Last week, it was welcome news to hear that citizens of Hanna, Wyoming are skeptical about the proposed construction of a $2 billion coal to liquids (CTL) plant by DKRW Advanced Fuels in the nearby town of Medicine Bow. To finance the project, DKRW applied for a $1.75 billion taxpayer-backed loan guarantee from the Department of Energy (DOE) in 2009. DOE has stalled the review of that request (we think their application should be flatly denied), but DKRW executives have been lobbying agency officials to restart the process. In the meantime, the company has been unable to find anyone else willing to significantly invest in the CTL plant, and it’s about time the Carbon County residents recognized that the project isn’t worth their support either.

DKRW did manage to secure some funding from Arch Coal, the potential supplier of coal for the plant, starting in 2006, but the company has since acknowledged that the prospects for the Medicine Bow plant are dim. In fact, we uncovered that Arch’s financial statements reveal that DKRW lost approximately $62 million from 2006-2013, and has been unable to repay $44 million that Arch loaned it from 2008-2013. This led Arch to conclude in its 2013 Annual Report that it considered its investment in DKRW unrecoverable. 

DKRW executives continue to talk up the Medicine Bow project’s potential, but they’ve been saying the same thing for years and the plan hasn’t improved with age. To give the company, local residents, and federal taxpayers some certainty, DOE should reject DKRW’s loan guarantee application outright. The project has always been too great a risk for taxpayers and that’s not likely to change anytime soon, if ever.