The Department of Energy will prepare an Environmental Impact Study (EIS) for the Indiana Gasification project. The DOE is a lead federal agency for the National Environmental Policy Act, or NEPA, review of the project and the lead agency in the preparation of the EIS. The DOE has requested the Corps of Engineers to prepare the EIS for the Indiana Gasification project to satisfy the NEPA requirements.

A meeting was held on December 3, 2009 to provide local residents an opportunity to comment on the proposed Indiana Gasification coal to substitute natural gas project.

On November, 2009, the DOE issued a notice of intent to prepare an EIS for this project. The scope and comment period officially ends on December 14th, 2009.

During the review of the project the DOE will assemble information from a variety of sources including the applicant, the public, other state, local and federal agencies and their own independent analysis.

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Applications For DOE Loan Guarantees Are Turned In

The Air Force has been testing synfuels such as the Renjet(TM) synthetic jet fuel manufactured by Rentech, Inc. using a gasification and Rentech (TM) Fischer-Tropsch process. It was mandated by law EISA Section 526 that Federal agencies including the Department of Defense cannot purchase alternative synfuels unless the alternative fuels have lower GHG emissions than refined petroleum based fuels. Many organizations that oppose any use of coal applauded this law, because they thought it would be end of coal-to-liquids jet and diesel fuel for the U.S. Air Force.

The NETL conducted a comprehensive study of the GHG emissions for refined petroleum based fuels that considered the well-to-wheels life cycle of liquid fuel from crude feedstock from different sources. It evaluated on a well-to-wheels basis the three green house gases that are the result of petroleum processing: CO2, methane and nitrous oxide.

The NETL study demonstrates that the source of the crude feedstock is a significant factor for determining the quantity the wells-to-wheels GHG emissions. The data shows that when the sources of the feedstocks are taken into consideration, the GHG emissions vary significantly. Broad statements about GHG emissions from all refined fuels should not be made based on the characteristics for domestic crude oil such West Texas Intermediate.

The NETL study shows that coal-to-liquid fuel has lower GHG emissions than refined fuels that use feedstock from many foreign sources. The sources that contribute the most GHG emissions are Nigeria, Venezuela and the syncrude from the Canadian tar sands. Fuels from these sources of feedstock actually exceed the standards legislated by Section 526 and would not meet the test to be approved for purchase by the U.S. Air Force.

When the source of the feedstock is considered, coal-to-liquid fuels have a lower GHG emission profile. The GHG emissions for coal-to-liquid fuels is 5% to 12% lower than petroleum based fuels processed from many sources of import feedstocks.Liquid fuels derived from crude oil imported from Mexico, Venezuela, Angola and Canadian tar sands generate much more GHG emissions on a well-to-wheels basis than liquid fuel derived from coal gasification.

Syngest will gasify the cob and leave the corn to be used for food production. Syngest Inc. is using gasification technology to eliminate the use of the nutrient portion of a corn cob i.e. the corn kernels. With the ever increasing pressure to move away from using corn to produce ethanol, gasification specialists are experimenting with gasfiying the corn cob. The corn kernels would still be used a source of food, but the cob, long considered a waste product, is being considered as a feedstock for gasification.

Syngest has developed a gasification plant that will gasify corn cobs and produce ammonia as an final product. The SynGest Menlo plant will use 150,000 tons of locally supplied corn cobs per year to manufacture 50,000 tons of bio-ammonia annually, enough to fertilize 500,000 acres of nearby Iowa farmland under corn.

It’s an ideal situation. The fertilizer will be used to grow corn and the corn cobs will be used to produce fertilizer. This is a perfect scenario for proponents of sustainable engineering. Purdue University has been researching the use of corn cobs as a feedstock for gasification.

Tenaska announced that Burns & McDonnell was awarded a contract to perform the Front End Engineering and Design (FEED) for the Taylorville Energy Center project. The FEED study will include a cost estimate for the detailed engineering, procurement and construction (EPC) project phase.

