Energy Law Update: Draft Air Permit for Coal-to-Liquids Plant Issued by WV DEP
On Tuesday, October 27, 2009, the West Virginia Department of Environmental Protection (WV DEP) announced that it was issuing a draft permit to construct for air emissions from a coal-to-liquid gasoline plant - the first permit of its kind in the country - to New York-based TransGas Development Systems, LLC (TransGas). The proposed $3 billion TransGas plant, to be located in Mingo County, West Virginia, would use up to 3 million tons of locally-mined coal to produce more than 6.5 million barrels of gasoline each year by converting the coal to methanol, and using the methanol-to-gas process to produce gasoline.
Assuming that financing is available for the project, construction of the plant is expected to begin in 2010. The construction could take nearly 3 years, and it could generate as many as 3,000 new jobs. Once the facility is fully staffed, it would employ approximately 250 people. To assist in financing the project, TransGas could receive 20% of its capital investment (or $600 million) in tax breaks under West Virginia's economic development incentive programs.
The proposed plant would be "carbon-capture ready" - meaning that the design of the plant allows for the capture of carbon dioxide (CO2) emissions, even though the company has no current plans to capture, sequester, or destroy those emissions. While the plant will recycle a portion of its carbon dioxide emissions back into the manufacturing process, the remainder -which, according to one unconfirmed report, could be as much as 3.6 million tons of CO2 each year - is still expected to be released into the atmosphere. There are no limits on CO2 emissions in the permit as there are no applicable state or federal regulations on CO2 emissions at the present time. TransGas's spokesman, Aaron Daley, says that if and when regulations require TransGas to control its CO2 emissions, TransGas will be able to be fully compliant with such requirements. One possibility for controlling TransGas's CO2 emissions is to use pipelines to transport them to Texas for storage.
The 41-page draft permit is open for public comment through November 30, 2009.
Robert D. Pollitt
Chase Tower - Eighth Floor
707 Virginia Street E.
Charleston, WV 25301
304-353-8137
robert.pollitt@steptoe-johnson.com
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