St. Louis – Peabody Energy Corp. has pledged nearly one million tons of coal a year and up to $10 million in development funds to an Illinois plant that planners say would be the first in the nation to commercially turn coal into liquid fuels for big-rig trucks, buses, barges or jets.
St. Louis-based Peabody, as part of the deal announced this week, also gets an option to buy a 20 percent stake in the East Dubuque, Ill., plant planned by Rentech Inc., a Denver-based firm specializing in coal-to-liquids technology.
That process has drawn increasing attention as a potential energy source meant to lessen U.S. dependence on foreign oil.
At the insistence of the coal industry, some federal lawmakers are proposing an array of “energy independence” measures calling for taxpayers to underwrite coal-to-liquid plants, from billions of dollars in construction loans to minimum prices for the new fuel.
Rentech’s John Diesch told a Senate subcommittee last month it “will take an investment approaching $1 billion” to create the coal-to-liquid plant, replacing what is now Ren tech’s factory where fertilizer is made for Midwest farmers.
Diesch said the plant, whose transformation is expected to begin within months, would use technology he insisted produces fuel cleaner than conventional diesel because sulfur and other oil byproducts are removed.
Diesch also testified that such fuel runs cleaner than conventional fuels from petroleum, is biodegradable and can be stored five to 10 times longer than diesel, making it ideal for strategic reserves.
Peabody said the Rentech plant would crank out roughly 400,000 barrels of liquid fuel per year as well as about 545,000 tons of nitrogen fertilizer products.
The plant would capture emissions of carbon dioxide, and Rentech is evaluating prospects of selling the gas to bottling companies or for use by area petroleum producers to boost oil output by pumping it underground.
