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Fairbanks coal-to-diesel plant faces problems

Officials fear $10 million federal earmark to move project along won't be well-spent

Posted: Monday, May 18, 2009

FAIRBANKS - Fairbanks officials are hoping to build a coal-to-diesel plant near Eielson Air Force Base.

However, obstacles are mounting in trying to coordinate with the military to the point that officials now fear a $10 million federal earmark to move the project along won't be well-spent.

U.S. Sen. Lisa Murkowski said a top Air Force official has told her the military will work with Fairbanks officials about concerns that- the joint endeavor is offtrack. The senator raised her concerns at a Senate subcommittee hearing last week with Kathleen Ferguson, deputy assistant secretary of the Air Force for installations.

"The community leaders don't feel that the Air Force has been listening to their concerns, and the concern is that they will go forward, spend $10 million on studies that may have very little value," Murkowski said.

Former Sen. Ted Stevens worked $10 million into the Air Force budget, earmarking the money for phase-two studies of a coal-to-liquids project at Eielson.

Jim Dodson, executive director of the Fairbanks Economic Development Corporation, said the Air Force has basically gone ahead without the involvement of local community leaders. The agency has taken the lead on studying the feasibility of the plant and spent $550,000 on an initial evaluation.

Dodson said he expected the $10 million to cover a more in-depth review.

"What I'm concerned about is that there is going to be $10 million spent and there's going to be no phase two of the study done," he said.

Dodson met earlier this month with officials from Tyndall Air Force Base in Florida, where the research is centered.

The $10 million earmark was split 50-50, with $5 million directed to research and $5 million to operations.

"I don't know where the money is going," Dodson said.

The Air Force has said it is committed to transitioning to synthetic fuels, such as those produced from coal, but prefers to purchase the product rather than manufacture it.



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