The Two Elk site seen on Google Earth as it appeared in June 2016. (Google Earth)

A developer says it will buy North American Power Group’s Two Elk property in southern Campbell County. Wyoming New Power has also requested $100 million in industrial development revenue bonding for a clean-coal processing plant at the site.

The property is owned by Two Elk developer Michael J. Ruffatto, who pleaded guilty to criminal fraud in October 2016. Federal prosecutors said Ruffatto falsely billed millions of dollars to a Department of Energy stimulus grant for testing the viability of carbon sequestration at the Two Elk site. Ruffatto won a fifth sentencing delay in October to raise money for a large cash settlement with the government.

Black Diamond Holdings managing director Patrick Imeson spoke to Campbell County commissioners Tuesday morning. The Denver-based private equity firm owns an interest in Wyoming New Power, which would use a coal-drying and liquefaction process now under development at a testing facility in Oklahoma to remove moisture and increase the heating value of waste coal from nearby Powder River Basin mines. Wyoming New Power will market the refined coal as clean energy.

Waste coal doesn’t meet utility customer quality specifications. Mines are typically permitted to rebury the unused, unmarketable waste coal.

The plant would be built by Kiewit Construction, and the first phase of the project would go into operation in about six months, Imeson said. The eventual goal is to process and market 2 million tons of refined coal annually.

In a follow-up interview with WyoFile, Imeson said the facility could include power generation. But that’s not part of the current proposal.

“It creates a product for export, and saves money on shipping by reducing the weight, and it raises the Btu [British thermal heating unit] value,” Imeson told WyoFile.

Two representatives of Piper Jaffray, an investment bank and asset management firm that seeks to raise money for the facility, joined Imeson at the Campbell County commission meeting. The initial cost of the facility is about $100 million, the same amount requested for industrial development revenue bonding, they said.

Each state is allocated a certain amount of industrial development revenue bonding authority, which is intended to help industrial projects that might not otherwise gain financing. The state doesn’t provide or guarantee funds in issuing IDR bonds. They are allocations for tax-exempt financing, which grantees use to secure backing from other investors.

IDR bonding must be approved by the county in which the development takes place, and by the governor’s office. Imeson indicated to Campbell County commissioners the IDR request has tentative support from Gov. Matt Mead’s office, “with conditions.”

Gov. Matt Mead advisor Jerimiah Rieman told WyoFile he spoke with representatives of Wyoming New Power in April to help make necessary connections to apply for the bonding, but said the governor’s office has no request before it, nor has it considered conditions.

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The deadline for approval for the next round of IDR allocations is Dec. 10. The Campbell County commission will hold a public hearing regarding a resolution in support of the bond request Nov. 21.

The state backed North American Power Group’s Two Elk project with bonding authority and sales tax dollars. Two successive Wyoming governors, Republican Jim Geringer and Democrat Dave Freudenthal, gave North American Power Group $445 million from the state’s allotment of tax-exempt industrial bonds to finance a 320-megawatt coal-fired power plant. Wyoming state officials, meanwhile, ponied up $11 million in sales tax dollars to build roads and infrastructure to support the proposed plant.

Roads were built, along with a concrete pad and metal-sided building, but not the Two Elk plant.

Imeson said Wyoming New Power will benefit from Two Elk’s permitting work, but will apply for a new air quality permit to emit pollutants from the plant.

“We think if billed as clean power, we think we can turn that [perception of coal as dirty] around, that it has no environmental footprint, essentially,” Imeson told the commission.  

Asked whether Ruffatto will have anything to do with the new development, Imeson said no.

Commissioners said there will be skepticism of the project because the coal-drying process has been the basis for several proposed coal projects in Wyoming over the years. None have come to fruition.

“That’s not part of our legacy,” Imeson told WyoFile. “We’re essentially buying a piece of dirt. We’ve been investing in coal technologies since 2001.”

Coal is one of the few products that is sold unrefined and, like oil, there’s market opportunities for refined products, Imeson said.

Wyoming New Power’s coal technology partner, Clean Coal Technologies, Inc., has made significant improvements to the coal refining process, he said. The University of Wyoming recently signed a memorandum of understanding with CCT to support its research in advancing the technology.


Rone Tempest contributed reporting to this story.

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 25 years as a statewide reporter and editor primarily...

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  1. Here is a link to the proposal before the Campbell County Commissioners on the bonds. Looks like these guys propose to use the same category as Two Elk — “solid waste disposal” with the rationale that they will be “recycling” and “disposing” of waste coal from nearby mines. It’s a bit of a creative reading of the rules.

  2. It’s days like this when I bemuse that Wyoming leads the world in Victorian steampunkery…