: GE Energy Gasification is developing a process that could make Wyoming coal an economic feedstock for its gasification process.
* What's next: Wyoming and industry officials will continue to work toward developing a coal benefaction project here.
GILLETTE - A measure that could provide up to $62.4 million in sales and use tax relief for coal derivative processes has had favorable support from legislators.
House Bill 61 is headed to the Senate after gaining approval from the House and the Senate Minerals Committee. However, it's uncertain whether a measure will survive that would give the University of Wyoming $4 million to aid in research to make coal benefaction processes economical at Wyoming's altitude.
Rob Hurless, energy and telecommunications adviser to Gov. Dave Freudenthal, said incentives will be well worth the investment in order to land a new industry that could bring thousands of new jobs.
"The economics are going to be critical," said Hurless, noting that several states are offering various financial incentives to attract clean coal projects.
"I think, generally, people understand if we're going to compete in the game, this is one of the things we need to have at our disposal," Hurless said.
Encouraged by forecasts of continuing high natural gas and oil prices, many coal-producing regions of the United States consider resurging interest in "clean coal" construction as an opportunity to boost their local economies.
The capital-intensive work of building a new coal gasification or coal-to-liquids plant can involve billions of dollars and brings with it hundreds of new "high-level" jobs. President Bush's Clean Coal Power Initiative includes some $2 billion to help energy companies build demonstration plants for various coal benefaction processes.
So far, Wyoming doesn't have a piece of the pie. But energy officials here are encouraged by signals in the clean coal industry, such as General Electric's nod to Wyoming's giant presence in the coal market.
"GE is a smart company, and they're looking at the coal market. It would not make sense to invest in this process and ignore the Powder River Basin," Hurless said.
Hurless said he believes GE will have an announcement regarding its work with Wyoming coal sometime this summer.
In the meantime, Hurless and others are urging the Legislature to approve the sales and use tax incentive as well as measures that will help UW partner in coal development projects.
GE's coal gasification process will be employed at the Taylorville Energy Center in Illinois, where the ERORA Group received some $5 million in public-private financing to help build the plant.
The state of Pennsylvania has promised to buy one-third of the fuel produced from another coal-to-liquids plant for its vehicle fleet. The plant is estimated to bring 1,000 construction jobs and 600 permanent jobs.
The company planning to build that plant, WMPI Pty. LLC, was the first-round recipient of the president's clean coal initiative to the tune of $100 million.
WMPI is not unfamiliar with Wyoming.
John Rich, president of WMPI, said he's keeping a close eye on Wyoming's efforts to attract the industry.
"I was out there and I met with your governor, and yeah, you guys are behind the times. But you're catching up quickly," Rich said.
To help make coal-to-liquids economical, Pennsylvania passed an "ultra clean fuels" tax credit about nine years ago. The Pennsylvania Legislature is also considering a 28 percent investment tax credit called the "Foreign Oil Displacement Act."
"Here's an opportunity to create quality jobs and not just dig coal and separate it in a prep plant, but a value-added process," Rich said.
Coal-producing states such as Wyoming may not have to extend incentives as far as some Eastern states have, however. Rich said high oil prices are driving investment interest in clean coal technologies further than ever before.
"There is interest in the Powder River Basin and the low-cost coals that you have out there," Rich said.
Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dustin.bleizeffer@casperstartribune.net.