DEP approves coal-to-liquids plant

MORGANTOWN, W.Va. — The state Department of Environmental Protection has greenlighted construction of a coal-to-liquids plant in Mason County.

Domestic Synthetic Fuels says its plant will employ direct coal-to-liquids technology to convert coal and natural gas, using heat and pressure, into low-sulfur diesel and jet fuel, gasoline and other by-products. It will use about 23 million cubic feet of natural gas and 2,500 tons of coal per day to produce 451,500 gallons of fuel.

DSF plans to build the plant on a 200-acre industrial site north of Point Pleasant along the Ohio River.

DEP’s Division of Air Quality approved the permit on Thursday. DSF announced it Friday afternoon.

“I’d like to thank not just the DEP, but the community for coming out and supporting this project,” Kevin Whited, DSF lead developer, said in the announcement. “They live here. They turned out, and a lot of them spoke in favor of the facility.”

DSF projects the plant will employ 130 people and generate 130 new Kanawha County mining jobs. The $1.2 billion investment will gross $300 million per year and generate $11.5 million per year in annual payroll and benefits.

DSF said that this will be the first full-size direct coal-to-liquids plant in the nation. Small-scale projects have succeeded in the U.S., and a similar full-size plant has been operating in China since 2008. While previous coal-to-liquids plants have been environmentally dirty, using an indirect method of burning coal to create gases processed into liquids, this plant will be near-zero emissions and will self-recycle, preventing new burdens to landfills.

John Musgrave, executive director of the Mason County Economic Development Authority, commented, “This will have a tremendous economic impact on our county. This will bring jobs and growth to Mason County and the surrounding region.”

Whited said in the announcement that he started DSF to help revive the state’s flagging coal industry.

“You can look around and see the decimation that’s gone on in the coal industry,” Whited said. “We can’t go back and change the past, but we can make the future better. This permit really solidifies the birth of this project, to create a new path forward for West Virginia.”

DEP approved the permit following a 30-day comment period that ended July 22. On Thursday, it issued its 47-page response to the comments. It responded generally to some and specifically to detailed questions from various parties, including the Sierra Club.

DEP noted that in response to concerns expressed in the comments, it did make additions, revisions and corrections to the draft permit.

Among the concerns of Sierra and some others, was DSF classifying its plant as a minor stationary pollution source. Sierra and others believe it should be considered a major source. A major source directly emits or has the potential to emit at least 100 tons per year (TPY) of any air pollutant subject to regulation.

But DEP approved the plant as a minor pollutant source, which has a lower regulatory threshold for health and environmental effects and less stringent emissions standards.

In the draft permit, DEP authorized these potential increases in emissions: carbon monoxide, 71.32 TPY, oxides of nitrogen, 80.91 TPY, particulate matter less than 2.5 microns, 54.66 TPY; particulate matter less than 10 microns, 78.12 TPY; particulate matter, 83.49 TPY; sulfur dioxide, 27.19 TPY; volatile organic compounds, 86.10 TPY; total hazardous air pollutants, 16.96 TPY.

DEP replied that DAQ regarded the information presented in DSF’s permit application as reasonable and therefore qualified it as a minor source.

While Sierra and the Ohio Valley Environmental Coalition said DAQ should require a cumulative air impact analysis, but state code doesn’t call for it, DEP said. And DAQ doesn’t believe the modeling for the analysis would show the plant will cause or contribute to any National Ambient Air Quality Standards violations.

Responding to Sierra comments on possible volatile organic compound leaks from the plant, it noted that this is a pre-construction permit. “The DAQ requires an applicant to make a reasonable emissions estimate backed by defendable calculations.” Requiring detail available only after project engineering is unnecessary to meet the permit requirements and impractical, and would place an undue burden on DSF.

Sierra wanted DEP to withdraw the draft permit and require DSF to submit a new one that accurately estimates emissions, complies with major source regulations and includes sufficient data to support its emissions estimates. The new application would provide for ambient air monitoring, a health risk assessment, consideration of odors and nuisance impacts, and an assessment of greenhouse gas emissions.

DEP goes into detail about odors and the other issues. It concludes: “There is no justification for requiring DSF to withdraw the permit application, no justification for denying the permit.” Noting in the comments showed that the permit is out of line with a reasonable reading of state code.

DAQ believes “all comments made by the Sierra Club were responded to in an appropriate manner and that changes were made to the draft permit, where reasonable, to address substantive concerns.”

Whited said he expects to break ground on the project this fall, begin taking applications for jobs at the facility early in 2020 and start hiring during the second quarter of 2020.

Project supporters who offered positive comments during comment period also offered some words of support to include in DSF’s announcement, Chris Hamilton, chairman of the West Virginia Business & Industry Council, said. “To be able to turn coal into fuel here in West Virginia can go a long way toward establishing U.S. energy independence and expanding our state’s reliance on instate coal supplies.”

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said the project will expand downstream usage of the Mountain State’s annual production of 1.7 trillion cubic feet of natural gas. “That gas is so much better used here in West Virginia.”

Jim Kotcon, Sierra Club West Virginia Chapter conservation chair, commented on the DEP’s decision. “We are still reviewing the comments and looking at our options,” he said. “It does not appear the DEP addressed many of our issues.”

Sierra believes the permit is flawed and won’t withstand a legal challenge, he said. They hope to have a decision on that and what improvements could be made to the permit in next couple of weeks.

Their first step would be to appeal to the state Air Quality Board, he said. Their chief concern is the major source-minor source issue and they think DEP erred in underestimating the pollutant emissions and considering it a minor source.

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