Midtown might soon be coal country

Clean Coal Technologies Inc. says it has what it takes to make Donald Trump’s favorite fuel cleaner and more efficient.

Madison Avenue may seem like an unlikely home for a coal company. But in recent months energy executives from as far aeld as Wyoming, China, India and Russia have been visiting the Midtown office of Clean Coal Technologies Inc. to discuss the firm’s methods for making dirty coal a more efficient fuel.

Founded in 2007 through a merger with another coal technology company, CCTI once traded at more than $70 a share when speculators thought clean-coal technology would soon come to fruition. It is now a penny stock, has no revenue and has just two full-time employees: a chief executive and a chief financial officer. But it does have patents. The company’s technology can remove sulfur, moisture, hydrocarbons and other volatile matter from coal, allowing it to burn hotter and more efficiently.

CCTI started in Florida, but in 2010 its CEO, Robin Eves, relocated to a shared space on Madison Avenue to be closer to investors and leverage the city’s status as an international crossroads.The strategy worked. Coal companies from India and Indonesia have since invested more than $6 million, allowing CCTI to begin building a test plant in Oklahoma. Denver-based Black Diamond Holdings and other investors, including a large Manhattan-based fund, have added $9 million since 2015.

Then came President Donald Trump. “In January the world changed,” said Eves, who spent more than 30 years in the oil industry. “We got a call from Washington: ‘We need your technology.’”

The Department of Energy has begun a review of the company’s methods. CCTI is also working with the University of Wyoming to apply for a grant from the federal agency for another test plant to explore commercial uses for the hydrocarbons and other volatile matter captured during processing.

In June the Wyoming New Energy Corp., a consortium, enlisted investment bank Piper Jaray to raise $80 million in debt funding for a 2 million-ton plant that would license CCTI’s technology. The first module, producing 160,000 tons a year, could be up and running within the next 10 to 12 months.

“The momentum for coal production and coal exports has signicantly increased with this administration,” said Aiden Neary, the company’s CFO.

at momentum got a big boost last week, when U.S. Environmental Protection Agency Administrator Scott Pruitt announced the agency was ending the “war on coal” and would seek to repeal limits on greenhouse gas emissions from existing power plants.

Refined Methods

Using technology that originated at U.S. Steel in the 1980s and was developed with government help in the early 2000s, CCTI treats coal like oil—as a crude product that needs to be refined. Its process is well suited to Wyoming’s Powder River Basin, which produces coal that is low in ash and sulfur but high in moisture. By drying it out, CCTI says it increases the fuel’s energy content by 35% to 40%, putting it on par with more expensive grades.

Coal is ranked and priced according to how many BTUs it generates per pound. Even with the $10-per-ton cost of CCTI’s processing, Powder Riv- er Basin coal, which sells for $11.50 per ton, would cost far less but produce as much energy as central Appalachian coal, which fetches $55 a ton and con- tains more ash and sulfur.

CCTI “can take every coal, regardless of its source, and upgrade it,” said Richard Horner, a deputy director in the School of Energy Resources at the University of Wyoming, which began a research partnership with the company in August. “That’s signicant because the market is changing, and there’s higher demand for higher-ranked coal.” Potential markets for CCTI include China, India and Japan, which has announced plans to build 43 coal-red power plants over the next 12 years as it phases out nuclear power. Indonesia and Australia have been Asia’s main suppliers, and their prices have been spiking to between $80 and $100 a ton. CCTI says its coal would be cleaner and cheaper, even with the roughly $30- to $35-per-ton shipping costs. The process also seals and stabilizes the coal so that it doesn’t reabsorb moisture or self-combust during transport.

Taking heat

Though coal burns more eciently after refining, it is far from clean from a climate-change perspective. CCTI’s technology reduces its coal’s carbon emissions by just 3% to 4%, the company says. “If this process penetrated the market to any signicant extent, the result would be to increase global warm- ing pollution, not decrease it,” said David Hawkins, director of the climate program at the Natural Re- sources Defense Council. “It’s simple supply and demand. They would be increasing the total supply, which would reduce the purchase price of coal, and the result would be more coal would be used.”

Hawkins argues for investment in wind and solar power, which China and India are increasingly turning to amid concerns over air pollution and climate change. He added that it is not a foregone conclusion that Japan will build all those coal plants and noted that China has been reducing its reliance on coal even as its economy has grown. For the first half of this year, China got slightly less than 60% of its energy from coal, Bloomberg reported, down from 64% in 2015, as the use of renewables and natural gas has grown. “The question is, How will the marketplace evolve?” Hawkins said.

CCTI says solar and wind are regional solutions that cannot yet take the place of coal, which ac- counts for 40% of electricity generation worldwide. Eves also argues that coal stored beside a plant is more reliable than gas that arrives via a pipeline.

Even with the administration’s support, CCTI still needs to win over critics. It is quick to tout the other benefits of its technology, including a pending process that could reduce carbon emissions dramatically, and the fact that its current methods can render even ashy coal dust-free. Health hazards from dust have helped spur the opposition that has succeeded in blocking new coal export terminals from opening on the West Coast.

Patrick Imeson, managing director at Black Diamond Holdings, said that once commercial pro- duction begins, CCTI will make its case. “Our view of the world is that this is not an easy discussion to have,” he said. “Clean coal’s been talked about for a long time. You have to show people that it works.”