Turning coal into liquid gold

The SynEnergy Triad North America plant will convert coal feedstock into synthetic military-grade jet, diesel and commercial aviation fuel, plus a host of various plastic polymer and base chemical products.

Getting started

It sounds great in theory, but the real snag will be whether the company can procure funding.

Cornaglia-Domm estimated it will require a roughly $8 billion to $10 billion investment to get the facility underway. Admittedly, that’s a hefty investment at the onset. However, she contends that it will be well worth it in the long haul: The plant has a projected starting production capacity of 40,000 barrels of fuel per day (bpd) and a goal of producing up to 180,000 (bpd) of fuel.

Currently, Cornaglia-Domm is in talks with the Department of Defense and Department of Energy to procure both funding and contracts for fuel as she gears up for the first round of funding early next year. She’s also waiting to receive the final quote for the design build from a global engineering, procurement, construction and maintenance company based in the U.S. that specializes in these types of projects – which, at present, she’s not at liberty to name, pending a nondisclosure agreement and signed contract.

GEI’s president is a UK-based process engineer with more than a decade of experience and a long track record of working a number of global EPC contractors and large-scale coal-to-projects, said Cornaglia-Domm. That includes working with South African-based company SASOL, which, according to its website, is the only global company other than China with a large-scale, commercial-grade facility in which it pioneered the commercial application of Fischer-Tropsch technology in the early 1950s at its petrochemical plant near Johannesburg.

Given their combined years of experience and top-to-bottom understanding of the industry, she is confident of procuring both a solid business plan, business model and funding of each phase of the project.

“We built our plan for success,” she said.

Currently, Cornaglia-Domm is working from an office in the FUEL business incubator at the Energy Capital Economic Development complex on Sinclair Street in Campbell County, where she relocated GEI’s headquarters from Colorado this past July.

Unrolling a stack of laminated blueprints and charts detailing the project she’s spent the last four years painstakingly bringing to fruition, she said she’s undeterred by obstacles and naysayers touting excessive startup costs and pouring more money into developmental technology, such as carbon capture and sequestration, in which the DOE and other federal, state and local entities have invested millions into a variety of projects at the Integrated Test Center (ITC) at Dry Fork Station, north of Gillette.

Their company will piggyback on these new technologies by utilizing carbon capture storage and sequestration and other clean coal techniques in their production process, she noted, to further mitigate carbon emissions.

Given Campbell County’s abundance of rich coal feedstocks, Cornaglia-Domm believes that Gillette is perfectly situated to become a leader in the industry as the first commercial facility of its kind in the country. Where other companies have failed to bring the technology to light, including a handful of attempts in Campbell County, Cornaglia-Domm said what’s different now is the nation’s trending taste for renewables and demonizing of CO2 that has successfully turned the market away from fossil fuels.

“This is the United States of America,” Cornaglia-Domm said. “We can do this, and we need to do it now.”

An industry born from necessity

The first industrial scale synfuel plants were built in Nazi Germany. They understood that the country’s limited petroleum supply made it necessary to create a synthetic source of fuel for Hitler’s army. At its peak in 1944, according to research by DOE, Germany was producing more than 124,000 barrels a day.

Later, South Africa pursued coal-to-liquids due to a lack of domestic oil because the country had been cut off from capital and fuel by embargoes imposed by the rest of the world.

In short, the technology was born from a lack of oil and gas and other forms of affordable energy.

Such efforts were not lost on the U.S., and the government began implementing its own synfuel efforts with passage of the Synthetic Fuels Act in 1944, which authorized $30 million for a five-year CTL project. The effort continued in 1950 with the passage of a second amendment to the existing act, granting another $17.6 million to build an experimental station near Morgantown, West Virginia, per the DOE.

Private industry, too, got into the game in the early 1950s when Carbide and Carbon Chemical Company (later Union Carbide) built a commercial facility in Institute, West Virginia, which could process up to 300 tons of coal per day.

Though efforts to produce synthetic fuels were largely successful, the problem, as is typically the case with renewables, was one of economics. With increased access to cheap oil and gas, synthetic fuels couldn’t compete, and ultimately the mission was aborted by both government and industry.

