Coal Conversion in the Rust Belt: Will It Be a Diamond for Small Ohio River Town?

An energy company has plans to withdraw water from the Ohio River, the potential site for a coal-to-liquid-fuels conversion plant, which would be the first of its kind in the United States and the sixth in the world. Though it will bring jobs to the region, the proposal is facing strong opposition from environmental groups.

Michael Quick via Flickr / Creative Commons

An East-bound coal train in Bluefield, West Virginia. Wellsville was chosen as the potential site for Baard’s coal conversion plant in part because coal supplies are ample and close by, in Ohio and West Virginia.

By Keith Schneider
Circle of Blue

WELLSVILLE, Ohio – On the way up 25th Street Heights, which climbs to the top of the bluff where Baard Energy wants to build the first coal-to-liquid-fuels plant in the United States, Rick Williams points a thick index finger at vacant homes and empty store fronts in this gray Ohio River Valley town.

Baard, based in Vancouver, Washington, is a mid-sized builder of natural gas-fired utilities, biofuels refineries, and other energy installations The company’s proposed $US 6 billion plant would employ 4,000 people for construction and 500 people for operation. At peak production, the plant would transform 23,000 metric tons (25,500 tons) of coal a day into 8,500 cubic meters (53,000 barrels) of aviation and diesel fuel and would have the capacity to generate 1,000 megawatts of electricity, according to company statements. It also would pour 11 million metric tons (12.2 million tons) of climate-changing carbon emissions into the atmosphere each year, according to the Sierra Club, an environmental and wildlife conservation group.

The climate-changing effects of that much carbon dioxide — along with the long list of environmental and safety hazards associated with mining coal — has made the coal-to-liquids plant a target of legal action by the Natural Resources Defense Council (NRDC), which, in partnership with the Sierra Club, is challenging what its says are overly generous emissions limits in state air and water permits that were granted three years ago. The groups also have challenged a federal wetland fill permit.

“Liquid coal is the wrong way to go,” said Shannon Fisk, the young, Chicago-based lead attorney for the NRDC in the cases. “It is massively expensive and could not move forward without taxpayer subsidies. Those resources should go to developing truly clean alternatives and not to developing dirty coal.”

Weighing the Pros and Cons: Potential for Jobs and for Ecological Harm
Williams, who is 56 years old, understands that argument. He says support for environmental measures is keen in the Ohio River Valley, where the air is much cleaner than it was a generation ago and where fishermen pull bass, bluegills, and muskie from a river that once was so polluted and full of sediment that only catfish and carp could survive.

One morning in early March, Williams spent 20 minutes watching a bald eagle devour a fish as it floated past on an ice flow. “Never saw a bald eagle around here until five years ago,” he says. “The river was a lot dirtier than it is now.”

Williams — the son of an ironworker who’s spent much of his adult life working as a union laborer, often in steel mills and coal-fired power plants fueled by nearby mines — also remarks that this region of southeastern Ohio hasn’t attracted solar, wind, or any other renewable energy projects. But he is convinced that the coal-to-liquids plant could be a new foundation for the region’s economy, so he avidly supports the Baard proposal, though he understands the risk of severe climate disruptions that could be looming in the coming decades.

“It’s too bad the working man has to choose work over environment,” he says.

Williams retired in 2008 and now serves as the Wellsville zoning administrator, with not a lot to do. The city has issued one permit in four years for a new home, he says, as he drives his black Chevy S10 up the bluff. But Baard Energy, Williams explains, has either purchased or optioned every foot of ground for nearly a mile in each direction for a plant the company calls Ohio River Clean Fuels.

Williams drives past thick woods that open to big hay fields, and he describes in plain-spoken detail his life as a union laborer, his two hip replacements, and his faded outlook for the community. Listening to Williams, and to Fisk, the NRDC attorney, it is easy to distill the contest over the Baard plant to its simplest dimension: a place — desperate for new jobs and a fresh start — pitted against the potential for significant ecological harm.

