Henderson history: Third time wasn’t the charm for local synthetic fuel plants

On at least three different occasions there have been attempts to build industrial complexes in this vicinity that would convert coal into synthetic fuels to be burned in vehicles.

They began about 30 years apart, beginning in 1948. So, if the trend continues, the next proposal ought to pop up about 2037 or so. But that seems unlikely.

On Jan. 29, 1948, The Gleaner’s lead story was a lengthy interview with U.S. Rep. Gerald W. Landis, R-Indiana, who said he thought building a federally funded synfuel plant in Henderson County was an excellent idea.

In 1944-45 the acting chief of the office of synthetic fuels – a part of the U.S. Bureau of Mines – headed investigations throughout the Tri-State area. He had several meetings with city Commissioner Robert Posey.

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“They spent a lot of time” in Henderson County, Landis said. “They spent too much time in Henderson to discard all their findings.” He said the study group thought the locations in Western Kentucky and Southern Indiana were “swell” and noted that at that time the idea was to convert the ammonia plant – the Ohio River Ordnance Works – into a facility for making synfuels.

The Gleaner of Jan. 30 carried an Associated Press story quoting Bureau of Mines Director James Boyd as saying a synthetic oil and gas industry would involve building 75 to 100 plants across the country at a cost of about $9 billion. The secretary of the interior, Boyd’s superior, had recently recommended to Congress that it spend that amount over five to 10 years.

The Gleaner’s final report on that first brush with synfuels appeared March 12, 1948. A story written Jack Hudgions said a bill had been introduced in Congress to appropriate $400 million to build three synthetic fuel plants.

Each plant would require 600 acres of land, 25 million gallons of water per day, and coal reserves of 30 million tons, which would keep it running for 25 years. Each plant would be “designed to produce 10,000 barrels of oil per day,” employ 1,500 to 3,000 people, and have its own power plant. (That last point was important for Henderson, which at that time was limping along on its 1896 power plant.)

“Military leaders have linked the need of synthetic fuel plants to the present world crisis and are very much in favor of the three plants, and several others,” Hudgions wrote.

Federal funding was approved at $60 million later in 1948. Small synfuel plants were built in Louisiana and Missouri (the latter was a conversion from an ammonia plant) but federal funding for the program ended in 1953.

Henderson County’s closest brush with synfuels came three decades later after the 1973-74 oil embargo.

In August 1977 state officials selected 800 acres near Newman -- at the Henderson-Daviess county line – to be the site of a $175 million plant to be operated by Wheelabrator Frye Inc. That project later became known as SRC-I (Solvent Refined Coal-I) when it ballooned to $1.4 billion and was backed by the U.S. Department of Energy, the state of Kentucky and the International Coal Refining Co.

A few months later, in December 1977, the state of Kentucky bought 680 acres near Baskett, where a $300 million plant to be operated by W.R. Grace & Co. was envisioned.

But the activity didn’t really get interesting until 1980. Synfuels dominated The Gleaner’s front page that year, prompted, no doubt, by the 1979 oil embargo. In late April 1980 a partnership of Texas Eastern Corp. and Texas Gas Transmission Corp. – doing business as Tri-State Synfuels Co. − confirmed plans to build a $3.5 billion plant near Geneva that would employ 3,000 people.

All of those proposed plants – as well as others scattered throughout the country – relied heavily on government subsidies. Ronald Reagan was elected president in 1980 and his administration was lukewarm about synfuels.

Environmental and health concerns also were raised locally. By the end of 1980 the battle lines were drawn.

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Throughout 1981 and 1982 there were all kinds of meetings, studies, and assessments to hash out just how the plants would affect local quality of life. City Manager Russell Sights testified before Congress in the spring of 1982, noting thousands of new employees would place burdens on infrastructure and such things as police and fire protection. Local communities should not have to bear those costs alone, he said.

