Wyo. coal-to-liquids plan moves forward
Sinclair Oil Corp. has entered a long-term contract to market “ultra-low-sulfur” diesel fuel derived from a coal-to-liquids plant still in the planning stages in Wyoming.
Medicine Bow Fuel & Power LLC, a subsidiary of DKRW Advanced Fuels LLC, plans to build a coal-to-liquids processing facility in Carbon County with an output capacity of 13,000 barrels per day. Sinclair has agreed to market the fuel in the Rocky Mountain region.
“We believe this agreement for the long-term supply of (an) … ultra-low-sulfur diesel product is the first of its kind,” DKRW Advanced Fuels’ COO Jon Doyle said in a prepared statement. “This contract is another important milestone in Advanced Fuels’ strategy to complete the financing and construction of our flagship project.”
The Medicine Bow facility will use General Electric Co.’s coal gasification technology to produce a synthetic gas from which nearly all the sulfur and carbon dioxide can be removed, according to DKRW. The “syngas” is then liquefied using the Fischer-Tropsch technology, which DKRW has licensed from Rentech, Inc.
The process significantly reduces greenhouse gas emissions compared to conventional oil refining, and it also derives a cleaner liquid transport fuel from coal — the single largest domestic fossil fuel resource. The U.S. Department of Defense has expressed keen interest in coal-to-liquid process to fuel its defense fleets.
Construction on the Medicine Bow plant is scheduled to begin this year, with an opening date of fourth-quarter 2010. DKRW has also contracted with Arch Coal Inc. for coal supplies from Arch’s Hanna mines.
Sen. Craig Thomas, R-Wyo., joined representatives of Sinclair and DKRW during a press conference on Friday to announce the deal. Thomas advocated for federal support for such coal technologies in the Energy Policy Act of 2005.
“The Energy Policy Act of 2005 recognized the role coal-to-liquids production will play in meeting our future fuel needs. It is important that those provisions be fully implemented and supported by the federal government in a timely fashion,” Thomas said.
