Fueling the Economy
Alternative fuel company plans project in Grants area, offers bonds

By Jim Tiffin
Cibola County Bureau

GRANTS — An alternative fuel company, Advanced Concept Technologies LLC., has requested Cibola County help sell bonds to finance a first-of-its-kind project converting coal and other materials into synthetic natural gas.

The Cibola County board of commissioners unanimously approved a resolution Monday "declaring its intent to support" the company's renewable energy technology including development, construction and financing of an 850-ton-per-day factory that converts coal and biomass to the alternative energy source.

Dennis Johnson, CEO of the company told the board and the audience that the technology is environmentally friendly. It is not an oxygen-burning technology it converts materials using steam there are no emissions.

He also said a by-product of the coal, when combined with other materials becomes a product that is used to make concrete blocks. A concrete block plant would also be part of the project.

Johnson said discussions with Lee Ranch Coal Mine are under way and it has expressed interest in participating in the project by selling coal to the fuel company.

Beth Sutton, a spokeswoman for Peabody Energy said Lee Ranch holds discussions with a variety of customers about potential opportunities, but maintains confidentiality about those discussions.

Local plant, jobs
A plant will be constructed "within 40 miles" of the mine that is 10 miles north of San Mateo and 27 miles north of Grants. The coal will be trucked to the plant that will convert it to synthetic natural gas and inject it into the El Paso Natural Gas pipeline running through Grants and Milan, Johnson said.

"This will bring between 60-70 high paying local jobs to the county;" training is straightforward and there is an availability of workers, he said.

Financing for the project would be through an industrial revenue bond that would be listed under Cibola County's name, but sold by the fuel company. The amount of the bond will be about $30 million, County Manager David Ulibarri said.

No commitment at this time
"This is a golden opportunity, to be innovative, to take the first step in developing an alternative energy source to stop our dependence on fossil fuels, which is almost all foreign oil," he said.

"We have committed nothing at this time," Ulibarri said.

The county has no liability in selling or buying the bond, Johnson said.

"The interest generated by the bond, perhaps 3-4 percent, is tax free. A company that is getting 1 percent interest on an investment or a savings account would like to get this kind of bond. It gives them more return on their investment and it's tax free because its an industrial revenue bond," Ulibarri said.

Ulibarri said that any company seeking to buy the bond would do background checks on the company, Johnson, and Dozier, thoroughly before buying the bond.

Preliminary research has shown the company owns the new technology patents and has capital itself, he said.

"They are who they say they are," he said.

County royalties
Johnson said that 10 percent of the profits, or between $280,000-$300,000 of the company's profit would be paid to the county as a royalty in exchange for the county allowing it to raise the money by selling the bond.

County Attorney Joe Diaz told the board the county gets the royalty payments in exchange for the company not being taxed on the property or the building materials bought to construct the factory.

Diaz said that the tax revenue from the property and the factory would not come close to what the royalty payments are.

How long?
At one point during the presentation, Commission Chair Bennie Cohoe asked Johnson, "If everything was approved and you move forward, how long would it be before it will be completed?"

Johnson said 18 to 24 months for a 30-year project.

Dozier said the wages for the jobs would be from $7.50 to $20 per hour, ranging in annual salaries from $15,600 to $41,600, depending on what type of job the individual would be doing.

The plant that is being proposed will be the first plant of this type because the technology is so new, Dozier said.

In addition to converting the locked energy in coal into synthetic natural gas, Johnson said items such as wood and glass and manure from cows and pigs could also be converted.