Clean Coal Processes: Conversion of Illinois Basin Coals to Transportation Fuels, Support for the Coal Fuel Alliance(A Partnership of the University of Kentucky, Purdue University and Southern Illnois University

The Federal Energy Bill Section 417, which was passed in August 2005 authorizes $85 million to evaluate the commercial and technical viability of advanced technologies for the production of Fischer- Tropsch transportation fuels manufactured ITom Illinois basin coal and for the capital modification of existing facilities and the construction of testing facilities at the Southern Illinois University Coal Research Center, UK's CAER and the Energy Center at Purdue University. These three entities have already met several times to start the scoping of such a project and a Memorandum of Understanding between the parties is nearly finalized. Details of the management structure still need to be agreed upon but so far the approach was to share the work load evenly, avoid duplication and have mutual and several accountabilities. It is proposed to call this venture the "Coal Fuel Alliance" (CF A). 11is anticipated that an initial evaluation and selection of technologies will be pursued and capital cost estimates for the next steps will be done. The next phase will include establishing a facility of probably -1/2 barrel per day and a final phase as foreseen in the Bill will lead to a 500 gallon/day (-12 barrels/day) facility to produce quantities of Fischer- Tropsch (FT) fuels and products for larger scale testing and certification. In the initial phase a proof-of-concept research "mini refinery" will be established coupled to the 1/2 barrel/day FT reactor system to serve as basis for the subsequent 12 barrels/day product work-up facility. 11was decided that due to issues of{:osts and scale, it will not be practical to also build a gasifier to produce the syngas but to use industrial hydrogen and carbon monoxide to simulate various gasifier derived synthesis gases as feed to the FT reactor. For the 12 barrels/day unit, the amount of gas required is such that it is advisable to use an existing gasification facility and use a slipstream ITom a gasifier for the Fischer- Tropsch system. A suitable gasification plant which is the only existing gasifier in the three states involved is the Wabash IGCC plant in Indiana and the operators of that facility have already expressed their interest to collaborate with the CFA project. No decisions have yet been made in this regard. Since the Bill is only an authorization, appropriation is still to follow before funds would be available to the CFA. Information was submitted to legislators to prepare language for appropriation for FY 07, such that the very earliest funds could be available to the CFA would be by the middle of2007. In order not to lose the momentum to establish a meaningful facility to develop technology for converting Illinois basin coals (which includes Western Kentucky coals) to synthetic liquid fuels, the CFA partners have agreed to request interim funding of $100,000 each ITom their states to initiate their work. Such work is intended to ensure adequate depth of engineering detail and analysis such that the program can pick up speed rapidly when the first federal appropriations will be made.