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The Medicine Bow coal to gasoline plant comes at too great a risk, too high a cost

Posted Apr. 9, 2013 / Posted by: Rey Edward

Since the project’s inception in 2006, Friends of the Earth has advocated against the use of public funds for the proposed coal to gasoline plant in Medicine Bow, Wyoming. Despite claims from DKRW, the Enron-headed company behind the project, that it could be financed though private investment, it has repeatedly turned to federal and state sources of funding, from a request for a Department of Energy loan guarantee, to state industrial and private activity bonds. In the past, Friends of the Earth has detailed why public funding shouldn’t be used to fund coal to gasoline projects, as it is one of the world’s dirtiest fuel sources with a huge carbon footprint. If it were to be fully developed, Medicine Bow would set a dangerous precedent in being the first and only CTL plant in the country. However, a series of ongoing financing and postponement woes have stalled progress on Medicine Bow, causing disenchantment among Wyoming regulators

So after eight years of delays, the Medicine Bow coal to liquid plant saga continues.

Several weeks ago, the Wyoming Industrial Siting Council (ISC) deemed the $2 billion Medicine Bow coal to liquid plant “out of compliance” after DKRW Advanced Fuel failed to submit a required update on the construction schedule and socioeconomic analysis by the April 1 deadline. DKRW requested an extension but was formally rejected by the Carbon County Board of Commissioners. Luke Esch, administrator of the Industrial Siting Division, said that the company must submit a new construction plan and socioeconomic analysis report by June 19 or risk losing the permit for the entire project.

The delay is just the latest problem plaguing the hapless project.

DKRW blamed Sinopec Engineering, a Chinese state owned company contracted to perform construction and turnkey operations, for the setback, explaining that Sinopec is unable to begin construction on the project this year as previously planned.

Despite DKRW’s assurances that the project remains “viable”, the eight year lapse between the project’s announcement and its ongoing inability to secure financing raises a red flag as to whether DKRW is stringing along the Wyoming community for a project riddled with environmental problems. Local residents have already identified a number of serious flaws in the plant’s proposed plans.

Jay Lillegraven, a geologist and retired University of Wyoming professor, has thoroughly analyzed the project and concluded that the Wyoming regulatory agencies must be held accountable for approving a project with serious environmental and engineering concerns. In a recent letter to the Wyoming Industrial Siting Division, Lillegraven called attention to the piecemeal process in which the Wyoming local government approved the project, the failure of state agencies to effectively review and regulate the project, and thirteen environmental and facility planning concerns, ranging from the unproven reliability of carbon sequestration, potentially inadequate water supply, waste management procedures, lack of detailed emergency plans and its impact on local resources, mineworker safety, and most importantly, the lack of a NEPA environmental impact assessment.

In approving a project with dangerously high environmental and financial risks, the Wyoming ISC and Department of Environmental Quality have failed to adequately regulate a potentially disastrous project. Although the Wyoming government hopes to increase the number of jobs and investment in the state, the project comes at too great a risk and too high a cost. 

Photo Credit: taxpayer.net

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