In the heart of Columbiana county on the Ohio River, where steel blast furnaces came to a halt a few decades ago a unique project is reshaping the region. Washington based Baard Energy is building the only facility in the USA that will convert coal and biomass into liquid jet fuel and diesel. Estimated at $6 billion, the power plant is one of the top ten most expensive infrastructure projects in the world, Tracy Drake, project manager at Columbiana Port Authority, said.
After intense lobbying at the state and federal level, the company is seeking to have taxpayers guarantee billions of dollars in construction loans for the coal-to-liquid plant. Baard Energy also plans to lock in a 25 year contract to supply liquid fuel to the Air Force, which consumes roughly 2.4 billion gallons of jet fuel annually, according to a project summary prepared by the Ohio Environmental Protection Agency and the Army Corps.
“This is a fairly small company that plans to build a $6bn dollars plant with massive subsides from the taxpayers,” Fisk Shannon, an attorney with the National Resource Defense Council said.
Local officials, including the Ohio governor and Congressmen Charlie Wilson and Tim welcomed John Baardson, CEO of Baard Energy, with opened arms hoping the project will revive the economically dead area. “It’s critical, this project will have a tremendous impact on us locally and will lift a lot of people from poverty,” Drake said.
The company started talks with the Columbiana Port Authority in 2006 to acquire the plot of land for the construction of the plant. One year before it hired the public relations firm Locke Liddell Strategies to lobby the Congress and Department of Energy on coal to liquid fuel. Since 2005, Baard paid Locke Liddell more than $820,000 over a 3 years span. “It was a very difficult process, but we managed to get all the permits needed,“ David Distefano one of the lobbyists said. With his partner Roy Coffe, a former legislative aide to Gov. George W. Bush, Distefano also lobbied the Executive office of the President on “energy legislation pertaining to coal to liquids.”
Baard was also hoping to secure a $2bn loan guarantee from the Department of Energy under the Energy Policy Act of 2005, that authorizes the DOE to provide 80% Federal Loan Guarantees to coal gasification and clean fuels production. However, several outstanding lawsuits have forced the company to pull out at the end of March of the Department of Energy’s loan guarantee program, arguing that the agency is considering the lawsuits as part of its risk assessment of the project.
It is still unclear how viable the project is without money from the federal government. A study published by M.I.T. in 2007 estimates that the construction of a synthetic fuel plant costs four times more than a petroleum refinery. It would cost $70bn to build enough plants to replace 10% of US gasoline consumption, the study shows.
