Evergreen Closing Clean-Coal Test Plant

Evergreen Energy Inc. said Thursday it is shutting an experimental coal refinery near Gillette and shifting its focus to a new generation of clean-coal technology and locations with better access to transportation, customers and more types of coal.

Spokesman Paul Jacobson said about 50 people at the Fort Union coal refinery were losing their jobs. The company planned to keep about three dozen employees to maintain the idle plant. He said he didn't know whether the refinery will be used again in any other capacity.

"We do have human resources folks on the scene," Jacobson said. "There is some severance involved, depending on the tenure and other factors."

Denver-based Evergreen broke ground on the $109 million project in 2005 and began full-scale operations early last year, Jacobson said.

The plant and onsite laboratory were used to test the company's patented K-Fuel technology. The process reduces the moisture content in low-grade coal to boost its heat value and cut emissions including mercury, sulfur dioxide and carbon dioxide.

"The plant was constructed as really the first of its kind in the world," Jacobson said. "It took a technology that was still in the laboratory and used it on a really large scale that could be used by the utility and energy industry."

In a letter to shareholders Thursday, Evergreen President and CEO Kevin R. Collins said the company worked with Bechtel Power Corporation to improve the K-Fuel plant design. He said Evergreen would pursue opportunities to build the new plants both in Asia and domestically.

Jacobson said two core processors from the Fort Union plant _ described as enormous pressure cookers that squeeze the water out of coal _ could potentially be moved to other plants.

Evergreen has not begun construction on any new plants but has advanced to a detailed engineering and viability study on a proposed 1.5 million-ton-per-year coal refinery on the Indonesian island of Kalimantan. That project is being undertaken with investment from Sumitomo Corp. of Japan.

Evergreen officials said the Indonesian project represents the company's strategy to build plants in "terminal" locales, both abroad and in the United States.

"I think it would be fair to say that strategically it makes more sense, we've concluded, to pursue more of a terminal or hub concept, where a refinery could have more access to multiple transportation modes, coal types and customers," Jacobson said.

Evergreen tested more than 100 types of coal from around the world at the Fort Union plant, Jacobson said.

The K-fuel process reduces the moisture content of low-grade coals such as lignite and sub-bituminous from roughly 30 percent to 7.5 percent and boosts the heat value from 8,000 British thermal units per pound to as much as 11,000 BTU, the company has said.