Carbon County anxious to get coal-to-gas plant

Associated Press Published: September 5, 2012

CHEYENNE, Wyo. (AP) — Carbon County officials say they're optimistic that a Texas company will follow through on plans to construct a plant to turn coal into gasoline by 2016.

"For the most part, most people are very positive about it, as we need jobs and tax money," Carbon County Commission Chairman Terry Weickum said Wednesday.

The Carbon County Commission early this year passed resolutions in support of issuing bonds to help finance the plant, slated to be built at Medicine Bow, a town about 100 miles west of Cheyenne.

Robert Kelly, chairman of DKRW Advanced Fuels of Houston, announced last week that his firm has contracted with China-based Sinopec Engineering Group to build the plant. Plans call for processing coal mined underground at the site into gasoline, which mainly would be piped to the Denver market.

Kelly said Wednesday he expects to line up bank financing for the project by the end of the year but could ask the state of Wyoming to invest if necessary.

DKRW had asked the state of Wyoming last year to purchase up to $300 million in industrial revenue bonds to help finance the $2 billion project. The Wyoming Business Council responded that it would require the Idaho National Laboratory to review the company's plan before recommending any state investment.

While coal-to-liquids plants have been built elsewhere in the world, Kelly has said his project would be a natural for Wyoming, the nation's leading coal producing state.

"Where do you want to get your oil from? Where do you want to get your gas from?" Kelly asked state lawmakers earlier this year. "Do you want to get it from Iran? Do you want to get it from Venezuela, or do you want to get it from Wyoming?"

Kelly also has emphasized that coal-to-liquids technology can produce high-value products in an environmentally responsible way. "It can add substantial value to the coal business, and that's why I think it should be done," he said earlier this year.

Kelly said Wednesday his firm is working now to line up more than $1 billion in commercial bank funding. "We need to line that up first, and then make a decision on whether we need to pursue the other options, which include the tax exempt bonds and the industrial development bonds," Kelly said.

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