By mid-1982 the Geneva plant had been placed on the back burner. And at the end of the year the Baskett plant was carved down to a quarter of its original size.

The Newman plant applied for additional federal funding, saying it was needed if the project was to remain viable; it wasn’t forthcoming, and the W.R. Grace company threw in the towel in January 1983.

By the end of 1983 it was clear none of the local plants would ever become a reality because the federal government’s Synthetic Fuels Corp. had been drained of resources. By mid-1984 it was a hollowed-out shell.

The third time did not prove the charm for local synfuel plants. In fact, it was no more than a blip compared to the dozens of stories that had been written 1980-82, mostly by my former colleague Chuck Stinnett.

A Stinnett story in The Gleaner of May 3, 2007, reported the local head of economic development had told his board that several proposals were under consideration in the Tri-County area.

“They’re very large and very real,” said Kevin Sheilley, president and CEO of Northwest Kentucky Forward. One plant represented potential investment of $3 billion and would employ 150 to 200 people. “It’s moving quickly,” Sheilley said.

The other would be a $1.2 billion project that would also employ 150 to 200 people. Sheilley declined to identify the companies involved, but said they appeared serious and were “very large multi-national companies in the energy business.”

Several other firms were also looking at building local synfuel plants, he said, by working with hedge funds or other large investors.

Overall, the companies were looking at tracts of land ranging from 150 to 1,000 acres.

“Some are serious, some are kicking tires, some are seeing what others are going to do,” he said. “We do have two with the wherewithal and commitment to do these projects. But we may not get any.”

Either way, he said, local officials would need to wait if they wanted to land the big fish.

“The thing about these large projects are that they take more time,” he said. “They’re such a large investment that none of it is going to be quick.”

Waiting did no good because none of the projects came to fruition. And given the current political and economic landscape, it appears none ever will.

100 YEARS AGO

The new manager of the cotton mill on Washington Street told the Kiwanis Club it planned to expand the company housing used by employees of the mill, according to The Gleaner of Jan. 31, 1923.

The first units, the two-story duplexes between 1200 and 1338 Washington St., were built about 1885, the same time the cotton mill opened. But the company housing continued to expand up through the 1920s. Mill manager W.C. Johnson said Consolidated Textile Corp. planned to erect 18 duplexes at Powell and Mill streets. Construction was expected to begin in early spring of 1923.

Bear Brand hosiery company – when it bought the cotton mill in 1937 – wanted no part of the company housing, so a separate real estate company was formed to manage what had grown to 94 housing units, some of which have since been razed. The entire property, including mill and housing, was about 30 acres east of Meadow Street between Center and Powell streets, stretching nearly to Atkinson Street.

50 YEARS AGO

The Henderson Police Department filed warrants against the Illinois Central and the L&N railroads for blocking traffic along the eastern edge of the city for long periods of time, according to The Gleaner of Jan. 30, 1973.

The city had an ordinance at that time that allowed streets to be blocked for no longer than five minutes. The Second Street crossing – before construction of the overpass was completed at the end of 1981 – was particularly problematic.

“Police said they have received a large number of calls complaining of being cut off and blocked by the railroads for extended periods of time.”

The Gleaner of Feb. 2 reported the L&N had been found guilty and given the minimum fine of $50. The fine was suspended for 60 days to see if the railroad began acting more courteously.

25 YEARS AGO

The Gleaner of Jan. 29-30, 1998, reported BellSouth was urging the Kentucky Public Service Commission to approve creation of a new area code because it otherwise expected to run out of numbers by mid-1999.

The problem was the rapid increase of cellular phones, fax machines, pagers and wireless communication devices.

The 502 area code was split and the 270 area code became operational April 19, 1999.

Readers of The Gleaner can reach Frank Boyett at @YesNews42@yahoo.com or on Twitter at @BoyettFrank.

This article originally appeared on Henderson Gleaner: 3rd time wasn’t the charm for local synthetic fuel plants in Henderson