CAREFREE – Decades from now, the name Carefree could mean to energy independence what the North Carolina town of Kitty Hawk means to aviation.

With the price of crude oil topping $75 a barrel and threatening to go higher, a Carefree company plans to commercialize a technology that could produce gasoline and jet fuel from coal and various waste products such as tires and municipal refuse. Given that nearly a quarter of all the world’s coal reserves lie within U.S. borders, Alchemix Corp’s patented HydroMax gasification process could eventually help reduce American and world dependence on the dwindling supply of oil reserves.

To demonstrate the viability of its HydroMax technology, Alchemix plans to build a $30 million demonstration plant that would provide the data needed to construct the first commercial plant capable of supplying enough fuel for 240,000 vehicles. According to company Chairman Robert Horton, the commercial facility is about three‑and‑a‑half years away.

Horton emphasizes that we are now in the first stages of a prolonged energy crisis that will require the use of alternative fuels to fill the gap between the demand and supply of oil. “Foreign policy is based upon our oil dependence,” he explained. “Highly profitable oil companies are subsidized in many ways to encourage production, and military resources are deployed to protect the vital oil interests of the United States. Perhaps the greatest toll is that reliance on foreign oil threatens the economic strength and national security of the United States.”

Horton points out that wind, solar, biomass and nuclear are all domestic alternative sources that can provide energy less expensively than imported oil and have the additional benefit of producing little, if any, greenhouse gas (GHG) emissions.

“Unfortunately,” he continued, “all of these are primarily sources of electricity and none can easily be used to substitute for oil, which is refined to produce transportation fuels.”

The answer, said Horton, is coal. “Coal can be refined to produce clean, conventional fuels including gasoline, diesel and jet fuel,” he explained. “Coal is the only sufficiently available domestic energy resource which has a chance of replacing oil imports in the United States within the next few decades. By doubling U.S. coal production and using it to make diesel, gasoline and jet fuel via gasification, all imported oil could be replaced.”

Horton related that gasification and gas‑to‑liquids (GTL) technology is not new. The technology was used by Germany during World War II to produce aviation fuel for the German Air Force, The Luftwaffe. And the South African government, fearing an oil embargo over its apartheid policy, has produced a range of liquid fuels from coal for more than 40 years. Until now, however, it has been cheaper to use refined oil products, explained Horton. But the economics have changed with the rising price of crude oil to the point where companies can profitably produce products using conventional gasification technology and any one of a number of GTL technologies.

HydroMax, which is protected by numerous U.S. patents, doesn’t actually produce liquid fuels directly. It makes hydrogen, and it does it economically by using low‑cost and waste carbon feedstocks such as coal, rubber tires and municipal refuse. By contrast, today’s dominant hydrogen production method requires the use of costly, price‑volatile natural gas.

According to Horton, a Carefree resident for 26 years, other advantages of HydroMax over conventional gasification include lower capital and operating costs, fewer manufacturing steps, the production of valuable co‑products and reduced carbon dioxide emissions–perhaps by as much as nearly 60 percent.

To those who might say HydroMax sounds too good to be true, Horton counters, “This is as real as a heart attack,” adding the science supported by the technology is not in doubt.

“Three different bench‑scale reactors have been built and operated successfully by independent contractors,” he pointed out. “In addition, a larger pilot facility at the Australian National Laboratories was used to successfully demonstrate a number of key elements of the technology. Detailed independent analysis of all the work is available, including preliminary economics developed by Aker Kvaerner, the second‑largest engineering company in the world.”

To date, Alchemix has been funded by individual investors. Recently, Gilbert‑based Diversified Energy Corp. said it will sink $5 million into the demonstration plant in exchange for stock in Alchemix and a management and development contract for the plant. Horton said financing of the first commercial operation will be undertaken on the strength of long‑term off‑take contracts and federal bank loan guarantees provided by the 2005 Energy Bill for coal‑to‑liquids plants. To raise additional capital, Horton said there is a good possibility that Alchemix could go public in about two years.

A self‑described entrepreneur, Horton also has patriotic reasons for commercializing the HydroMax technology.

“Nothing is a greater threat to our economy, our security and the American way of life than dependence on foreign oil,” he exclaimed. “The success of HydroMax won’t necessarily mean cheaper oil, but it will mean America will not be held hostage by terrorist governments. It will also be great for our economy by creating jobs and helping reduce the trade deficit.”

Reach the reporter at barry@thedesertadvocate.com