Beneath the rocky soil of western Maryland's hinterlands lies the raw material sufficient for a large alternative energy fuels project, according to the Tri-County Council for Western Maryland representing Alleghany, Garrett and Washington counties.

"We have the coal, water and land sufficient for a large coal liquids plant. We also have a transportations system, including two railroads, to move the product to market," said John E. Meyer, energy programs coordinator for the Tri-County Council.

What the counties don't have is the money to make a feasibility study of the project.

The council is seeking financing for a feasibility study on coal gasification and/or liquefaction for the area. One proposal to the Energy Department to obtain funding for a study was rejected because many of DOE's criteria could not be met.

As part of an overall program to develop an alternative fuels industry, the federal energy department awarded $100 million for feasibility studies this month to over 99 proposed alternative fuels projects.

"We are at the prefeasibility stage. We need to answer some basic questions. There are many specificis that need to be answered: What product will be developed? What company will develop it? Who are you going to sell the fuel to?" said Meyer, who is hopeful that his project will qualify for a grant next year.

The Tri-County Council officials are confidant about receiving project funding from some source, saying the first financial hurdle to cross is securing an engineering firm to do a preliminary study.

Meyer estimates the cost for this study at $150,000. He is expecting the Applachian Regional Commission, a 13-state economic aid confederation, to provide more than $100,000, with the remaining money coming from state and county sources. At the present, 12 companies have submitted bids for the preliminary study.

According to Meyer, even if federal funds were obtained today, it would be at least 1990 before fuell actually was produced from the area. Current plans call for a $1.5 billion plant that would produce 50,000 barrels of alternative fuel annually.