That’s the problem, according to former Campbell County Commissioner Mark Christensen, who has been an advocate for other like-minded projects in the Powder River Basin.

The two-term commissioner is largely credited for coining the term Carbon Valley, and understands the necessity of economic diversification and finding new uses for the county’s rich abundance of bituminous coal to revive an otherwise anemic industry.

“Coal-to-products have long been considered the holy grail of opportunities for Campbell County coal,” he said. “This is based on an understanding that the PRB will be unlikely to produce the quantities in the future that were produced over the previous 40 years. The desire is to increase the value of the product derived from the coal as the production of coal goes down.”

Unfortunately, with the current price of natural gas, he said, it simply makes it impossible to use coal as a feedstock cost effectively.

He noted that almost all products that can be produced from coal, including fertilizers, transportation fuels, chemicals, oils, waxes, etc., can also be produced from natural gas or oil at a significantly lower cost.

“Coal does likely have opportunities in the markets of activated carbon, char, graphene and for the extraction of rare earth metals,” he said. “However, the costs associated with using coal to produce fuels and chemicals simply make it undesirable when gas and oil prices are so cheap, gas and oil are abundant, and the processes using gas and oil are much more developed.”

As he learned, access to capital for projects related to coal is also very limited.

“There is a lot of promising technology, but most of it has never been scaled beyond a lab bench,” Christensen said. “It is very expensive to build the first or second or third of something. Capital and investors want certainty, and coal-to-liquids/products has a lot of uncertainty.”

Up for the challenge

Christensen echoes the sentiments of many, Cornaglia-Domm said, which she credits to a lack of understanding of the larger picture when it comes to the technology itself. She points out that many countries like South Africa and China are currently running profitable CTL facilities, and in her estimation, the problem in the U.S. is massive competition with oil and gas, which up until now, nobody has wanted to take on.

“They stand to be in direct competition with CTL products,” she said. “They are big players, and many are scared to take them on.”

A petite woman bristling with energy and drive, the native Hawaiian and daughter of a coal miner is no stranger to being a small fish in a big pond of energy giants.

She’s spent the last decade building this company out of a lifelong obsession with understanding the fuel industry, beginning with ethanol in the 1980s. While pursuing current plans for SynEnergy Triad North America, she’s worked as an independent wholesale coal broker. Prior to that, she ran her own floral business and worked in resort sales in Mexico and the Southwest. A self-described workaholic who doesn’t log in very many hours of sleep, for her, this is a labor of love.

Cornaglia-Domm also feels committed to the community she now calls home, where she sees endless opportunities for economic revival in a sector that some have begun to write off.

“We need this here,” she said, “and I’m in it for the long haul.”

Touting local job opportunities and partnerships with Gillette College, the University of Wyoming and Gillette Workforce for training programs and certification degrees, she sees great opportunity for the people of Campbell County, as well as the state and nation.

Unlike out-of-state coal mine companies with long histories of bankruptcies and sales to other out-of-state coal conglomerates, she envisions the company having a long life in Campbell County.

“We’re not here to pillage and plunder,” she said. “We plan to build a company with a long life in the community and a people-first approach to doing business. Keep in mind this is a capital-intensive project.”

The climate has changed for CTL projects, she noted, and the government is interested in funding U.S. companies who take on the mantle of developing CTL projects that produce military jet and ground fuels, she said.

“Other countries are producing fuel and chemical products on a scope and scale successfully,” she said. “Specifically, China, who is producing CTL fuel products at a production level of 140,000 bpd, generating energy while successfully being economically viable.”

As for the pessimists, she said she respects their dissent.

“I listen and also respect academia and learned individuals in the energy sector,” she said. “However, we live in the greatest democratic society on the globe.”

Due to proprietary constraints, she can’t fully divulge GEI’s business model at this time, other than to say that she and her partner believe in the proven science and the economic viability of their project.

“It will take team effort and support from the community, state and our government,” she said. “Now is the time, and the place is Gillette, Wyoming.”

Correction: The original version of this story incorrectly stated that Ann Marie Cornaglia-Domm’s father was a coal miner, when he was actually a gold miner. She is also from Hawaii. The mistakes were due to reporting errors, and the Wyoming Business Report apologizes for these mistakes.