POTTSVILLE -- Jan 15 - Knight Ridder/Tribune Business News - Adam Wilson Reading Eagle, Pa.

Despite a long decline in Schuylkill County coal mining, the side effects of the industry's approximately 150 years of operations are clearly visible in a scarred landscape dotted with minimountains of coal waste. But a plan to eliminate millions of tons of that waste, known as culm, is drawing the ire of environmentalists. They claim the byproducts of turning the waste into sulfurfree liquid fuel would be more environmentally harmful than what already exists. "They'd be trading large waste-coal piles for smaller ash or slag piles that are a far greater threat to the groundwater," said Mike Ewall, director of Action PA, a Philadelphiabased environmental-activist group. Ewall was one of about 300 people at a hearing Tuesday where feelings ran strong both for and against the so-called Gilberton Coal to Clean Fuels and Power Project. The public hearing at D.H.H. Lengel Middle School, Pottsville, was the second held by the U.S. Department of Energy to determine whether the $625 million project should receive $100 million -- or 16 percent of the estimated cost -- in a low-interest loan from the federal government's Clean Coal Power Initiative. The public cost of the project-- the federal loan, $47 million in state tax credits and $465 million in state loan guarantees that Gov. Ed Rendell announced in September -- has drawn criticism "It's funny, that loan guarantee just happened to be the difference in the cost of the project," Ewall said. The facility, which would convert 1.4 million tons of culm a year into 40 million gallons of diesel fuel, heating oil and aviation kerosene, is expected to be built next to SCI Mahanoy, a medium-security prison for men in Mahanoy Township. Waste Management and Processors Inc., Gilberton, expects construction of the facility to begin in spring. The company already has buyers lined up -- the state and two trucking consortiums -- for 25 million gallons of the fuel every year. "This won't just help turn this area around, it will turn this area around," said John W. Rich Jr., president of WMPI. "Think about it, this is the first coal-oil machine in the country. That will create huge visitor interest by itself." Many blue-collar workers spoke in favor of the project, which they said would bring badly needed jobs to the economically depressed region. About 1,000 temporary jobs would be created during the construction phases and another 600 permanent jobs would be available when the facility is operational in about three years. Gary Martin, president of the Schuylkill County Construction and Building Trades Council, said Rich has promised the bulk of the construction jobs to local union members. "It's been 20 years since anyone has appreciated local labor enough to do anything about it," he said. "We wholeheartedly support this project and look forward to putting Schuylkill County workers to work in Schuylkill County." However, Sharon R. Chiao, chairman of the Mahanoy Township supervisors, gave less than a ringing endorsement of the project, despite the lure of badly needed jobs. "Washington has a rich history of catering to special interests at the expense of ordinary citizens," Chiao said. Chiao criticized a draft of an environmental-impact study the Department of Energy has prepared for the project. "There are too many 'ifs' ... 'likelys,' 'maybes' and 'possiblys' in this draft," she said. "It is simply not acceptable to have so much guessing in an impact statement." However, company officials claim there will be next to no environmental impact. Rich said the gasification process used to produce sulfur-free fuel is the epitome of clean-fuel technology. "So much of it (the opposition to the project) is emotional rather than based on logic," he said. "The gas stream for the plant must be pure or it simply won't work and you won't get a liquid product." Rich also said the project's success is crucial if more coalto-fuel plants are to be built in the United States to help wean the country from its dependence on foreign oil. "I'm not saying this is the beginning, middle and the end, but we are in a process that needs to be pursued," he said. "And in the process we create all new jobs here."