By Daniel Trotta CENTRALIA, Pa., Jan 16 (Reuters) - Mayor John Lokitis sits peaceably in his living room, portraits of coal miners from his family adorning the walls. A coal-burning stove from the 1940s pushes back the freezing air. A few hundred yards (metres) away, wisps of steam rise from cracks in the earth, evidence of the underground coal fire that has been burning in Centralia, Pennsylvania, since 1962. Lokitis knows all his constituents. There are only 10 people left in town. Everyone else moved away due to the fire, which may take decades more to burn out. "This is home. I'm the fourth generation in my family to live in Centralia and I see no reason to leave," says the mayor, 37, who drives to Harrisburg, an hour away, to his job as a state auditor. Lokitis believes the dangers to the town where his Lithuanian great-grandfather settled were overstated, perhaps even maliciously so, to scare the 1,000 people who lived here away from the underground treasure. All but 10 Centralians took a government buyout and sold their homes, which were demolished. Just a few of the narrow, 19th Century row houses remain, sticking out like lone teeth on once-filled streets. Despite the fire, the holdouts of Centralia prize the hard, black and shiny anthracite, a type of coal abundant within a 500-square-mile (1,300-square-km) triangle in northeast Pennsylvania. It is purer than the more abundant and cheaper bituminous coal that fuels half of U.S. electricity output. Anthracite demand peaked around World War One and has been in a long decline since the advent of oil and the migration of steel production overseas. "This 500 square mile region was once the most prosperous region of the United States and disproportionately contributed to the growth of American industrialization," said Walter Licht, co-author with Thomas Dublin of "The Face of Decline: The Pennsylvania Anthracite Region in the 20th Century." "Now it's in the midst of an 80-year regional economic collapse." A COAL COMEBACK? Coal prices climbed in tandem with oil in 2007 but that did little to help the anthracite region, which lives off a small niche market in steel production, home heating and water filtration. Lokitis keeps some in his cellar and burns about two tons each year to keep warm. The United States produced 1.5 million short tons (1.36 million metric tonnes) of anthracite in 2006, just 0.13 percent of overall coal production and down from 4.6 million tons in 2000 and a high of 100 million tons in 1917. "The anthracite industry did to wood-cutters what the oil industry did to us," said John Rich, an entrepreneur promoting one option for reviving economic activity in the region. Rich is trying to build a $1 billion plant in nearby Gilberton, to turn coal waste known as culm into 5,000 barrels of diesel fuel per day. The technology can harvest culm, which retains much of coal's heating value and is freely available throughout coal country. Piles stand as reminders to operations gone bust. Centralia has its own culm mountains, overgrown with weeds, on the edge of town. "We can convert that into a lower cost transportation fuel, employ people, create tax receipts and stop hemorrhaging dollars from this country," Rich said. The plant has support from the state and federal governments but opponents fighting against local permits worry about the ground, air and water pollution it would create and contend it would emit more greenhouse gases than a conventional petroleum refinery. The project is already years behind schedule. "Everybody wants to go after the darling fuels of wind and solar and ethanol. A lot of people have just forgotten about coal. It's still there and plugging away," said Duane Feagley, executive director of the Pennsylvania Anthracite Council, an industry group. THE DAY THE EARTH CAVED IN Even if anthracite rebounds, Centralia may still be unable to benefit because its supply is on fire and officials have given up trying to extinguish it. In 1969, they created an underground barrier made from the remains of burnt coal to stop the fire, all but eliminating concern until it become obvious the barrier failed. In 1981, a teen-ager playing in his grandmother's yard fell into a hole in the earth. He grabbed onto a tree root, hearing the fire hiss below, until his cousin pulled him to safety. The story of what followed -- as people detected dangerous levels of gas in their basements and townspeople argued over the gravity of the danger -- was told in the 2007 book "The Day the Earth Caved In" by Joan Quigley, a descendant of Centralians. In 1982, the U.S. government decided to buy all the homes in Centralia and relocate its people, a relative bargain at $42 million versus the estimated cost of $660 million to put out the fire. To many, home was a powerful anchor, so people resisted moving. Others were eager to take the government buyout, figuring no-one else would buy a home in a future ghost town. Today the fire still burns, spreading through subterranean chambers dug by coal miners over the years and through natural fissures in the earth. Ground shifts and cave-ins create new pockets where air migrates, expanding the borders of the fire. The fire runs 300 to 400 feet (90 to 120 metres) beneath a surface area of some 350 acres (1.4 square km), reaching temperatures of 1,400 degrees Fahrenheit (760 degrees Celsius), estimates Tim Altares, a geologist with the Pennsylvania Department of Environmental Protection. "It hasn't reached its natural limits yet. It could burn for decades, possibly even longer," Altares said from amid the vapors on a perch above town. "A few years ago I actually melted my boots up here because I was taking temperatures and wasn't careful where I was walking." Still, the holdouts remain. Some are elderly. Some, like Lokitis, feel duty bound to keep the town alive. Others like John Comarnisky, a 53-year-old school teacher, enjoy the solitude. "People have called it a ghost town, but I look at it as a town that's now full of trees instead of people," Comarnisky said. "And truth is, I'd rather have trees than people." (Reporting by Daniel Trotta; Editing by Eddie Evans)
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