Ohio Citizen Action

Baard Energy CEO John Baardson speaks to the World Coal-To-Liquids Conference in Washington, DC, March 2009, the same month he withdrew his application for U.S. Department of Energy loan guarantees.

COLUMBUS — On December 22, 2008, John Baardson, CEO Baard Energy, analyzed the prospects for financing a coal refinery in Wellsville in a loan guarantee application to the U.S. Department of Energy:

Debt markets in chaos

In today’s environment, there is no debt available to projects like Ohio River Clean Fuels [the coal refinery]. Debt markets are essentially closed to all large-scale project finance companies, even without considering the technology integration risk. Until debt markets markedly improve, the prospects for raising commercial debt for Ohio River Clean Fuels are dim. It is unclear when conditions will improve.

Equity requires assurances that debt will be available

Our discussions with potential equity investors indicate that “forward funding risk” is paramount to them right now. Equity investors are reticent to invest in the early stage of projects because of the risk that commercial debt markets will not be open or won’t be reasonably priced when the time comes to obtain construction financing. A U.S. Department of Energy loan guarantee mitigates this risk and will enable Ohio River Clean Fuels to secure equity sooner and on more reasonable terms.

[On February 25, Wellsville Area Chamber of Commerce President Randy Allmon] said [Baard President Steve] Dopuch asked the chambers to have their members send letters to President Obama, urging him to support the coal-to-liquid fuel plant. Copies of the letters were distributed to members… [the letter] notes that Baard Energy is ‘fully permitted for construction in Wellsville, Ohio,’ but needs a Department of Energy loan guarantee.

- Paul Ryder, Organizing Director, Ohio Citizen Action

COLUMBUS — “Baard Energy says its proposed coal-to-liquid refinery for Wellsville will help the United States become more more energy independent. Sounds great, but the arithmetic doesn’t work. Let’s start at the refinery level. Typically, for every one ton of coal fed into a refinery using this technology, two barrels of liquid fuel come out the other end, according to a U.S. Department of Energy study. The Baard Energy proposal is no exception. They say they will use 9.3 million tons of coal a year to produce 53,000 barrels a day of liquid fuel. That works out to 2.08 barrels per ton of coal.

Now back to energy independence. Imported crude oil is about 60% of U.S. consumption. What would it take, using the coal-to-liquids technology, to displace just 10% of U.S. oil consumption? It would require a 42% increase in U.S. coal production, or 475 million tons more coal every year, to run these refineries, according to a report by the Natural Resources Defense Council.

This is simply not going to happen. People will not stand for it,” Paul Ryder, Organizing Director, Ohio Citizen Action.

COLUMBUS — “It would help neighbors in Wellsville and the surrounding area to know what a plant like Baard Energy wants to build looks like in real life. Here is one, in Secunda, South Africa, that uses the same technology Baard plans to use.

If this looks like a refinery, its because that’s what it is. The name ‘Ohio River Clean Fuels Coal-To-Liquids Facility’ was chosen to avoid having to call it a refinery. A ‘refinery’ is defined as ‘an installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons, and oxygenates.’ Coal is a hydrocarbon, and the Baard plant is a refinery,” Paul Ryder, Organizing Director, Ohio Citizen Action.

Continue reading Baard Energy wants to build an “Ohio River Clean Fuels Coal-To-Liquids Facility” in Wellsville. What is that? What would it look like?

The Baard Energy Company of Vancouver, Washington, wants to build a $6.8 billion coal refinery in Wellsville, on the Ohio River.

The last thing Ohio needs is another expensive, polluting coal plant

Baard Energy calls its plant the “Ohio River Clean Fuels Coal-To-Liquids Facility.” That’s misleading: there’s nothing clean about it. It will be a filthy belching refinery. A “refinery” is defined as “an installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons, and oxygenates.” Coal is a hydrocarbon, and the Baard plant is a refinery.

Washington, Baard Energy’s home state, has a total of one coal plant. Ohio already has 27 coal plants within its boundaries, and more on the other side of the Ohio River. The third largest Ohio coal-fired power plant, the 2,316 megawatt W.H. Sammis plant in Stratton, and one of the largest hazardous waste incinerators in the world, the Waste Technologies Industries facility in East Liverpool, are both within 10 miles of the proposed coal plant.
The Baard coal refinery would require 9.3 million tons of coal a year, or 186 million tons over 20 years.

