First coal-to-liquids plant to be built in West Virginia

BENWOOD, WEST VIRGINIA - State, Congressional and a slew of other public and industry officials gathered to announce a project that will help propel West Virginia to the forefront of national energy leadership: The construction of the nationÂ’s first modern coal-to-liquids plant.

“It’s clearer than ever that one of the biggest issues our state and country faces is meeting our energy needs,” Gov. Joe Manchin said. “Technological solutions like this plant at Benwood will lead to more environmentally friendly ways to use our coal and hold the key to America’s energy security.

“I am committed to making West Virginia the leader in clean coal technology and the construction of clean coal power and fuel liquefaction plants. We have the resources and expertise to realize our goal.”

Senator Jay Rockefeller said the project will give West Virginia an opportunity to show the world that the state is a global leader in energy issues and modern coal technology. “We are in the midst of a serious energy crisis in America. Today, with this project and others in the works, West Virginia is announcing to the world that we're not waiting around anymore,” Rockefeller said.

“We’re getting started with a CTL plant that will create jobs, meet modern environmental standards and develop our most abundant domestic resource - coal. This plant will help put our state and our country on the path to energy security and greater economic growth.”

Senator Robert C. Byrd said, “America cannot meet its energy needs. West Virginia has the coal, the brains, and the determination to meet that challenge and demonstrate to the world that we intend to be part of the solution.”

CONSOL, the nation’s largest producer of bituminous coal, and Synthesis Energy Systems (SES), a global industrial gasification company, intend to develop through a joint venture, their first U. S. coal gasification and liquefaction plant in West Virginia - an $800 million investment. The boards of directors of CONSOL and SES have authorized funds for development activities, including the front-end engineering design (“FEED”) package. Each member company will contribute equally to this phase of the project. CONSOL and SES have formed Northern Appalachia Fuel LLC (NAF) as the company through which the development will occur.

“This project has the potential to transform West Virginia from a major coal-producing state to a national energy center as well,” said J. Brett Harvey, president and CEO of CONSOL Energy. “By converting some of our region’s abundant, high-Btu coal into gases and liquids, not only will we create economic value for the state, but we will help West Virginia become the linchpin of American energy security,” Harvey said.

Tim Vail, president and CEO of SES, said he is proud of the progress toward development of the plant and that they appreciate the state’s and Regional Economic Development Partnership's (RED’s) support. “Together with our partner, CONSOL Energy, we will be taking a first step toward securing energy independence in the U.S. as we convert raw and residual coal from CONSOL’s Shoemaker mine and plant into gasoline in an environmentally responsible and cost-efficient manner.”

The FEED will include a carbon management strategy that will focus on carbon sequestration in a deep saline aquifer. At a later date, NAF will file for environmental and other permits necessary for the construction of the plant.

CONSOL and SES propose to site the plant near Benwood in Marshall County on a brownfields redevelopment site. The plant is expected to be a “mine mouth” facility with feedstock supplied directly from CONSOL’s nearby Shoemaker complex. The feedstock will be a blend of run-of-mine coal and coal otherwise not recovered in the normal preparation process.

Don Mason, president of the Marshall County Commission, said this investment will help to stabilize the region’s economy for years to come. “We want to thank Consol, SES, the City of Benwood, the State of West Virginia and RED for their foresight and commitment to this project,” Mason said.

Coal will be converted to synthetic gas using SES proprietary technology. The syngas would be used to produce about 720,000 metric tons per year of methanol that can be used as a feedstock for the chemical industry. Officials expect the project will be capable of converting methanol to about 100 million gallons per year of 87 octane gasoline. NAF is negotiating with ExxonMobil Research and Engineering to license their proprietary methanol-to-gasoline technology. As envisioned, the project will include a river terminal facility, where products will be stored in tanks for off-loading into barges for ultimate delivery.