Nation’s first waste-coal-to-diesel plant to be built
State creates consortium to purchase 40 million gallons of the fuel

Harrisburg, PA— Governor Edward G. Rendell said Pennsylvania is taking a frontrunner position in addressing the country’s dependence on foreign oil by supporting the nation’s first-ever waste-coal-to-diesel plant and creating a fuel consortium that will purchase nearly all of the cheaper, cleaner diesel fuel that will be produced at the Schuylkill County facility.

“Three years ago, I said we were going to do things differently in Pennsylvania. We were going to lead, not follow. Today we are delivering on that commitment with an innovative energy solution that will mean cleaner, cheaper diesel fuel, more than 1,600 jobs and the use of acres of waste coal that now threaten our environment,” Governor Rendell indicated. “We are going to ensure Pennsylvania has a long-term supply of clean, secure and affordable energy. Not only will Pennsylvania be the first state to build such a plant, we also will be the first state to use its purchasing power to lead a consortium to purchase some 40 million gallons of this Pennsylvania produced fuel.”

The Governor announced the creation of a fuel consortium that will purchase nearly the full output of cheaper, cleaner diesel fuel to be produced by the nation’s first-ever waste-coal-to-diesel plant planned for Mahanoy City, Schuylkill County. The plant, which is being built by Waste Management and Processors Inc. (WMPI) of Gilberton, Schuylkill County, will use waste coal to produce as much as 40 million gallons of clean-burning diesel annually.

Pennsylvanians now spend some $30 billion per year on imported energy fuels. However, using and developing home-grown energy sources and supplies has a multiplier effect in local and regional economies that can yield significant economic benefits.

Construction of the Mahanoy plant will create as many as 1,000 jobs. Operating the plant will produce another 600 permanent high-paying positions.

The company expects to break ground and start construction as early as spring of 2006. At the Governor’s direction, the state has worked with potential partners to ensure a long-term, viable market for this innovative project and others like it. The buyers’ consortium is led by the commonwealth and private sector businesses that include Worley & Obetz Inc. and Keystone Alliance, a fuel purchase group for the trucking industry. Nearly all of the plant’s output, which can be refined for use as diesel, jet fuel and home heating oil, is locked up in principle in purchasing agreements.

Recently, representatives from the U.S. Department of Defense (DoD) met with Governor Rendell and WMPI to discuss their interest in these fuels and the production facilities, which are much less vulnerable to attack or supply disruption.

The plant will be the first of its kind in the country and will use an energy source that otherwise would be a threat to the environment. Waste coal contributes to the problem of acid mine drainage, which is the leading water pollution problem in the commonwealth, and represents a public health hazard. Fires that ignite waste coal contribute to poorer air quality. Rural communities and small coal mining towns are plagued by scarred lands.

Aside from being cheaper, the plant’s diesel will be cleaner. The fuel will burn with no sulfur emissions — a contributor to acid rain and global climate change — and burn with a high level of energy efficiency, making it more economical for drivers. The plant will use state-of-the-art control technology in its manufacturing process to control air emissions.

In addition, the waste heat from making the liquid fuels will be used to generate 41 megawatts of low-cost electric power that will be fed into the grid, a concept known as polygeneration. The waste heat is enough to power more than 40,000 homes.

Pennsylvania has offered significant financial incentives to make energy manufacturing a cornerstone of the state’s economic future, including $47 million in tax credits for the development of this project. The U.S. Department of Energy has committed another $100 million in grants, and the recently passed federal energy plan singles out this project for a federal loan guarantee.