Anchorage Daily News

FAIRBANKS -- A study commissioned by the Fairbanks Economic Development Corp. is touting the value of a local plant that could turn coal and biomass into liquid fuel.

The 179-page feasibility study said coal-to-liquids technology can work in a northern environment. Based on $120 per barrel crude oil, the report concluded, a plant would be financially viable. The current oil price is less than half of that.

Even with declining oil prices, such a project could pan out as a public-private partnership, said development corporation Jim Dodson, chief executive.

The development corporation commissioned the $550,000 study in May from Toronto-based Hatch Ltd. The report was paid for by a $300,000 state appropriation and $250,000 from the Fairbanks North Star Borough.

A coal-to-liquids plant could cost $4 billion to $7.4 billion, depending on output volume and feedstock. Plans envision using coal mined from Healy, but the study indicated that a combination of coal and natural gas could significantly cut harmful byproducts, including fly ash, slag and carbon dioxide.

The plant also could produce useful byproducts. Tremendous quantities of steam could feed district steam heat lines at Eielson Air Force Base, Fort Wainwright and even Fairbanks. The facility could generate all 120 megawatts or so of electricity needed for operations, and have around 40 megawatts left to shoot into Golden Valley Electric Association's grid.

Dodson cautioned that the feasibility report is only 3 to 4 percent of the total engineering needed for a project.

"It's on the preliminary end of this, but it is a necessary step we had to go through," he said.

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