Energy Production and Environmental Stewardship During the Great Recession
The contest over the proposed coal-to-liquids plant, however, goes well beyond a conventional fight between a small West Coast energy developer and a group of influential environmentalists. Baard’s proposal has laid bare a deeper national struggle over new energy technologies, available water resources, the U.S. economy, and environmental safety; and that struggle has profoundly significant and unexpected consequences.

The first is the growing recognition of the choke point between energy and water. Next to agriculture, the energy industry is the largest industrial consumer of water in the United States. Meanwhile, freshwater reserves are declining in most of the regions that are growing the fastest and have the largest conventional energy reserves.

That, in part, is why Baard chose Wellsville for its coal-to liquids plant. Coal supplies are ample and close by, in West Virginia and Ohio. And the local municipal water supply district just finished a water intake and purification project capable of supplying 83,000 cubic meters (22 million gallons) of Ohio River water daily to the proposed plant.

But similar coal-to-liquids plants have been proposed in other coal-rich regions of the country, particularly the Great Plains and the Rocky Mountain West, and have floundered as water-supply issues began to surface publicly and financing dried up during the Great Recession.

There are five coal-to-liquids plants operating outside the U.S. The largest — which produces 24,000 cubic meters (150,000 barrels) a day — was built and is managed in South Africa by Sasol, a global chemical and energy company based in Johannesburg. Four others, producing a combined 5,000 cubic meters (32,000 barrels) per day, operate in China in a program that has been dramatically curtailed since 2008 due to water scarcity.

The other big trend is that water-sipping energy technologies – wind power and solar photovoltaics, in particular, which require virtually no water to operate – are encountering surprising public resistance at the grassroots, as well as work by state and federal lawmakers to curb taxpayer support for clean energy. Hundreds of civic organizations in at least 35 states, many led by local environmental groups, are attacking new utility-scale wind, solar, and geothermal projects as too big, too dangerous, and unwelcome in their communities.

Roopali Phadke, an associate professor of environmental studies at Macalester College in St. Paul, Minnesota, has studied grassroots opposition to clean energy projects under a grant from the National Science Foundation. She’s identified 200 opposition groups in 30 states working to block big wind projects alone.

“The focus of the industry, the government, and national environmental organizations has been on technology, jobs, and making the economics right,” Phadke said. “But they’ve glossed over the civic work that needs to be done. This is a revolution in energy production. There is an assumption that everyone has been on board. They’re not.”

Bill McKibben — an author, a resident scholar at Middlebury College, and co-founder of 350.org, a global climate action organization — says the resistance is prompted by fear and the scarcity of leadership willing to make a full-on commitment to the future.

“You get endlessly stuck trying to make the past work,” McKibben said. “Science has told us the most important fact about the 21st century, and that is that rising carbon levels are increasingly dangerous. But politics has not dealt, in any real way, with that fact — so you end up with all these tragic decisions, like this plant in Ohio.”

Wellsville, Ohio: A Diamond in the Rust Belt?
Wellsville is an especially apt place to explore such a grave conflict, which pits the urgency of dangerous conditions, prompted by a warming planet, against a national economic emergency that is shaped by high energy prices, joblessness, and the stubborn reluctance to pursue new industrial innovation.

While never mistaken as an enclave for the rich, Wellsville spent much of the mid-20th century as an active, small city of 8,000 residents — most of them connected to one or more union locals — with two butchers, two places to buy groceries, two drug stores, and one hardware store.

Nearly 40 years later, there are just 3,800 Wellsville residents. This includes a graduating high school class of 65 students— half of what it used to be — and just a handful of these kids have plans to stay in town. The overgrown riverfront parcels, where thousands of people were once employed, are scraped clear of factories and equipment. Of the 2,000 homes in town, nearly 400 are vacant, according to federal census figures, and just 41 have been built since 1990.

“This used to be a pretty lively place; lots of fun and lots happening,” Williams says. “There was a lot of work and lot of things to do. Now there’s nothing here.”

