Letter: Coal-to-diesel success dependant on local economic assistance and federal funding

Regarding: “Clean-coal innovations are the next chapter in America’s energy future.”

It’s author, Greg Merle was rejected in Vermillion County after six long years of empty promises so he came to Spencer County where it was tradition to accept any sort of polluting project that offered a feather in the cap of the LincolnLand Economic Development Corporation.

Just in the last decade, this is the third multi-billion-dollar project LEDC has promoted. Like Indiana Gasification and Ohio Valley Resources, this one will ultimately fail due to dubious economics and Merle’s own lack of experience in building and operating such an experimental project.

Spencer County deserves better than having to transform one of its cozy little towns into nothing but a major industrial facility with the problems of noise, light pollution, fire hazards, etc., that come with producing highly volatile products like Naphtha. Should something go wrong, a naphtha explosion could level the entire town in minutes and the Carter Twp. Volunteer Fire Department, good as it may be, would be stymied to stop it.

Merle sees Dale as a place to exploit, hoping to make millions off naive political officials who admitted early on they knew nothing about his proposal. Even today, three years in, Merle has refused to publicly meet with the Dale community in an open forum, where townspeople could inquire about just how much he knows about the technology, his managerial experience and where he is getting his multibillion capital needed for construction.

It is apparent that Merle did not get the memo that coal’s time is rapidly coming to an end. He calls it “clean coal” but his project completely fails to capture, let alone permanently store its massive carbon dioxide emissions. Already the project is on thin ice economically but if it were to actually capture and store its carbon dioxide, cost would soar. There is a reason why none of these facilities have been built in the USA. The economics simply do not add up. It will always be less expensive to produce diesel fuel from liquid crude than from solid coal.

We need to remember that over the last Century plus, numerous attempts to make liquid fuel from coal have been promoted in our country, all with the same result-failed economics. In fact, the only places coal to liquids have been successfully built were in Nazi Germany and apartheid South Africa, neither of which had access to crude oil. Coal to liquid fuels has always been an act of desperation due to a lack of crude. And it should be noted that the company with the most success, Sasol, announced earlier this year they would end their efforts to grow their business due to questionable economics.

Merle has more or less admitted that he will rely on the Federal government to somehow finance the project. He admitted that in a presentation to economic development officials in Owensboro last year. But absent an outright grant from Trump, (I call that Socialized Risk, Privatized Profit) the only program that he could use is the Department of Energy “Loan Guarantee Program” that requires projects to reduce or sequester Carbon Dioxide. This project does neither. In fact, the opposite is true.

Further, Merle claims his market is maritime transportation but fails to explain why producing diesel fuel for global shipping is located hundreds of miles from any coast and at least thirty miles from the nearest port on the Ohio River in Owensboro. That added transportation cost also impacts the project’s bottom line.

Merle is little more than a Connecticut carpetbagger, using his daddy’s coal fortune to promote a get rich quick scheme that will permanently alter a small town, rural landscape and health of the people who have actually chosen Dale as their home.

Spencer County can and must do better.

John Blair, Evansville