Here is what Ohio EPA permits would allow the proposed Baard coal refinery to put into our air every year:

Source: Ohio EPA permits for the proposed Baard coal plant in Wellsville, Ohio, compiled by the Natural Resources Defense Council. The permitted emissions do not take into account possible flaring due to process upsets or emergencies, when pollutants may be sent out untreated. Of the permitted pollutants, many emissions would be concentrated in start-ups and shut-downs at the facility. Hazardous air pollutants are a group of 25 pollutants regulated under the Clean Air Act. They include lead, formaldehyde, and solvents such as benzene. “Particulates (PM 10)” is a subset of “Particulates total”, but are reported separately.

The soot Baard Energy plans to emit can cause shortness of breath, aggravate asthma and bronchitis, increase susceptibility to respiratory infections and heart attacks or even premature death in people with heart and lung disease. The refinery would straddle the border of Columbiana and Jefferson Counties, an area that already violates public health standards for soot.

Why should neighbors in Columbiana and Jefferson Counties be subjected to another major source of air pollution?

Prices for the kind of coal Baard says it will use have risen sharply due to increased exports. If Baard Energy adds another 9.3 million tons a year to demand, that will push coal prices higher, and that means higher electricity costs.

This coal refinery would be a potential new market for mountaintop removal coal

Baard Energy wants to burn 9.3 million tons of coal a year in its proposed coal refinery. Where would it come from? Baard Energy won’t pin itself down to an answer, except that it will be “bituminous” coal. This kind of coal can be found from Pennsylvania to northern Alabama, with the heaviest concentrations in West Virginia and Eastern Kentucky, and in Illinois, Colorado and Utah. That’s a very large area, centered on the region where mountaintop removal is underway.

Mountaintop removal is a radical form of coal mining where mountains are literally blown up — devastating communities throughout Appalachia, polluting drinking water and destroying rivers. So far, 500 Appalachian mountains have been destroyed by mountaintop removal. Reclamation is not possible.

What is certain is that the biggest supply of coal with easy Ohio River access to the proposed Baard coal plant is West Virginia, where the worst mountaintop removal coal mining is going on.

Why would we want to give mountaintop coal mining a new market?

The origin of the coal-to-liquid process
The Baard Energy company plans to use a technology developed for use in World War II. In the 1930s, Hitler prepared Germany to fight a world war with no secure supplies of oil. The solution was to make oil from coal, using the Fischer-Tropsch process at 13 synthetic fuel plants. After 1944, when oil supplies from Nazi-aligned Romania were bombed out, Luftwaffe planes flew, and the Reich tanks rolled, almost exclusively on coal-derived gasoline.

In 1944, U.S. bombers destroyed this synthetic fuel refinery at Zeitz, Germany, just south of Leipzig, which had produced liquid fuel from locally available brown coal since 1938. In 1955, apartheid South Africa began to experiment with the Fischer-Tropsch coal-to-liquid process, and greatly increased its use as international sanctions for apartheid rule escalated.

Environmental and Economic Problems

• Fact Sheet on Baard Energy’s Coal-to-Liquids Facility, Natural Resources Defense Council, undated.

Background

• Perspective on Cleaner Coal, U.S. EPA, October 24, 2006.
• Producing Alternative Transportation Fuels from Coal and Biomass in Wellsville, Ohio, Ohio River Clean Fuels, December 12, 2006.
• Baseline Technical and Economic Assessment of a Commercial Scale Fischer-Tropsch Liquids Facility, U.S. Department of Energy, April 9, 2007.
• Project Summary, Coal and Biomass to Liquids, 53,00 barrels/day plant, Wellsville, Ohio, Ohio River Clean Fuels, LLC (Baard Energy),July 10, 2007
• Transcript, Public Hearing, Draft Permit to Install at Ohio River Clean Fuels, Wellsville, Ohio, Ohio EPA, September 10, 2008.
• Response to Governor’s Questions, Baard Energy, November 17, 2008.
• Loan Guarantee Application to Department of Energy, Part 1, Baard Energy, December 22, 2008, Part 2, Part 3, Part 4.