AMERICAN FALLS - Officials advancing a revised plan to build a coal gasification plant in Power County applied for a permit this week with the Idaho Department of Environmental Quality.

Coal gasification technology, also called "clean coal," converts pulverized coal into gas and facilitates the removal of pollutants.

The latest incarnation of the coal gasification plant, announced in late June by Southeast Idaho Energy LLC, involves using the technology to make ultra-low-sulfur diesel and fertilizer ingredients including ammonia.

John Burk, director of communications with the energy company, anticipates the DEQ will approve a draft permit for the $1 billion first phase of the plant by next February.

The proposed plant would be built on 450 acres of farmland located near ConAgra Food's Lamb Weston plant.

Two years ago, the energy company announced plans to build a coal gasification plant designed to produce electricity at the former FMC site in Power County near Pocatello. Many in the Gate City denounced the proposed plant due to the potential for air pollution, and the proposal ultimately died, Burk explained, because Idaho Power wasn't interested in purchasing the electricity. But in the process of advancing the power plant, Burk said his company became aware of the local need for both diesel and fertilizer.

Burk said the new proposal, planned for completion by 2012, would have significantly reduced emissions compared with the proposed electric plant. Construction is expected to begin late next year, once an air-quality permit is secured.

"When you look at the airflow maps, it's difficult to measure anything from the facility when you get to Pocatello," Burk said in addressing concerns about potential pollutants from the plant.

The energy company officials said they've already secured senior water rights for cooling and other plant functions, and the property they've secured, previously zoned heavy industrial for a one-time coal plant proposal made by Idaho Power, is located by a key Idaho Power substation.

The plant will use about 2 million gallons of water per day and will have a combustion turbine to self-generate about 40 megawatts of energy to support its operations.

The operation is expected to employ between 150 and 200 local workers and will eventually include a second phase that will expand the plant's capacity. It will use low-grade coal from the Powder River Basin in Northeast Wyoming and will yield about 1,400 barrels of diesel per day in the first phase of operation, said Matt Lee, executive vice president of Southeast Idaho Energy LLC.

It will also produce 1,650 tons of ammonia per day, Lee said. He said 500 tons of the ammonia produced each day will be sold as is. The rest will be used for making other fertilizers.

Burk said carbon dioxide produced as a waste product of the process will likely be captured and piped to Wyoming for use in oil recovery.

"We'll be doing a lot of work with the public to explain our project and explain emissions and the benefits of the project, as well," Burk said.