CROSSVILLE – An industrial development board voted Friday to proceed with caution on a deal that could pave the way for a $400 million coal liquification plant in Cumberland County’s Plateau Partnership Park.

With little information about Freedom Energy Diesel LLC, the Industrial Development Board of Cumberland, Morgan and Roane counties agreed that it saw merit in the company’s proposal but would perform due diligence on the company and seek more information before making any commitment.

“I think you need to make sure before you step into something that you know what you are getting into,” Morgan County Executive Don Edwards told the board.

“I’m sure that your company is outstanding, but we know absolutely nothing about you,” he said to Bernie Rice, Freedom Energy Diesel’s CEO.

The company is proposing a $400 million plant that would convert coal into clean-burning fuels. It wants the board to donate 120 acres in the industrial park, which is off Interstate 40 near Westel Road in Cumberland County. Freedom also wants a railroad spur to be built for the plant and an option to buy an additional 20 acres for future expansion.

Plateau Partnership Park is a joint project of the three counties, meant to boost economic development for the counties. It consists of two sites – 780 acres near Westel Road and 300 acres adjacent to the Rockwood Municipal Airport in Morgan County.

Aside from providing 158 jobs and a major boost to the industrial park, the company in return also would provide electricity and wastewater service to the park, Rice said.

Rice and the company’s chief operating officer, William H. Daniels Jr., a former Knox County commissioner and TVA manager who is a senior manager with Entergy Corp., gave some details on the company and its proposal.

Freedom Energy Diesel is a limited liability company based in Georgia. Rice would not discuss its owners but said it is owned by major technology companies and not coal companies. It was formed recently but has been in development for some time and was established to provide clean energy for a set of partners that have already contracted for its fuels. The $400 million in capital already has been raised, Rice said.

According to the World Coal Association, coal liquification involves converting coal into a liquid fuel that can be used as an alternative to oil. This can be used to produce a number of products, including ultra-clean petroleum and diesel fuel, synthetic waxes, lubricants, chemical feedstocks, and various alternative liquid fuels. Fuels derived from the coal liquification process are sulphur-free and low in nitrogen oxide and particulates. However, the process involves some controversy because it can produce more carbon dioxide than traditional oil refining.

The Cumberland County plant would be the first of a number for the company, Daniels said. Freedom Energy Diesel plans to use a proprietary process called plasma point technology to break coal into individual molecules for processing into other fuels, such as diesel, gasoline-like fuel naphtha, and activated carbon, he said.

The process is 99.5 percent pollution-free, according to Rice.

The company plans a 550,000-square-foot facility and wants to have it operational by August 2012.

At the meeting, Rice did not press for a commitment on the land donation but did ask the board to decide whether it wanted to pursue a partnership with his company. Afterward, Rice said he was pleased with the vote, although he had hoped officials would have already done due diligence on Freedom Energy Diesel.

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