FAIRBANKS - Proponents of a plant that would make liquid fuels out of coal say such a facility could be the solution to high energy costs in Fairbanks and Interior villages.
However, a financial specialist warned that private-sector financing will be hard to find without some government assistance, either as cash, loan guarantees or off-take agreements.
The borough and Fairbanks Economic Development Corporation have proposed building a plant that would produce between 20,000 and 40,000 barrels of liquid fuel a day from coal and biomass - a plant that would probably cost at least several billion dollars.
High-ranking officials from the U.S. Department of Energy and the U.S. Air Force, as well as more local players, gathered Friday in Fairbanks to discuss how to fast-track a biomass and coal-to-liquids facility. They heard from seven speakers representing pieces of the project.
While the gasification and coal-to-liquids technologies are well-established, few companies have experience building and operating the facilities, said Radoslav Shipkoff, director of Greengate LLC, which provides financial advisory services in energy and infrastructure sectors worldwide. That increases financial risk for investors, who prefer supporting projects built by companies that can offer performance guarantees.
Project advocates are looking to the U.S. Air Force for some financial backing in the form of off-take agreements, or commitments to purchase fuel produced by the plant. General Howie Chandler, Commander of Pacific Air Forces, attended the summit.
"We are the largest user of energy in the Department of Defense," Chandler said. The bill totaled $6 billion last year for jet fuel, $12.5 million of which was at Eielson. And that, he added, was at $2.20 a gallon.
"For that reason, we're interested in conservation, and we're interested in new ideas," he explained.
Kevin Billings, the Air Force's deputy assistant secretary for energy and the environment, said the Air Force has committed to certify its entire fleet to fly on a synthetic fuel blend - and, once that happens, to buy 400 million gallons of synfuel annually.
"The project here would be a huge part of making that happen, and in making us much more energy secure in the United States," he said.
The military isn't the only likely beneficiary of a coal-to-liquids plant, which would turn out the same fuel that much of Alaska already has the infrastructure to use - diesel.
Alaska Energy Authority Director Steve Haagenson said his primary goal is to quickly reduce the costs of energy in Alaska. He added that Fairbanks and Interior villages depend on each other economically and in energy issues.
In particular, he said Alaska needs to develop fuels that can be used in the existing infrastructure - most of which, in the Interior and in villages, is built to run on diesel.
"Alaska is kind of hooked on diesel fuel," Haagenson said. "It used to be cheap, and it used to be convenient. Now, it's just convenient."
Full Story: http://newsminer.com/news/2008/jul/19/funding-biomass-fuels-may-be-hurdle/
