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Consortium Formed to Buy Diesel Fuel Made from Waste Coal at Schuylkill Plant

Gov. Rendell this week announced the creation of a fuel consortium that will purchase nearly the full output of cheaper, cleaner diesel fuel to be produced by the nation’s first-ever waste-coal-to-diesel plant planned for Mahanoy City, Schuylkill County.

The plant, which is being built by Waste Management and Processors Inc. (WMPI) of Gilberton, Schuylkill County, will use waste coal to produce as much as 40 million gallons of clean-burning diesel annually.

“We are going to be part of changing how America produces its fuel,” said Gov. Rendell. “We are going to ensure Pennsylvania has a long-term supply of clean, secure and affordable energy. Not only will Pennsylvania be the first state to build such a plant, we also will be the first state to use its purchasing power to lead a consortium to purchase some 40 million gallons of this Pennsylvania produced fuel.”

The consortium members include the Commonwealth which will buy 15 million gallons a year, and distributors Worley & Obetz, Inc. of Manheim, a heating oil company, and the Keystone Alliance, a fuel-purchasing group for the trucking industry.

Waste coal contributes to the problem of acid mine drainage, which is the leading water pollution problem in the commonwealth, and represents a public health hazard. Fires that ignite waste coal contribute to poorer air quality. Rural communities and small coal mining towns are plagued by scarred lands.

Aside from being cheaper, the plant’s diesel will be cleaner. The fuel will burn with no sulfur emissions --- a contributor to acid rain and global climate change --- and burn with a high level of energy efficiency, making it more economical for drivers. The plant will use state-of-the-art control technology in its manufacturing process to control air emissions.

In addition, the waste heat from making the liquid fuels will be used to generate 41 megawatts of low-cost electric power that will be fed into the grid, a concept known as polygeneration. The waste heat is enough to power more than 40,000 homes.

Pennsylvania has offered significant financial incentives to make energy manufacturing a cornerstone of the state’s economic future, including $47 million in tax credits for the development of this project. The U.S. Department of Energy has committed another $100 million in grants, and the recently passed federal energy plan singles out this project for a federal loan guarantee.

Development work on this plant began in 1998 with a trade mission to South Africa.

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