It is easy to see, then, why Williams and every one of his friends and neighbors — along with hundreds of other Wellsville residents — view Baard’s proposal for a coal-to-liquids plant in the same way that a heart patient awaiting a transplant welcomes news of a potential donor.

Last fall, John Baardson, the company’s chief executive, visited Wellsville and announced that Florida-based investors were ready to finance the first phases of the plant’s development and that construction would commence in the spring of 2011.

To date, more than $US 1 million has been spent on 300 acres, according to Tracy Drake, the 59-year-old director of the Columbiana County Port Authority, which just built a new loading facility on the Ohio River shoreline below the plant site and would oversee coal shipments by barge to the plant. Baard plans to move 13 million cubic meters (17 million cubic yards) of dirt to make the land level enough for a plant site that spans over 200 hectares (500 acres).

But with capital markets leery of any big investment, especially one involving the erratic pricing of energy markets, there’s no assurance that Baard will ever get the chance to build the plant.

“They’ve got a lot of things pushing against them,” Williams says. “I don’t really understand all of it. It seems like a real good idea. We’ve got the coal. We’ve got the people. We could really use the jobs.”

That’s the overwhelming consensus in the region, according to Drake “This is a region that’s used to industry. We’ve seen how existing industries have cleaned themselves up.”

Coal-to-Liquids is a Big Water User
Back in Chicago, though, the NRDC attorney offers a succinct argument for why making liquid fuel out of coal is fraught with so much economic and environmental peril that it should never be used to employ anybody in America. Fisk cites the perils to water, land, and communities from strip mining mountaintops just across the Ohio River in West Virginia, which would be the logical supplier of Baard’s coal.

Fisk also presents a persuasive critique about the plant’s efficiency.

The U.S. consumes about 2.2 million cubic meters (14 million barrels) of transportation fuels a day, which totals to 825 million cubic meters (5.2 billion barrels) a year. This amounts to 75 percent of the nation’s total oil consumption.

It takes about 4 metric tons of coal to produce one cubic meter (six barrels) of fuel. So, just to replace 10 percent of the current national demand for fuel with that made from coal would involve 27 plants of the size that Baard wants to build in Wellsville. Those 27 plants would consume 300 million metric tons (330 million tons) of coal a year, which is equivalent to more than 30 percent of current annual coal production in the U.S. The plants also would consume 1.15 billion cubic meters (305 billion gallons) of water annually.

New Frontier or Last Gasp?
It is not exactly clear whether the Baard proposal represents the last flicker of a dying idea or the new spark for an American coal-conversion industry. Periodically, proposals to build coal-to-liquids plants in the U.S. have sprouted and vanished, following the rise and fall of oil prices.

In 2007, as oil prices climbed, the U.S. Department of Energy was monitoring 17 proposals for coal-to-liquids plants in 10 states – Alaska, Illinois, Mississippi, Montana, North Dakota, Ohio, Pennsylvania, Texas, West Virginia, and Wyoming.

Baard’s is the last proposal that is still breathing; the others have been cancelled or indefinitely delayed because developers have been unable to raise the billions needed in private capital.

“It’s a huge mistake to put a large amount of capital toward building a plant that will inexorably produce, in some sense, the most dangerous compound on earth,” McKibben said. “But, you look at all of the factors, and you can find some part of you that says, ‘Go ahead; build it. Enjoy the last 30 or 40 years of a relatively stable planet, with a good job and a nice house and a boat.’”

Keith Schneider — who has reported on energy, water, and climate change from four continents — is a Traverse City-based senior editor for Circle of Blue. Contact Keith Schneider

A version of this article was originally published by OnEarth, the online news publication of the Natural Resources Defense Council (NRDC).

Executives of Baard Energy did not respond to requests for interviews for this article.

Keith Schneider

Circle of Blue’s senior editor and chief correspondent based in Traverse City, Michigan. He has reported on the contest for energy, food, and water in the era of climate change from six continents. Contact
Keith Schneider

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