WY Asks National Lab to Review Coal Plant

The Wyoming Business Council has asked the Idaho National Laboratory to review a private company's plan to build a coal-to-gasoline plant in Carbon County.

CHEYENNE, Wyo. (AP) — The Wyoming Business Council has asked the Idaho National Laboratory to review a private company's plan to build a coal-to-gasoline plant in Carbon County.

DKRW Advanced Fuels has asked Wyoming to purchase up to $300 million in industrial development bonds to help finance the $2 billion project

The company intends to build the plant near Medicine Bow, a town of some 300 people about 100 miles west of Cheyenne.

Robert Kelly, chairman of Texas-based DKRW, stated in the company's application that construction could begin next year and be completed by 2015. He said it would use a proprietary process to transform coal mined underground at the site into 10,600 barrels of gasoline per day to serve the Denver market.

In an interview Monday, Kelly emphasized the project's technology is licensed from energy industry giants Exxon and General Electric and has been proven at industrial sites around the world. He said he welcomed the Idaho National Laboratory review.

Tapping the nation's massive coal reserves to help quench its thirst for gasoline is critically important, Kelly said. It's only natural that Wyoming, the nation's leading coal-producing state, should invest in the project, he added.

"Where do you want to get your gasoline from? ... Do you want to get it from the Middle East? Do you want to get it from Canadian oil sands?" Kelly asked. "Or you want to get it from the U.S. with U.S. jobs? Why not us?"

Kelly said investors have put in $100 million for the project so far. He said DKRW is eyeing private and public funding sources for the rest of the money and said the project will proceed regardless of Wyoming's financial support.

The U.S. Department of Energy in 2009 notified DKRW that the project had cleared preliminary review to qualify for a $1.75 billion loan guarantee. Kelly said there's been no recent progress on that.

The Obama administration's support for alternative energy projects has been under increasing fire from Republicans since California solar panel maker Solyndra LLC filed for bankruptcy court protection in September. The company, which received a $528 million federal loan and was touted by the Obama administration as a green jobs creator, cited low panel prices as responsible for its troubles.

In addition to asking Wyoming to purchase up to $300 million in industrial development bonds, DKRW has asked Carbon County to endorse the issuance of other tax-exempt bonds totaling $245 million. Repayment of the tax-exempt bonds would be guaranteed by the project itself without the county or the state being financially responsible for them.

The Carbon County Commission on Tuesday voted to delay action on DKRW's request until its lawyer can review the matter.

Michael Kelly, deputy Carbon County attorney and no relation to Robert Kelly of DKRW, said Tuesday all three county commissioners expressed strong support for the project. But the lawyer said the commissioners didn't sign the bond resolution because the county had received some documents only the day before. He said the commission could act on the resolution as soon as Jan. 3.

Robert Kelly of DKRW said Monday he's hopeful the state can finish its review of the project and endorse purchase of the industrial development bonds before the Legislature convenes in mid-February. State purchase of over $100 million of the bonds would require legislative approval.

Mike Martin, manager of business finance at the Wyoming Business Council, said last week that DKRW will pay for the review of its plans at Idaho National Laboratory. He said it will cost over $130,000.

Martin said officials at the national lab intend to finish their review before the Wyoming legislative session but its completion date could depend on how fast it gets some additional information from the company.

Council staff then plans to make a recommendation to the council board. The proposal would then go to Gov. Matt Mead and possibly on to state Treasurer Joe Meyer.

"The final determinant will be me," Meyer said. "And unless the business council recommends it, I don't consider it."