PUBLISHED JANUARY 08 - 2007

Ackerman – A $26 –million clean coal technology project in Choctaw County promises to help decrease the country’s dependence on foreign oil and make Mississippi the center of alternative fuel production. Silverado Green Fuel Inc. will build the first such facility in the U.S. on 14-acres in the Red Hills EcoPlex.

The permitting process will begin after the groundbreaking that’s expected to take place in February. The facility is designed to utilize the state’s vast supply of low-rank coal reserves by converting them into green fuel, a new form of coal-based, environmentally-friendly, low-cost alternative fuel.

The project will take advantage of the lignite coal deposit that runs through about a third of Mississippi and the other Gulf states. Garry Anselmo, Silverado Green Fuel CEO, says Mississippi’s center position is advantageous for production.

“Mississippi will be the hub. Other states will send their coal here to be tested and processed,” he said. “Then it will spread to other countries and they will bring coal here to test to see how it reacts to the process.”

He acknowledged the roles Choctaw County, the Mississippi Development Authority, the state’s U.S. senators and the U.S. Departments of energy and defense played in making the project a reality.

“They really made it work,” he said. “This project is far beyond a new project in Mississippi. It’s the beginning of a new fuel for the world and without all the inherent environmental problems and high costs that other energy requires. There is enough of this type of coal to supply fuel for America for 300 years.”

Alan Bates, executive director of the Choctaw County Economic Development Foundation, says the area is excited about the project. “MDA played a big role in getting it,” he said. “We have an asset underneath our feet, lignite coal, and we pursue businesses that use that asset. We welcome new opportunities here.”

He points out that Choctaw County has the only active lignite plant in the state. The coal is mined next to the Red Hills Power Plant and provides electricity to the Tennessee Valley Authority.

The 45 jobs coming with the Silverado project are also welcomed to the county that has a population of just under 10,000. “Everyone of course is glad to get the new business and the 45 jobs,” Bates said. “That will be one of our largest companies. The average salary of $48,000 will be good, too. We’re fortunate to have good paying companies here.”

Bates added that he doesn’t fear any environmental repercussions from the new facility. “Everything in mining is very regulated. The industry has as good reclamation program,” he said. “The deer haven’t left the area. I was recently at the site of the North American Coal Company and saw a deer.”

Silverado signed a memorandum of understanding with the state as represented by the MDA, Choctaw County Board of Supervisors and the Choctaw County Economic Development District to build a facility designed to demonstrate the economic feasibility and environmental superiority of converting low-rank coal into a stable liquid fuel that can be used efficiently while also defining exact parameters for a commercial facility.

“This project is a key step toward real commercial production of green fuel and the culmination of our work over the past six years to develop advanced, efficient and cleaner coal technology,” Anselmo said.

Under the terms of the agreement, the county’s economic development district will provide a 14-acre site at its Ecoplex. Choctaw County will clear the site in preparation for construction and construct the facility building based on Silverado’s specifications. The state, through MDA, will provide for the infrastructure with a series of grants.

MDA executive director Gray Swoope said, “The State of Mississippi is proud to welcome Silverado as our newest corporate citizen. With its innovative technologies, Silverado will produce vital energy while stimulating the economy of Choctaw County with 45 new jobs.”

Working with universities, Silverado engineers have refined the process of converting the lignite coal that Anselmo says the world turned its back on. Lignite, which has a lot of water in it, is not good coal to burn. Silverado’s technology was developed by Dr. Warrack Wilson, vice president of the company’s fuel technology division.

The process takes low-rank coal (lignite), crushes and grinds it, and then pressure cooks it to dehydrate the water. In doing so, the coal sweats and as it cools is coated with particles that do not let water back into the coal. The water extracted has hydrocarbons that Anselmo says can be cleaned and mixed back with the particles to ship in liquid fuel form.

“It looks like oil, pours like oil and is non-flammable,” he said. “It will create steam for electricity and industry. It’s ideal for gasification and costs $15 a barrel instead of $55 or whatever the current price of oil is.”

He said the process stayed dormant until 20 years ago when the energy crisis got really hot. “Now it’s back on the front burner and I foresee other plants like this one,” he said. “It’s a strategic fuel. In making these products, there will be zero emissions.”

The Mississippi project is a demonstration project, Anselmo said. It will test fuels and train students and employees. There will also be scholarships and more people will be employed as the facility develops.

“The project has many good things,” he added. “We can also make secondary products, and we can help Third World countries so they don’t have to spend all they have for foreign oil.”

Over one-quarter of the world’s coal reserves are in the United States. Fully half of those reserves are low-rank coal.

Distributed with permission from Mississippi Business Journal and Venture Publications Inc., 2007.

Lynn Loft