Wednesday, June 15, 2011

New Coal Gasification Plant Abandons Cumberland Site, Lands In Morristown Days Later

Just a few short days ago, plans to build a massive $400 million-plus plant geared for coal gasification was being hailed in Cumberland, Roane and Morgan counties. The company, a relative newcomer called Freedom Energy Diesel, was promising jobs for some 150 people. But something happened - the project was apparently rejected, and now only days later, the plant is to built in an industrial plant in Morristown, hailed as a "miracle" by the city's Industrial Board chairman, and will offer 600 jobs.

After public notice of the Cumberland project was published in the local press, a public meeting was held to discuss some key issues, such as the value of the 100-plus acres of land the counties would donate to the company, and that both elected officials and residents were concerned that the massive amounts of coal which would be needed, the massive amounts of water needed and the fact that other infrastructure needs - roads and rail access - did not exist. Ron Woody, Roane County Executive said he had not been able to find much information about the company and was eager to here more from them.

That meeting - reported in the Knoxville News Sentinel - was May 27.

A few days later, a June 2nd article in the Crossville Chronicle quoted Freedom Energy Diesel CEO Bernie Rice on the project:

He further said the fuel is already sold and the majority of it would be used in the Knoxville, Nashville, Chattanooga region of Tennessee.

The company was recently organized and Rice could not reveal who the principal investors in the company were, other than saying they were technology-based.

(Chief Operating officer William) Daniels said the "stealth" of the project was part of the plan and thanked Crossville-Cumberland County Chamber of Commerce Director Beth Alexander; Gary Human, jobs development specialist with the state of Tennessee economic and community development; and Cumberland County Mayor Kenneth Carey for keeping quiet about the project."

On June 12th, the Morristown newspaper announced that a deal had been made over the weekend for FED to build their plant in Morristown, hiring some 450 employees to begin and then add another 150 jobs by the time the facility is completed. (The local paper has a paywall for archived articles, so I can't link to it, but I did copy some of the info from that story which I'll include below.)

FED says their operations will take in tons and tons of coal daily and convert it to a synthetic fuel which will be turned into diesel fuel. The process requires about one million gallons of water every day, though they say they reclaim much of that and will keep about 900,000 gallons of water on site in retention ponds. The company goes on to claim the process produces very little air pollution, but is mum on what materials might be released. Typically, such plants created much more carbon dioxide than traditional oil refineries. And I've seen no information on any other type of releases into the soil or water mentioned.

Certainly, new energy technologies are urgently needed.

But, there are many questions that should be answered. FED says their work will create an enormous amount of traffic on local roads and rail - for example, 100 rail cars loaded with coal are required every other day for the plant's operations, and every day some 113 tractor trailers will exit the facility, loaded with diesel fuel, and onto Highway 25-E and Interstate 81.

No mention is made in the Morristown paper of the sale or cost of the land FED wants, but does add that other 'infrastructure needs" (road and rail) will come from state grants and that FED will be applying for other grants from TVA.

As I said, urgent need for new energy tech concerns us all. But it is rather odd to me that I saw no notice of any public notices about this new facility (perhaps they will come later) and hopefully the Tennessee Department of Transportation speak publicly about the massive increase in tractor trailer traffic on already heavily traveled roadways.

I wonder too - why did the counties in Middle Tennessee drop their plans, and how much dealing was done to land the project in a new location in just a few short days?

Some excerpts from the Morristown newspaper article:

"Freedom Energy Diesel – in conjunction with the city of Morristown, Hamblen County and the state of Tennessee – announced this weekend the company has agreed to create a first-of-it’s-kind coal gasification facility in East Tennessee.

Construction is expected to begin as soon as possible and plant operations are to begin by November 2012.

The closed-loop facility – which represents a $405 million investment – will employ about 450 people in the first phase and then add another 150 jobs about 18 months later, according to sources.

"This is a miracle for Morristown," said R. Jack Fishman, chairman of the Morristown Industrial Board. "It’s a prayer answered."

At full capacity, the plant – which will cost around $405 million to construct, including equipment – will send out 113 tractor trailers of diesel fuel a day, require 100 rail cars of coal every other day and will be in production six days a week.

Training for all future plants will be conducted at the Morristown facility as well. The plant – on 115-plus acres – will be a total of 570,000 square feet with 25,000 of that dedicated to office space. Construction on the plant will begin immediately and the company plans on beginning deliveries of diesel fuel to its customers in the 3rd quarter of 2012.

