Bunning: Plant a Major Step Forward
By Bill Bartleman, The Paducah Sun, Ky.
Jun. 11–Construction of a coal-to-diesel plant in Paducah would be the largest project of its kind in the country and would be a major step in changing the country’s energy policies, U.S. Sen. Jim Bunning says.
Once the permits have been issued and it is clear the plant will be built, the project would be eligible for hundreds of millions of dollars in federal incentives approved in the 2005 federal energy bill, Bunning said. Efforts will be made to expand the incentives, he said.
Bunning, Sen. Mitch McConnell and U.S. Rep. Ed Whitfield said they have been briefed on the project by Paducah economic development officials and are following its development.
Clean Coal Energy Resources of Louisville is developing the project, which is expected to involve a $3 billion initial investment. The company has applied to the Kentucky Economic Development Cabinet seeking incentives that could be approved this month.
Whitfield said Kentucky’s congressional delegation will do all it can to see that the project becomes reality.
“All of us will be helpful in making it happen because these are the kinds of developments we want in Kentucky to create jobs and are the type of things we need to solve our energy problems for the long term.”
Bunning, in a phone interview during his weekly news conference with Kentucky reporters, said a consortium of about five major companies, including British Petroleum, is planning the project.
Bunning said he’s been told the project includes several stages. The first is the coal-to-diesel plant, and the second stage is a coal-to-aviation fuel plant.
“It would cost $2 billion to $3 billion to start with and up to $5 billion when the aviation fuel plant is built,” Bunning said. “The proposed Paducah plant, which could produce more than 200,000 barrels per day when fully completed, would be the first large-scale coal-to-liquid plant in the United States and would be larger than all three of the coal-to-liquid plants in South Africa combined.”
If the project is successful, it would serve as a national model for future plants that would create significant investments, Bunning said. Fuel could be produced for $65 a barrel or less, he added. Crude oil currently sells for more than $130 a barrel.
Bunning said federal incentives are expected to include tax credits, accelerated depreciation for energy investment, a 50-cent per gallon alternative fuel credit and carbon capture incentives.
“These programs will require extensions and additional appropriations in order for the Paducah plant to apply,” he said.
McConnell said using Kentucky coal to meet the nation’s energy needs is important to energy independence.
“Greater use of coal-to-liquid fuel technology would take full advantage of this natural resource, which Kentucky has in abundance, while also benefiting our environment and creating jobs here at home,” McConnell said. “As an added bonus, the more fuel derived from coal we can use, the less oil we will need, thus reducing prices at the gas pump.”
Bill Bartleman can be contacted at 575-8651.
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