Loan to Pa. waste coal-to-fuel plant money won't be taken away

By Kimberly Hefling, The Carlisle Sentinel

WASHINGTON - The White House, reversing course, reinstated a $100 million loan to the backers of what has been billed as the nation's first plant to convert waste coal into zero-sulfur diesel fuel and home-heating oil.

The decision was announced Friday in a joint statement by Pennsylvania Sens. Arlen Specter and Bob Casey and Rep. Tim Holden, D-Pa.

Lawmakers on Feb. 5 were surprised to see a line buried in President Bush's proposed budget that would take away a loan promised in 2003 for the Schuylkill County plant because its backers had not yet secured full funding.

Under an agreement, the plant backers now have until the end of the year to secure funding for the facility before the loan is rescinded, according to the lawmakers.

Sean Kevelighan, a spokesman with the Office of Management and Budget, said the decision was reached after Specter arranged a meeting with the parties involved.

"At a time when our nation is grappling with energy security, we should be using every incentive and tool at our disposal to promote clean coal-to-liquid technology in the U.S.," Specter said in a statement.

The $800 million facility is to be built between an existing plant in West Mahanoy Township and the Mahanoy state prison. A study said it would burn 1.7 million tons of anthracite coal waste per year, creating a clear, zero-sulfur product called syngas to formulate diesel fuel, jet fuel and naphtha, a fuel and solvent.