Letter backs coal plant tax credit

The three Wyoming members of Congress joined forces to request that the Treasury Department approve an application giving a company $350 million in investment tax credits to build the planned Medicine Bow Fuel and Power coal-to-liquids facility.

Republican Sens. Craig Thomas and Mike Enzi and Rep. Barbara Cubin sent a letter to Treasury Secretary Henry Paulson urging him to approve the tax credits for Houston-based DKRW Energy LLC, the company planning the estimated $1.3 billion project.

”Wyoming has abundant natural resources that can further increase the independence of sourcing petroleum products in the United States, and this program is important to developing those resources for the benefit of both the state and the country as a whole,” the trio wrote.

The project would expand U.S. refinery capacity, produce products to reduce air emissions, sequester carbon dioxide, produce more oil and increase the tax base and employment in the state, the letter said. It encouraged the department to give ”due consideration” to the application filed by the Medicine Bow project.

Dale Groutage, a Democrat who is challenging Thomas for his Senate seat, has said while campaigning that for the past 20 years the federal government has been subsidizing the construction of these types of plants, but none has been built in Wyoming. He said bringing such a plant to the state would be one of his first priorities if elected.

The facility initially would produce about 11,000 barrels per day of liquid hydrocarbons, mostly ultra-low-sulfur diesel to be sold as fuel in the Rocky Mountain region.

Production could expand to 33,000 barrels per day, and the project in the long run would create 300 to 500 high-tech jobs in mining and refining, a DKRW executive has said.

The coal-to-liquid technology converts coal into a synthetic gas which is then either available for use or to be converted into materials such as diesel fuel.

A coal project tax credit and a gasification credit were included in the Energy Policy Act of 2005, which the delegation supported.

Medicine Bow Fuel & Power LLC recently awarded a contract to Canadian firm SNC-Lavalin to perform feasibility, engineering and design services for the facility.

GE Energy and Rentech Clean Energy Solutions will provide the technical process for converting coal to liquid hydrocarbons, and Arch Coal will supply the coal. The plant would be located at Arch Coal’s Hanna mine facility in Carbon County.