The company trying to make Powder River Basin coal more valuable has cleared air quality permitting to place their test facility at an old mine site just outside Gillette.
Clean Coal Technologies’ founders argue that they’ve cracked the code on drying treatments, which could take Wyoming’s rather wet coal and turn it into a desiccated product that burns hotter.
Higher heat value could boost the price of Powder River Basin coal, which is largely burned in power plants to produce electricity. If the drying treatment is sustainable over time, it may help Wyoming coal reach the promised land: Asian markets.
Right now, Clean Coal Technologies is operating at a testing level, rather than a commercial venture. The plant in Gillette will be able treat 2 to 3 tons of coal per hour. But with the support of the University of Wyoming, and the test site in Campbell County, the business hopes to license its technology for a commercial-scale project shortly, which would up the ante to 20 to 30 tons of coal per hour.
“No buyer, whether they be us, international or from Mars is going to build a test facility that costs $30, $40, or $50 million unless they’ve seen their coal run through a facility which is just a scaled down version of what the commercial version would look like,” said Robin Eves, CEO of Clean Coal.
Eves said there are four to five potential buyers from overseas sending 500 tons of coal each to be tested in Gillette later this fall. With permitting cleared, the Clean Coal Technologies plant should be up and running within four months, he said.
Powder River Basin coal’s advantage over the last few decades has been that it is cheap to mine and has less sulfur content than other coal regions of the U.S. Its main use is as fuel for electricity plants. The downside, however, is that Wyoming’s coal is not that hot. Its British thermal unit value is in the 8,400 to 8,800-range.
Clean Coal technology can raise that heat value significantly, to 10,000 Btu and, in some rare case 12,000 Btu, Eves said.
The University of Wyoming’s School of Energy Resources is supporting Clean Coal Technologies, not financially, but with its long history of research and development of Wyoming coal, said Richard Horner, Director of Emerging Projects & Technology. The tech fits into Wyoming’s goals in a couple ways. The most obvious is new markets.
Clean Coal Technologies has produced something “highly promising” for Wyoming, he said.
U.S. coal future is unstable at best as plants continue to retire early to be replaced by cheaper natural gas generation.
Wyoming is highly reliant on its coal industry for jobs and revenue. The state has spent considerable time and money trying to advance other uses of coal or improvements to coal, both through the University of Wyoming and the state’s Infrastructure Authority. The true prize of this work would be finding a willing buyer of Wyoming coal for many years to come, offsetting losses in the U.S. as coal plants shutter.
But to get to Asia, the treatment must be proved to last for long periods of time and in wet environments – like the hull of a ship, Horner said.
“These are the questions that consumers are asking,” he said. “We need to have conclusive proof that the coal in very large volumes is able to survive the transportation and more importantly doesn’t spontaneously combust at some point either in its transport or in storage at the other end of its journey.”
Wyoming has not yet been able to get its coal to Asia, though it has courted buyers for years. The economics simply don’t work. Distance will continue to play a depressing role in Wyoming’s potential to export, Horner said.
“There is still a big risk,” he said. “Even if you are able to do it, you have to have access to those markets.”
The other potential of Clean Coal Technologies is what can be done with the waste products. The drying process removes organic material that could be used as feedstock for chemicals or other products.
“It’s really like crude oil,” Eves said. “You don’t burn raw crude oil, so why burn raw coal?”
Clean Coal Technologies floated its intentions to move the test facility to Wyoming in early 2017.
Not long after a potential commercial plant using the technology was proposed for the Gillette area.
Wyoming New Power, a group of investors, has expressed interest in licensing Clean Coal’s technology and building facility to commercially upgrade Wyoming coal.
The group was looking for about $80 million in financing, with a partnership of investment bank Piper Jaffray as of last summer. The investors approached Campbell County in November to request federal tax advantages that are available to the county, but local officials did not approve that request.
One of the investors, Patrick Imeson, of Black Diamond Holdings in Denver, said the project is in a holding pattern right now, but that they remained hopeful to make gains in the near future.
“We need to make sure that we are 100 percent commercial,” said Imeson. “Until we get to the next step here, everybody is kind of on standby.”
Wyoming New Power had considered the old Two Elk site outside Gillette, a place that comes with a bad legacy in Wyoming. Once promised as a new coal venture to use waste coal, Two Elk’s plans eroded over a twenty year period. The developer is facing sentencing for defrauding the federal government June 20.
Drying coal is not a new concept in Wyoming, but previous developers failed to sustain the coal treatment over time.
Eves said his company has crested that hurdle.
“There have been a lot of promises made,” he said. “I think when we first said we have a technology we’re going to move to Wyoming, people said ‘Yeah, we’ve heard that before.’”
Clean Coal differs because it works, he said, but also because it has not come to Wyoming or its university seeking money.
Clean Coal Technologies, meanwhile, is eyeing the site of its pilot project at the former Fort Union mine as a potential site for their own commercial scale facility.
Eves said the company was only in very early consideration of such an idea, but the site would be suitable.