Wellsville, OhioWellsville, Ohio could be the site of the first large-scale coal-to-liquids plant in the U.S.Photo: Billy Delfs for OnEarth

Cross-posted from OnEarth.

Driving his black Chevy pickup to the top of the bluff where Baard Energy wants to build the first large-scale plant in the United States that would turn coal into liquid fuels, Rick Williams points a thick index finger at the vacant homes and empty store fronts that make up his Ohio River Valley town and reminisces about what used to be.

The son of an ironworker, Williams, 56, spent much of his adult life as a union laborer, often in the local steel mills and power plants fueled by nearby coal mines. The work wasn’t hard to come by. For much of the 20th century, Wellsville, Ohio, was a small but active town of about 8,000 residents, most of them connected to one or more union locals.

But now most of the steel mills are closed, the union jobs are fading, and the town is going with them. Wellsville’s population is half what it was 40 years ago. Only 65 students graduated from the local high school this year, and all but a handful will likely leave in search of jobs. The overgrown riverfront parcels where thousands of people once made a good living have been scraped clear of factories and equipment. Of the 2,000 homes here, nearly 400 are vacant, according to federal census figures.

Williams now serves as the town’s zoning administrator, without a whole lot to do. The city issued only one permit for a new home in the last four years, he says as his Chevy crests the bluff. “This used to be a pretty lively place. There was a lot of work and a lot of things to do. Now there’s nothing here.”

So it’s not hard to understand why Williams and many of his neighbors welcomed the idea of a $6 billion coal-to-liquids plant that would create 4,000 construction jobs and require 500 people to operate. According to Baard Energy, the small West Coast energy developer behind it, at peak production the plant would transform 25,500 tons of coal a day into 53,000 barrels of aviation and diesel fuel.

But it would also be a major new source of greenhouse gases and other pollutants in a region that already suffers from significant public health problems due to air pollution. Environmental groups including the Natural Resources Defense Council and the Sierra Club are fighting to block Baard’s plans through legal challenges to government air and water quality permits.

Rick WilliamsRick Williams, Wellsville’s zoning administrator, says his town needs jobs despite the environmental risk of the coal-to-liquid plant.Photo: Billy Delfs for OnEarthWilliams and his neighbors realize the Baard plant would bring more air and water pollution to a region that’s just finally starting to get clean. The Ohio River — once so contaminated and full of sediment that only catfish and carp survived — now provides local fishermen with a regular catch of bass, bluegills, and muskie. One morning in early March, Williams says, he spent 20 minutes watching a bald eagle devour a fish as it floated past on an ice flow. “Never saw a bald eagle around here until five years ago,” he says. “The river was a lot dirtier than it is now.”

Still, given the choice, William says that he and the rest of Wellsville would prefer the jobs. “It’s too bad the working man has to choose work over the environment.”

Massive expansion of the fossil fuel era

Across America, the energy industry is taking advantage of economic desperation in towns like Wellsville and driving to develop hard-to-reach reserves of fossil fuels, while clean energy — with its own promise of job creation and a transition to a new, renewable form of production — struggles to make up ground against powerful, entrenched interests.

Though scientists raise growing alarms about climate change, and high gas prices serve as a daily reminder of just how strung out on oil this country is, the energy industry is flexing its muscles in government and the financial sector, winning permits and billions in cash to perpetuate the age of fossil fuels. The result is one of the grandest industrial expansions in recent decades, much of it at the center of the continent.

North American, Asian, and European companies are prepared to spend $15 billion annually to turn tar sands into oil in northern Canada; $7 billion annually to drill shale oil wells on the northern Great Plains; $30 billion to build a pipeline network for transporting tar-sands oil, shale oil, and natural gas through the center of the continent to the Texas Gulf Coast (an effort opposed by NRDC and many other environmental groups); and $22.6 billion to expand and modernize refineries in the Midwest, Great Plains, and Gulf of Mexico. A Canadian developer wants to open new tar-sands mines in Utah, and as of 2010, North Dakota had become the fourth-largest oil-producing state in the nation — quickly heading to No. 2 behind Texas.

These new sources of fuel are more difficult and dangerous to extract and transport than conventional crude, and they carry greater risks of air pollution, groundwater contamination, and greenhouse-gas emissions than ever before. The cleaner and safer alternatives — renewable and energy efficiency — face an overwhelming disadvantage when it comes to investment capital, consumer familiarity, and government support and subsidies. And Big Energy isn’t about to give up that advantage — no matter how many oil company commercials with windmills you see on the nightly news.

In addition, although national public opinion polls show broad support for renewable development, individual projects often have a tough time getting built, as clean energy remains unfamiliar and controversial in many communities. Hundreds of local environmental and civic groups in at least 35 states are fighting to block large-scale wind, solar, biomass, and smart grid projects because of worries about scale, safety, or damage to their views and landscapes. Working under a National Science Foundation grant, for example, Roopali Phadke, an associate professor at Macalester College in Minneapolis, has identified 200 opposition groups working to block big wind projects in 30 states.

A shift to renewable sources of electricity and electric or hybrid vehicles represents “a revolution in energy production,” Phadke says. “There is an assumption that everyone has been on board. They aren’t.”

