This news story originally provided by The Charleston Gazette

August 15, 2004

Floating synfuel plant has critics

By Paul J. Nyden
Staff Writer

McGinnis Inc., a company that operates river barges and docks along the Ohio and Mississippi rivers, wants the Army Corps of Engineers to approve a permit to construct a floating coal synfuel plant near Coal Grove, Ohio, not far from Huntington.

Two floating barges supporting the synfuel plant would each be as large as six regular river barges and 600 feet long, or the length of two football fields. The synfuel plant would rise 67 feet above the river surface, according to the company’s permit application filed with the corps.

McGinnis Inc. plans to operate the plant around the clock, seven days a week. McGinnis will apparently buy and transport an existing synfuel plant at an unidentified location.

Donald R. Vredeveld, a retired chemical engineer from Charleston, wrote the corps a letter Aug. 8 “to urge you to use your influence to stop the waste of federal taxes by granting federal tax credits for coal from illegitimate coal synfuel facilities....

“As a former employee of Union Carbide who worked on the Coal Hydrogen Research Project, I am a strong supporter of legitimate projects for producing synfuel liquid fuels from coal.”

Vredeveld wrote that it “offends me” when companies collect federal tax credits under Section 29 of the 1980 Crude Oil Windfall Profits Tax Act “by simply spraying coal with worthless chemicals which add no value whatsoever to the coal as a fuel.”

Congress passed the 1980 act to encourage the development of alternative fuels, such as producing ethanol from corncobs.

In 1999, a handful of coal-fired electric utilities and coal companies began claiming synfuel tax credits by spraying already-marketable coal with fuel emulsions, latex and pine tars.

These coal synfuel producers collected $2 billion in federal tax credits in 2002 and $2.8 billion in 2003. A coal synfuel credit is worth between $25 and $26 a ton for coal produced in Central Appalachia.

In 2003, unsuccessful legislation backed by George W. Bush would have extended coal synfuel credits beyond their present expiration date, which is Dec. 31, 2007.

McGinnis Inc. modified a previous project proposal to the Corps of Engineers by adding requested facilities on the onshore portion of the plant, including an office, bathhouse for workers, a storage tank for latex, water tanks and pipes leading from these tanks onto the floating synfuel plant.

The Ohio Valley Environmental Coalition, an environmental group with more than 800 members in the Tri-State area, also filed a letter urging the corps to deny the permits.

OVEC stated the synfuel plant should be entirely based on the land to avoid any potential environmental pollution and spills into the Ohio River, which provides drinking water to thousands living along the river.

In her letter, OVEC Co-Director Janet Fout wrote that local residents already suffer higher than average deaths per capita from respiratory illnesses because of coal-fired power plants.

“This facility would add yet one more source that could cause cancer and other lung problems from breathing more particulate matter or toxic fumes such as diesel fuel.”

Fout also asked that McGinnis provide a manual with detailed information about how it plans to prevent leaks and spills into the Ohio River from the barge-based synfuel plant.

In addition, Fout raised “serious concerns about the economic impacts” of the synfuel facility. “We are concerned that the median house value of $55,400 and other property value in Coal Grove will decrease as a result of the proposed facility, while this proposed facility will allow secret investors to reap millions of dollars in tax credits from a questionable practice.”

OVEC estimates the Coal Grove plant will generate about $46 million a year in tax credits for its owners and investors.

The corps accepted public comments on the McGinnis application until Aug. 9. The corps should make a ruling on the application within the next few weeks.

Susan Fields, a project manager who is evaluating the project, was not in the Huntington offices this week and was unavailable for comment.

To contact staff writer Paul J. Nyden, use e-mail or call 348-5164.