GILBERTON, Pa.¬óWaste Management & Processors Inc. (WMPI) has reached a contractual agreement with the U.S. Department of Energy (DOE), allowing a grant from DOE to be combined with WMPI funding for engineering design of the USA’s first facility to convert coal waste into ultraclean diesel fuel.

The $7.8 million grant award from DOE’s National Energy Technology Laboratory in Pittsburgh will be matched with about $4 million from WMPI and other project participants to fund various studies, permitting and engineering design that must be completed before actual construction can begin, according to John Rich, Jr., WMPI president.

Once completed, the WMPI facility will convert anthracite coal waste, primarily culm and silt, into a zero-sulfur liquid diesel fuel. A combination of state, federal and private funding sources are being pursued to cover construction costs of the facility, Rich said.

The $300 million culm-to-clean fuel conversion facility will be built adjacent to an existing cogeneration plant near Frackville, Schuylkill County. In addition to an estimated 1,000 construction jobs, the plant will create some 150 permanent positions and 600 support jobs. At full operating capacity, the facility will produce about 5,000 barrels of clean diesel fuel daily, at the same time reclaiming unusable land and eliminating mine acid drainage pollution and other environmental problems.

“This agreement is a significant step forward toward energy independence and economic and environmental revitalization through the use of a proven technology,” Rich noted in announcing the agreement. “This DOE initiative allows what, up to now, has been a concept to advance to reality-based planning, design, permitting and engineering,” he said. Activities covered by the cost-share grant and contract are expected to begin almost immediately.

Other major parties that comprise the WMPI project team include: Nexant Inc., an affiliate of Bechtel National Inc., a global engineering and construction company; Texaco Global Gas and Power, an integrated energy company with a global presence in coal gasification; and SASOL Technology Ltd., the leader in the Fischer-Tropsch technology that will be used in the process.

The DOE National Energy Technology Laboratory, part of the department’s Office of Fossil Energy, selected the innovative WMPI project last year as part of its “early entrance co-production plant” program. The DOE National Energy Technology Laboratory will oversee the project. The laboratory, co-located at Morgantown, WV and Pittsburgh, PA, manages a broad spectrum of energy and environmental programs.