Atlantic Research Corp. said last week it will develop a coal-water fuel despite the discontinuation of government subsidies for coal slurry technologies by the Synthetic Fuels Corp.
"We are unhappy . . . but are proceeding on our own direction," said Coleman Rafael, chairman of the nation's largest rocket manufacturing company, which is continuing its diversification efforts from its Alexandria headquarters. "We are developing a fuel that is a coal-water slurry. . . . We have said we'll sell it for 70 percent the price of oil." The product would be used principally by industrial users of heavy, relatively less refined oil.
Synfuel Corp., a quasi-governmental agency formed in 1980 to find energy alternatives to imported oil, said last week it would not provide federal price guarantees to industries interested in converting boilers to accommodate coal-water fuel mixtures.
The decision came after the agency determined that manufacturers were willing to risk developing the technology even without price subsidies. At least eight companies are developing coal-slurry projects on their own, said agency spokeswoman Karen Hutchison. "There are people willing to do it without Synfuel Corp. assistance," she said.
The agency move nixes price guarantees for proposed slurry projects in Florida, Tennessee, Illinois, and Virginia. Among these is a project in Chesapeake, Va., sponsored by a number of companies, including Atlantic Research, Bechtel Corp., and Dominion Resources, the parent of Virginia Electric Power Co.
But Atlantic Research's Rafael said that, contrary to Synfuel Corp. findings, falling oil prices mean manufacturers have less incentive to convert boilers to coal-water fuel.
The eventual conversion to coal slurry is inevitable, Rafael said, because oil prices will rise as oil becomes scarcer. "Oil is a fossil fuel which is depleting, and five years from today people will be buying coal slurry in high quantities. We want to stay in the forefront," he said.
The Synfuel Corp. announcement last week disqualified six industrial requests for subsidies, but the agency is still holding four applications from utilities. The Synfuel Corp. board has postponed a decision on eliminating the subsidies for utilities until next month because it is not clear that utilities would convert boilers without price supports.