Advantage: Fossil fuels. (Like they needed one.)

Making dirty fuel from dirty coal

Wellsville, Ohio factoryLike many Rust Belt towns, Wellsville used to depend on now-defunct factories for jobs.Photo: Billy Delfs for OnEarthThere was a time, in the 1980s and ’90s, when sociologists and economists tended to regard the Ohio River Valley and its shrunken towns as cultural anomalies, part of a national economic sacrifice zone, the result of the transition away from a t
raditional manufacturing base toward service jobs, the retail sector, and high-tech innovation.

But as the years pass, a lot more of America is starting to look like Rick Williams’ home of Wellsville — a place that has nothing going on and seems to be going nowhere. So when a venture like Baard Energy rolls into town, offering to put people to work and to put the town on the map again, it’s hard not to look at the upside.

“It seems like a real good idea,” Williams says. “We’ve got the coal. We’ve got the people. We could really use the jobs.”

That’s the overwhelming consensus in the region, says Tracy Drake, the 59-year-old chief executive of the Columbiana County Port Authority, which would oversee coal shipments by barge to the plant. “This is a region that’s used to industry. We’ve seen how existing industries have cleaned themselves up.”

Based in Vancouver, Wash., Baard is a mid-sized builder of natural gas-fired utilities, biofuels refineries, and other energy projects. If built, its Wellsville coal-to-liquids facility would likely be the first of its kind in the United States, although China already has four.

But despite popular support in Wellsville, Baard has been struggling since 2006 to secure the land, financial backing, and government subsidies needed for the plant. Last fall, the company’s chief executive, John Baardson, announced that Florida-based investors were ready to finance the first phases of the facility’s development. He said construction would commence in the spring of 2011. So far, it hasn’t. (Baard did not respond to repeated requests for comment on this article.)

Shannon Fisk, an NRDC attorney based in Chicago who is leading the lawsuit against Baard, doubts the facility will ever be built, based on the company’s difficulty securing money and the economic and environmental case he’s building against the project. “Liquid coal is the wrong way to go,” Fisk says. “It is massively expensive and could not move forward without taxpayer subsidies. Those resources should go to developing truly clean alternatives, not to developing dirty coal.”

In partnership with the Sierra Club, Fisk has unleashed state and federal actions to block the Baard plant. In September 2008, the environmental groups argued to Ohio’s Environmental Review Appeals Commission that the Ohio Environmental Protection Administration had not set strict enough limits on air and water pollution from the plant when it issued permits earlier that year. A ruling is pending.

The groups are also taking legal action to set stronger limits on carbon dioxide emissions from the plant and to protect surrounding wetlands. Fisk says the plant would produce more than 12 million tons of carbon dioxide annually from the process of turning coal into fuel; the fuel itself would produce an additional 14-plus million tons as it is burned in planes and vehicles. In other words, liquid fuel made from coal is twice as bad for global warming as regular petroleum.

Perhaps the most important effect of Fisk’s legal campaign is that in March 2009 it blew apart Baard’s bid to secure a multi-billion-dollar federal loan guarantee from the U.S. Department of Energy. That setback nearly killed the Baard proposal outright. Fisk’s research found that the Baard project was in serious financial trouble in the months following the Department of Energy decision.

The company, according to court records dug out by Fisk, took 18 months to pay the $80,000 fee for Ohio air and water permits, and paid only after the state threatened to pursue the debt with a collection agency. Twice, law firms hired by the company were not paid and withdrew representation, Fisk said. And a consulting company sued Baard for not paying fees associated with preparing the state permit applications and, according to court documents, won a $225,000 default judgment.

“Even if coal-to-liquids was a good idea,” said Fisk, “I am not sure I would want a company with this track record doing a $6 billion plant. There isn’t anything about this plant or the company that inspires confidence.”

If not liquid coal, how about gas?

Polluting factory in OhioCoal-to-liquids plants emit far more carbon dioxide than traditional fossil fuel-burning plants.Photo: Billy Delfs for OnEarthStill, it’s not clear whether the Baard proposal represents the last flicker of a dying idea or the opening foray into a potentially huge American coal-conversion industry. Periodically over the past 30 years, proposals to build coal-to-liquids plants in the United States have flourished and vanished, following the rise and fall of oil prices. In 2007, for example, as oil prices climbed, the Department of Energy was monitoring 17 proposals for coal-to-liquids plants in 10 states.

The Baard proposal and a coal-to-liquids development in West Virginia are the last still breathing. The others have been cancelled or indefinitely delayed because developers have been unable to raise the billions needed in private capital.

That, too, is a symptom of America’s new wariness. In effect, the country is so nervous about its future, so focused on the perceived risks — health, environmental, financial — of pursuing new paths in energy production that it’s basically just pursuing what it knows best: coal, gas, and oil.

As Rick Williams and his Wellsville neighbors know all too well, just holding your place in a whirlwind of change is about the worst place to be. No one has proposed big projects to harness wind or solar energy in the Wellsville region, Williams notes. But natural gas companies have begun nosing around, signing leases in preparation of drilling deep shale gas wells.

“You know anything about that?” he asks. “Will it affect our water?”

In a place with few options, even the riskiest ones can seem promising.