Next Generation Energy Verso Paper Sartell Mill

2 Verso Paper – Sartell Energy Bio Electrical Usage & Sourcing 72 MW usage rate annual average. Sourcing as follows: 18 % produced on the mill site. 20% of on-site power is from hydro-electric 80% of on-site power is produced from a steam turbine 26% of steam used to generate power from renewable fuels (bark & sludge) Steam Usage & Sourcing 8 billion BTU’s per day fuel consumption to produce steam and electricity. 11% of this fuel is for electrical generation 24% of total fuel is renewable 4% total fuel from sludge 20% total fuel from bark 18% of mills total energy consumption is renewable.

3 Current Generation Energy Opportunities for improvement Improved conservation – economics and incentives can help justify better implementation of sound commercial technologies. Low grade heat recovery. Mill closure Replace outdated, less efficient equipment. Redesign process to use less energy. Conversion to more renewables Increase biomass use in existing boilers. Strategic use of wind/solar/others. Gasification is a commercial current technology but some of its applications are not fully proven. Can replace Natural Gas effectively.

4 Next Generation Energy Liquid Transporation Fuels VPP value prior to pulping Extract hemicellulose from chips prior to pulping and ferment into ethanol. Synergy with starch based ethanol plant? Gasification and conversion Gasify biomass and convert to LTF via Fischer-Tropsch or fermentation. Black Liquor gasification fits well with this process. Fast Pyrolysis High temp low residence time process to generate off gases(reused in the process), bio-oil, and char. Bio-oil can be refined into LTF or replace fuel oil/nat gas as site fuel. Char can be used in other products or burned in conventional boiler.

5 Hurdles for P&P industry Technological Expertise We know wood. We know transportation We know harvesting We DON’T know ethanol or other LTF production We DON’T know agricultural biomass. The industry paradigm Being a leader in cellulosic LTF or cellulosic based alternative products is a big shift and is taking time. This could be a threat to our already struggling industry (competition for wood/biomass) The paradigm is shifting!! Funding I believe true LTF production at a pulp and paper mill will likely be driven by an outside technology source and likely be a co- located independent company taking advantage of the synergies with a pulp and paper mill.

6 Verso Sartell activities in Next Generation Fuels Participation in Biorefinery Deployment Collaborative Share information and spread the cost. Develop a roadmap for public policy. Build institutional readiness. Facilitate commercialization of new technologies. Entertain 3 rd party technologies and co-location opportunities. Several contacts for our Maine mills. Met on July 17 th with Mascoma. Monitor progress and selectively participate in technology development.