Company withdraws application for coal mine

"They're trying to hide their connections," said Frank Hurt of rural South Heart. "We don't trust them."

Great Northern Project Development is planning the gasification plant and GTL Energy the coal-drying plant, both near South Heart. Great Northern also owns half of South Heart Coal, which had applied for a state permit for a small coal mine that would have provided coal for testing at the GTL plant and other facilities. Great Northern said it is withdrawing the permit application for the mine.

The Dakota Resource Council, an environmental group, and three South Heart couples, including Frank and Lucy Hurt, had challenged the conclusion last summer of a state regulator that the GTL plant was separate from South Heart Coal's proposed mining operation and did not require a state permit to build.

Houston-based Great Northern said that the mine permit area now will be included in the application for a larger coal mine that South Heart Coal will build to feed Great Northern's proposed South Heart Energy synthetic natural gas plant.

"Withdrawing our small mine application will help keep the South Heart Energy project and GTL Energy's (coal-drying) demonstration plant both moving forward as scheduled," said Rich Voss, vice president of Great Northern Project Development.

He said the gasification plant will include its own coal-drying technology, and that the GTL Energy plant will get its coal from other sources "local, national and international."

Robert French, chief executive of GTL Energy, said the plant would not have been reliant on the small coal mine anyway.

"We appreciate Great Northern's action of withdrawing its small mine permit to help demonstrate that our (coal-drying) plant is not operationally or financially dependent on any single source of coal," French said. "This should resolve any remaining issues brought before the (Public Service Commission) by the Dakota Resource Council."

Jim Deutsch, director of the PSC's reclamation division, said the effect of the coal mine permit withdrawal might not be so clear-cut.

"I don't know what this does to the complaint that the Dakota Resource Council and landowners have filed," he said. "We'll have to study that more."

Opponents said they are pleased with the withdrawal of the mine permit application but still worried about the coal-drying plant under construction.

"It's a great big ugly eyesore looking over the hill at us," Hurt said.