Wyoming legislators support plans for Lake DeSmet plant
By JEREMY FUGLEBERG Casper Star-Tribune ? The Billings Gazette | Posted: Tuesday, June 21, 2011 11:45 pm |
billingsgazette.com
RIVERTON, Wyo. — Wyoming legislators say they want to support research for the design of facilities that will convert the state’s natural gas and coal to gasoline.
Members of the Joint Minerals, Business and Economic Development Interim Committee decided Tuesday to develop legislation to contribute toward the $5 million cost of a study to help with facility design.
Representatives of Casper-based Nerd Gas Co. told lawmakers they hope to place such a facility on land the company owns next to Lake DeSmet, south of Sheridan.
They told members of the committee at its meeting in Riverton that a natural gas-to-gasoline plant would cost about $1.7 billion to build and would convert 288 million cubic feet of natural gas to 34,000 barrels of gasoline a day.
At today’s prices, $34 worth of natural gas could be converted into $140 worth of gasoline at the facility, leaving a tidy profit for the facility’s owner and investors even after expenses, according to a feasibility study conducted by researchers at the federal Idaho National Laboratory.
“They believe at these discounted (natural) gas prices we can produce a lot of gasoline and make a lot of money for ourselves and the state of Wyoming,” said Mick McMurry, president of Nerd Gas.
Researchers at the U.S. Department of Energy’s research facility near Idaho Falls, Idaho, conducted the study for facilities that would convert natural gas and coal to gasoline and other liquid fuels in Wyoming.
The Nerd Gas location at Lake DeSmet is the same location where Texaco in the late 1970s spent millions to build up the site for a gasification plant and secured water rights before abandoning the plan when the price of oil collapsed.
Nerd Gas bought the land and water rights in 2005, said Cary Brus, senior vice president for the company. The site includes raised dams, coal underground, significant transmission lines, a pipeline and a nearby railhead.
Carbon dioxide produced at the plant during the conversion process would be captured and shipped to oil fields in the region to be pumped underground and push out additional oil, a procedure known as enhanced oil recovery.
McMurry of Nerd Gas emphasized the importance of natural gas as the leading source of revenue for Wyoming. Natural gas is the “Lady Gaga” of energy in the state, he said, referring to the chart-topping pop music artist.
Brus told lawmakers it’s important to continue to seek ways to use Powder River Basin coal. The coal had no value 200 years ago, and it might not have value in 50 years as regulations and consumer tastes shift, he said.
“We don’t know how long those markets will last,” he said. “It’s changing all the time.”
Brus said the initial goal is construction of the natural gas-to-gasoline facility, then working toward a coal-to-gasoline process. Such a facility could convert 29,200 tons of Wyoming coal into 43,942 barrels of gasoline per day.
“We have a small window in which we can capitalize on Wyoming’s coal reserves, and natural gas is the stepping stone,” he said.
Brus said representatives of the company will seek partnerships with a variety of energy companies including Exxon Mobil, BP, Shell and Encana Oil & Gas.
He told lawmakers that he hoped the state would assist with a study regarding such a facility’s engineering and design, help promote coal and natural gas-to-gasoline facilities, and use Wyoming’s top-notch credit rating and bonding ability to attract and keep investors.
That study would build on the Idaho National Laboratory’s feasibility study, which was developed through a federally approved research and development agreement between the Wyoming Business Council and the laboratory, according to a meeting handout from the University of Wyoming.
The study was funded by the industry, the state of Wyoming and the laboratory, according to the handout, although its cost wasn’t disclosed.
Legislators on the Joint Minerals Committee, which consists of both state representatives and senators, welcomed the request and called for legislation to be drafted that provides matching funds for the study.
“Let’s get the state of Wyoming behind this project and see how we can move it,” said state Sen. Eli Bebout, R-Riverton, a committee co-chairman.
The committee will review the draft bill at its next meeting in September.
The Nerd Gas facility isn’t the only synthetic fuels plant planned for Wyoming. Houston-based DKRW Advanced Fuels, through wholly owned subsidiary Medicine Bow Fuel and Power, has begun construction of a $2 billion to $3 billion coal-to-liquids plant near Medicine Bow.
The plant, which would produce 21,000 barrels of gasoline and other liquids per day from coal mined nearby, is expected to go into operation in 2014. |
