A controversial project to turn coal into liquid fuels in southwest Ohio has been abandoned by way of a negotiated settlement, amid legal challenges by environmental groups over pollution permits and questions about the ability of owner Baard Energy to secure financing.
As the first coal-to-liquid refinery to be awarded pollution permits in the U.S., the settlement may have dealt a blow to the broader industry, underscoring problems with the expensive and polluting process once thought to provide a viable alternative to petroleum-based liquid fuels.
Sierra Club and the Natural Resources Defense Council (NRDC) mounted a number of legal challenges to the State of Ohio’s pollution permits issued to the facility, raising significant questions about the project’s air pollution, water discharges, and greenhouse gas emissions.
Baard Energy and the State of Ohio settled the long permit fight by agreeing to cease efforts to turn coal into liquid fuels. Baard plans instead to move to natural gas, eliminating more than 75% of the carbon emissions that would have been associated with the project, as well as smog and mercury pollution that cause asthma, lung disease, heart disease. In addition, the switch closes what would have been a new market for Ohio’s high-sulfer coal, some of the dirtiest in the nation.
“Coal to liquids technology has always been dirty and expensive—and [Friday’s] announcement makes it clear that it remains a bad bet,” said NRDC senior attorney Shannon Fisk. “Four years into this mess, the Baard facility has not been able to sort out its pollution permits or financing because making liquid fuel out of coal simply doesn’t work economically or environmentally. The public subsidies its developers sought shouldn’t pay for pollution. We have better choices.”
Ohio’s Environmental Protection Agency was also a party to the settlement, which is being filed with the Ohio Environmental Review Appeals Commission today.
Pursuant to the agreement, NRDC and Sierra Club are moving to stay their pending legal challenges to the permits for Baard’s proposed coal-to-liquids facility while Baard and Ohio EPA work to modify those permits to remove coal as a feedstock. Assuming the modified permits reflect the agreement being filed today, NRDC and Sierra Club will then move to dismiss their appeals once the permits are modified.
If the project had been allowed to proceed, the facility would have produced approximately 52,000 barrels of fuel per day. The combustion gas and steam produced by the coal gasification process would be utilized at an onsite cogeneration plant that would have produced enough electric power to operate the plant and a 250MW surplus that would have been exported to an adjacent power grid.
A U.S. Department of Energy study indicates that gasification consumes a ton of coal to produce just two barrels of liquid fuel, in line with Baard Energy’s own predictions. To produce 52,000 barrels a day of liquid fuel the Columbiana County would have required 9.3 million tons of coal a year.
Advocacy group Ohio Citizen Action, citing an NRDC study, reports that replacing 10% of the U.S. petroleum demand with coal-derived liquid fuels would “require a 42% increase in U.S. coal production, or 475 million tons more coal every year, to run these refineries.”