The D4 process will use a million gallons of water per day but recycle 900,000 gallons kept on a trio of retention ponds on the property

The citizens group, SOCM, sent out information prior the public meeting in Cumberand County and included some of their concerns:

Plateau Partnership Park is a joint project of the three counties to encourage and develop economic development. As an incentive to attract industry development, the Industrial Development Board will consider giving away significant acreage to Freedom Energy Diesel. Please tell the Industrial Development Board that business development is very important to the area, but not at the expense of our health and environment.

Coal liquefaction has traditionally been a more expensive form of energy production (compared to natural gas and oil), but as oil prices increase, other forms of energy production such as coal liquefaction and fracking are being analyzed more closely. The coal liquefaction process involves first converting coal to gas and then into a synthetic fuel. Liquid coal requires huge amounts of both coal and energy.

Carbon dioxide production, limited utility infrastructure, and large amounts of water needed for this form of energy production are some of the major concerns that policy makers will need to address."



  1. AlishafromMorristown12:46 PM

    So, what are you saying, Joe? For or against?
    On the one hand, I - too - can understand everyone's concerns about no further information being available about the company. However, on the other hand, everything new starts some where. And, when figures such as - 1 million gallons of water and X amount of trucks using our local highways...are released to the 'general' public...we are not going to see that in perspective as to "that's the way business of this type is done." But, we are going to have a huge 'knee jerk' reaction because of the large numbers.
    Having just discovered your blog, and being impressed with your being a local and the adequate amount of research shown in your backstory - I may not be discernable about what you are trying to say?
    Are you preaching for - or against?

  2. I am not preaching for or against this project - but I do have questions, which, the way government and business talk and plan so much in private and make deals in private long before the public is made aware of development, those questions are swamped by the news reports of "jobs are coming" - I noticed all Knoxville TV stations reported this plan as just that - jobs.

    And we are surely in need of good jobs, just as we are surely in need of alternative energy ideas.

    And I do have some observations in this post - that it was in fact the questions from the Cumberland county area about the impact of this company, who is backing it, how it would be funded and more, which apparently prompted FED to almost immediately drop the plan to locate there and instead locate in Morristown.

    And certainly, the Morristown site does already have easier access to two major highways, and rail access, though as I understand that will have to be expanded to accommodate the needs for the plant's operation.

    And I do find it odd that in Cumberland county there was a public meeting held on the project, and, none held here (at least, not to my knowledge) - perhaps there will be one as the TN Dept of Transportation will likely have some perspectives on the very large increase in traffic. After all, the current interchange where 25-E exits onto I-81 is in dire need of modernizing and enlargement now. And the location, as I said, is quite close to the local college, mall and other retail locations, so safety on the roadways must be a high priority, whatever developments are proposed.

    I like to think that energy alternatives should be an ambitious goal - as should quality jobs and employment.

    But, as of now, all we have been told is that this project is called a "miracle", as reported in the newspaper that the same industrial board chairman owns. I'm sure we've only heard the very best of projections.

    So, yes, I have questions - and I would have to have some answers before I would even consider whether I am for or against the proposal. It has been my sad experience that what our community desires or what they are told are often the least of concerns of those who make big industrial plans.

  3. Not much about this deal makes a whole lot of sense, and it's likely because of William Daniels. (Looks to be the same William Daniels that was appointed to represent Fourth District on County Commission back in the aftermath of Black Wednesday.)

    I've dealt with Daniels in the past, and this is typically how he operates. It should be concerning for Morristown that Crossville was so cautious - it likely means Daniels and Company (which is now based in Atlanta? Just a few weeks ago the business address for the LLC was listed as Daniels' home address, which is not 35 miles from Crossville) were either A) not forthcoming with necessary business model data, B) in possession of a bad idea (or a good idea with a terrible execution strategy, but knowing William I doubt it's a good idea to start) or C) a little bit of both.

    Daniels has done this kind of stealth end-around stuff before. One of his last acts on the County Commission was to team up with Elaine "I'll Join Whatever Political Party Gets Me More Votes" Davis and Mike "Chipmunk" Mitchell to neuter the charter amendment process here in Knox County. (In a nutshell, the idea was to have County Commission control 2 of the 3 methods in which our charter is able to be amended, leaving the citizens only the petition process. It was defeated soundly. Daniels hasn't spoken to me since.)

    Anyway. Crossville likely dodged a bullet, and probably knew it. If I were Morristown, I'd be concerned. Daniels' planning ability is nowhere near as solid as his ability to schmooze.

  4. What's the status of freedom energy diesel's operations?