Construction Ready to Start on Clean Coal Plant in Gillette, WY

Sat November 26, 2005 - West Edition

GILLETTE, WY (AP) A coal enhancement company hopes its new clean-coal plant under construction can begin operation by the end of December.

KFx Inc. is building a plant at the Fort Union coal mine that would pressurize and heat Powder River Basin coal.

The KFx process increases the heat value of the coal from approximately 8,500 British thermal units per pound to 11,000 Btu per pound. The company wants to build up to 12 such plants in the basin.

If construction stays on schedule, the plant will produce enhanced coal with up to 30 percent less moisture and reduced amounts of sulfur dioxide and mercury by the end of December, according to Ted Venners, chief technology officer for KFx.

The nation’s economy, starved for energy, is ready for the introduction of such technology, especially when Eastern power plants are facing tightening air quality regulations and mercury restrictions, Venners said.

“The economics of energy are viable for technology,’’ he said. “High energy prices make technology work.’’

“The market believes it’s going to work, we believe this is going to work,’’ said Mark Sexton, CEO of KFx.

The company has signed a three-year contract with Black Hills Power & Light Co. to conduct test burns of the enhanced coal over a 10-day period in December, Venners said.

In another agreement with Black Hills, the company announced in September that it would also ship 35,000 tons of untreated coal per month from its mine to the Wyodak plant.

If the tests go well, and once any glitches in the process are smoothed out, the company will begin shipping its coal to Buckeye Industrial, an Ohio coal vendor that will distribute the coal to Eastern power plants.

Buckeye has agreed to buy 500,000 tons per year of the enhanced coal, two-thirds of Fort Union’s projected annual production.

Venners was discussing agreements with other utilities to sell the rest of the K-Fuel from the Fort Union mine. He would not disclose the names of the utilities, citing federal disclosure laws, but said they are in states including Wisconsin, Illinois, Michigan and Ohio.

Arch Coal Inc., a St. Louis company that owns Black Thunder mine, has agreed to reopen its Coal Creek coal mine for another plant upon successful completion of the Fort Union project.

KFx also secured an agreement with Kiewit Mining Group Inc. to build a plant at the Buckskin Mine west of Gillette.