Tenaska has not executed contracts with licensors selected for the project and expects to do so expeditiously now that the FEED contract has been awarded. The techology licensors must provide process design packages (PDP’s) for their licensed technology. As part of the scope of work for the FEED contract, it’s expected that Burns & McDonnell will develope an integrated plant design from the licensor’s data. An important deliverable from the FEED contractor is a project estimate – usually plus or minus 10% – that can be used to arrange construction financing.

The project estimate for the Taylorville Energy Center project must be submitted to the Illinois Commerce Commission and the Illinois General Assembly for approval since this project will impact the rates that Illinois residents pay for electricity. The cost estimate is forecasted to be approximately $3.5 billion and it’s expected that a cost estimate in this range will be approved.

The Taylorville Energy Center will use Integrated Gasification Combine Cycle (IGCC) technology to gasify Illinois coal and convert it to substitute natural gas (SNG). SNG is equivalent to natural gas and can be commingled and transported in existing natural gas pipelines. The majority of the SNG will be used to run GE gas turbines and produce electricity. The electricity will be distributed to the residents and businesses in Illinois. If, for any reason, the gas turbines cannot utilize all of the SNG that is produced, the excess SNG can be sold for natural gas and transported through natural gas pipelines.

Ohio River Clean Fuels LLC did not submit a Phase 2 application for the Department of Energy Loan Guarantee Program offered for coal power projects with carbon capture and sequestration. Baard Energy decided not to pursue DOE loan guarantees for the Ohio River Clean Fuels project due to lawsuits. Phase 2 applications were due March 23, 2009.Phase 1 loan guarantee applications were due December 23, 2008. Since Ohio River Clean Fuels issued a press release stating that they did not submit submit a Phase 2 application, it’s implicit that they did submit a Phase 1 application.

Baard Energy is the developer of the Ohio River Clean Fuels project. Baard issued a statement that a decision was made to drop out of the running for the DOE Loan Guarantee Program, because of lawsuits filed by the Sierra Club and the Natural Resource Defense Council. The Ohio River Clean Fuels project has received the necessary permits from the State, but the lawsuits challenge the legality of the permits.

According to Baard Energy, conversations with DOE officials after the Phase 1 application was submitted revealed that the DOE would consider the lawsuits when evaluating the project risk profile.

Based on this information, Baard Energy decided to drop out of the DOE Loan Guarantee Program and did not submit a Phase 2 application. The Phase 2 application includes a non-refundable application fee of $600,000 and, of course, there would be considerable cost to Baard Energy involved in producing the documentation required for a phase 2 application.

The Dakota Resource Council files a complaint with North Dakota Public Service Commission to halt the construction of the coal beneficiation plant for the South Heart Gasification plant. In January 2009, the Dakota Resource Council with other nearby landowners filed a complaint with the North Dakota Public Service Commission stating that the beneficiation plant under construction for the South Heart Gasification plant without a permit should, in fact, be required to apply for a permit per North Dakota law.

GTL Energy has begun the construction of the coal beneficiation plant with the understanding that it had a decision by the North Dakota Public Service Commission that a permit was not necessary. GTL Energy is the supplier of the lignite beneficiation process technology. The GTL beneficiation process will remove most of the water and creates a coal briquette.

The Dakota Resource Council along with several land owners is challenging both the gasification plant and the beneficiation facility. The Dakota Resource Council has sent a formal complaint to the Public Service Commission (PSC) stating among other things that the PSC was outside of the law of North Dakota to approve the construction of the beneficiation plant without issuing a permit. At issue is the definition of the beneficiation plant. If the coal beneficiation plant is considered to be an integral part of the coal mine, then it’s likely that the PSC will have to retract it’s approval and GTL Energy will have to seek a permit.

Great Northern Power Development and Allied Syngas are developing a coal gasification plant near South Heart, ND. The joint venture submitted an application to the Stark County Planning and Zoning Commission with a request to re-zone land near South Heart that was zoned for agricultural use to change the zone to industrial for coal mining.