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Northern Alaska Environmental Center Blasts Proposed Coal-to-Liquid Fuel Plant

JUNEAU — Plans to build a facility near Fairbanks that would convert coal to liquid fuels are not in the public interest and will cost far more than proponents say, according to a study of the project commissioned by a local environmental group.

The Northern Alaska Environmental Center paid John Talberth, president and consulting economist of the Center for Sustainable Economy, to evaluate the plans by Fairbanks Economic Development Corporation.

“We had a lot of questions,” said Jessie Peterson, local issues coordinator for the center. The economic viability report paints a picture of an “irresponsible” project that is “not worth the public dollar,” she said.

Peterson hoped legislators, local leaders and borough officials will “realize this is coming from factual evidence on the economic reality.”

“Take a hard look,” she urged. “Think twice before investing more public dollars into this project.”

FEDC paid $550,000 to Toronto-based Hatch Corp. for early engineering plans and a feasibility study for the project. Of that, $250,000 came from the Fairbanks North Star Borough and $300,000 from the Legislature. Officials are considering whether to spend another $7 million to $8 million on a next-level engineering study with Hatch.

“For $500,000, Hatch gave back a fairly irresponsible report that was inefficient, that didn’t answer the hard questions of whether or not this project should go forward,” Peterson charged. “it would be foolish at this point to recommend Hatch to go forward.”

FEDC energy projects manager Jomo Stewart said a second-level analysis is planned, pending funding. He noted that many of the issues raised by the center’s report are already under consideration by the Fairbanks proponents.

“We believe this preliminary analysis of our preliminary analysis is premature,” Stewart said. “It identifies areas of further analysis that we, the project proponents, had already identified.”

The first-level study by Hatch matched FEDC’s expectations, offering basic information about the feasibility of proposed technology and its use in an Arctic environment.

“We thank the environmental center, and we hope they will remain engaged to ensure the project is not only financially successful and socially beneficial, but environmentally friendly,” Stewart said.

FEDC and Fairbanks North Star Borough Mayor Jim Whitaker have pushed the project as a solution to the area’s air pollution problems, as a new source of stable energy and as a mechanism to manufacture synthetic fuels that could help keep Eielson Air Force Base off closure lists.

But Peterson said there are other ways to accomplish those goals without wasting public money and risking damage to the environment.

A coal-to-liquids facility would generate carbon emissions, which would have to be sequestered. Technology for sequestration is not fully developed and costs, not to mention potential risks, are unknown.

Instead, Peterson said, money should be invested to further the momentum building among people and in the Legislature for renewable energy and projects designed for efficiency.

“There is demand up here (Fairbanks) for energy-efficient projects, for renewables, even the natural gas bullet line. We have options,” she said. “The momentum is moving away from coal. Rather than focusing our time and money on this, we should be focusing on the natural gas bullet line.”

Southcentral utility Enstar has proposed a $4 billion bullet line between the North Slope and markets near Anchorage. Gov. Sarah Palin rolled out two bills last week and a larger plan Tuesday that she said would forward in-state natural gas development, including a bullet line.

Stewart said a coal-to-liquids facility could actually serve as an industrial anchor customer for a natural gas pipeline, netting lower rates for other Fairbanks customers.


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