SUPPLIES OF COAL UNITED STATES - 3 TRILLION TONS (50% IN WYOMING, MONTANA, NORTH DAKOTA) WESTERN COAL - 60% LOW SULFUR (0.7%S) - AT STRIP MINING DEPTH - >1000 MILES FROM DEMAND CENTERS - $5- $15/TON

U.S. COAL RESERVES RECOVERABLE - 10% U.S.G.S - 50% DOE “UNRECOVERABLE” - TECHNOLOGICALLY - ECONOMICALLY - (EXTRACTION, RECLAMATION COSTS)

AVAILABLE COAL ENERGY 3 TRILLION TONS X 50% RECOVERABLE X 2000 LB/TON X 10,000 BTU/LB = 3 X BTU U.S. CONSUMPTION = 80X10 15 BTU (TOTAL) YEAR SUPPLY AT PRESENT COAL CONSUMPTION RATES (20 X BTU/YEAR) YEAR SUPPLY

COAL RANK 1.ANTHRACITE -14,000 BTU/LB 2. BITUMINOUS -12,000 BTU/LB 3. SUB-BITUMINOUS -9,000 BTU/LB 4. LIGNITE (30% WATER) - 7,000 BTU/LB

TABLE 4 Representative Composition of Western Lignite (As Received) Proximate AnalysisUltimate analysis Fixed carbon 27.2%Carbon 44.9 % Ash 11.7%Hydrogen 3.4% Water 25.4%Oxygen 13.2% Volatiles 34.5%Nitrogen 0.2% Sulfur 1.2%Sulfur 1.2% Heating value 7500 Btu/lbAsh 11.7% Water 25.4%

FINANCIAL DILEMMA SYNTHETIC FUEL COST (2008) - $ /MM BTU INVESTMENT - 75 X BTU/YEAR PLANT, 25 YEAR LIFE - $4-6 BILLION ? COST OF OTHER ENERGY SOURCES ?? (O.P.E.C) - NEED A FLOOR ON THE PRICE OF ENERGY OVER A LONG TIME FRAME

EXTRACTION TRANSPORTATION PREPARATION CONVERSION - GASIFICATION - LIQUEFACTION - COMBUSTION POLLUTION CONTROL- PARTICULATES - SO 2 - H 2 S - NO X

EXTRACTION 1.STRIP MINING feet 2. SHAFT MINING feet 3. IN SITU GASIFICATION (2)USED AS EARLY AS 1819 IN TEXAS (1) USED SINCE 1954 (ROCKDALE) STRIP MINING - CONTOUR STRIPPING - AREA STRIPPING

ENVIRONMENTAL ASPECTS 1.STRIP MINING OF TEXAS LIGNITE AREA STRIPPING OVERBURDEN NOT HIGH SULFUR RECLAMATION COST C T = C A /T (SUFFICIENT RAINFALL) – NEGLIGIBLE IN MOST CASES C T, COST PER TON IN CENTS T, COAL SEAM THICKNESS IN FEET C A, RECLAMATION COST IN DOLLAR PER ACRE ($200 IN TEXAS)

COAL PIPELINES COAL (200 MESH)/ WATER SLURRY LARGE INVESTMENT COST CURRENT OPERATION – BLACK MESA, ARIZONA (1750 MW) 270 MILES PLANNED OPERATION – HINDERED BY EMINENT DOMAIN, WATER SUPPLY PROBLEMS NOT FEASIBLE FOR LIGNITE

FOUR UTILIZATION ISSUES 1.LOCATION 2. MODE OF EXTRACTION 3. SULFUR REMOVAL 4. FINAL PRODUCT

SOLUTIONS TO THE SULFUR PROBLEM IN POWER GENERATION 1.LOW SULFUR COAL 2. MECHANICAL TREATMENT (BENEFICIATION) 3. COAL GASIFICATION/LIQUEFACTION 4. DOLOMITE INJECTION/FLUIDIZED BED 5. FLUE GAS SCRUBBERS 1, 2, 3 PRE-COMBUSTION

FLUE GAS SCRUBBERS LIMESTONE SCRUBBING AT LOW TEMPERATURE DESIGNED FOR 90% REMOVAL COMMERCIALLY PROVEN, COST = $200/KW (vs. $1000/KW for ENTIRE POWER PLANT) HAS DISPOSABLE BYPRODUCT (e.g., C A S0 4 ) 6-8 % LOSS IN THERMAL EFFICIENCY

DOLOMITE INJECTION REMOVAL OF SO 2 SIMULTANEOUS WITH COMBUSTION C A CO 3 SERVES AS A SCAVENGER FOR SO 2 (PRODUCES C A SO 4 THROWAWAY PRODUCT) REQUIRES LOW TEMPERATURE 1600 ºF HANDLES HIGH ASH COALS LOWER EMISSIONS OF NO X, TRACE METALS ATTRACTIVE FOR SMALLER POWER PLANTS (LESS THAN 100 MW)

COAL GASIFICATION/LIQUEFACTION VERY EXPENSIVE GASIFICATION ONLY REASONABLE WHEN PLANT IS INTEGRATED COAL LIQUIDS ATTRACTIVE FOR TRANSPORTATION COMMERCIAL SCALE OPERATIONS (e.g., S.AFRICA) H 2 S/CO 2 REMOVAL ARE PROVEN TECHNOLOGIES H 2 S + O 2 = H 2 O + SO 2 H 2 S + SO 2 = S + H 2 O

SELECTION OF A GASIFIER 1.TYPE OF BED 2. OPERATING PRESSURE 3.SLAGGING, NON-SLAGGING LURGI (FIXED BED, HIGH P, NON-SLAGGING) KOPPERS-TOTZEK (ENTRAINED BED, LOW P, SLAGGING) WELLMAN-GALUSHA (FIXED, LOW P, NON-SLAGGING) WINKLER (FLUIDIZED, LOW P, NON-SLAGGING)

Kellog Brown and Root (KBR)

IGCC PROCESS

IGCC Plants in the US The Tampa Electric IGCC Project Mulberry, Florida, 1996 Using: GE Energy Gasification Output: 250 MWe The Wabash River IGCC Project West Terre Haute, Indiana, 1995 Using: The ConocoPhillips E-Gas Gasification process Output: 262 MWe

PREDICTIONS(MADE IN 1990) ? 1.COAL COMBUSTION WILL CONTINUE AS THE DOMINANT MODE OF COAL UTILIZATION DURING THE REST OF THIS CENTURY. 2. SYNTHETIC FUELS WILL BECOME POPULAR AGAIN IN THE FUTURE (HISTORY REPEATS ITSELF) – PERHAPS 10 YEARS FROM NOW, THE U.S.A WILL HAVE ANOTHER ENERGY “CRISIS”. 3. PREDICTIONS FOR 2010?