SCRAP TIRE MARKET DEVELOPMENT BY TERRY GRAY TAG RESOURCE RECOVERY TIRE WORKSHOP 2013 SAN ANTONIO, TEXAS APRIL 3, 2013

PERSPECTIVE FIRST PROGRAM IN MINNESOTA IN 1984 FIRST PROGRAM IN MINNESOTA IN 1984 MANY U.S. STATES STILL DON’T HAVE SUCCESSFUL PROGRAMS MANY U.S. STATES STILL DON’T HAVE SUCCESSFUL PROGRAMS <1% UTILIZED IN 1984, BUT ABOUT 80% IN 2011 <1% UTILIZED IN 1984, BUT ABOUT 80% IN 2011 MEXICO CAN ACCELERATE ITS GROWTH BASED ON GOOD AND BAD HISTORICAL EXPERIENCES MEXICO CAN ACCELERATE ITS GROWTH BASED ON GOOD AND BAD HISTORICAL EXPERIENCES

US SCRAP TIRE MARKET TRENDS:

MAJOR APPLICATIONS

ENERGY CEMENT KILNS CEMENT KILNS POWER GENERATION POWER GENERATION PAPER MILLS PAPER MILLS DEDICATED FACILITIES DEDICATED FACILITIES PYROLYSIS/GASIFICATION PYROLYSIS/GASIFICATION

U.S. TIRE-DERIVED FUEL MARKET TRENDS:

U.S. TIRE-DERIVED FUEL MARKETS 2011

CEMENT KILNS ENVIRONMENTALLY EXCELLENT ENVIRONMENTALLY EXCELLENT ECONOMICALLY ATTRACTIVE ECONOMICALLY ATTRACTIVE QUICKLY DEVELOPED QUICKLY DEVELOPED GENERALLY WHOLE TIRES, SOME TDF GENERALLY WHOLE TIRES, SOME TDF NEEDS CONSISTENT SOURCE NEEDS CONSISTENT SOURCE PROGRAM CORNERSTONE PROGRAM CORNERSTONE

MODERN CEMENT FACILITY

CEMENT KILN

MANUAL FEED SYSTEM

AIR LOCK

INTO KILN

RAPID COMBUSTION

POWER AND PAPER INDUSTRIES SPECIFIC BOILER TYPES INCLUDE CYCLONE, STOKER-FIRED, CFB SPECIFIC BOILER TYPES INCLUDE CYCLONE, STOKER-FIRED, CFB DISPLACES COAL OR OTHER SOLID FUEL DISPLACES COAL OR OTHER SOLID FUEL USES NOMINAL 1” OR 2” TDF, BEAD WIRE REMOVED USES NOMINAL 1” OR 2” TDF, BEAD WIRE REMOVED

CHIPSIZE500,0001,000,0001,500, ”+69%-11%-42% 1.5”+82%BASIS-14% 1.0”+94%+35%0% COMPARATIVE TDF PRODUCTION ECONOMICS (CHIP SIZE VS TIRES/YR)

PYROLYSIS HISTORICALLY UNSUCCESSFUL HISTORICALLY UNSUCCESSFUL NO COMMERCIALLY SUCCESSFUL SYSTEMS IN NORTH AMERICANO COMMERCIALLY SUCCESSFUL SYSTEMS IN NORTH AMERICA OVER $500 MILLION EXPENDEDOVER $500 MILLION EXPENDED MAJOR COMPANIES AND SMALL PROMOTERSMAJOR COMPANIES AND SMALL PROMOTERS

CRITICAL ISSUES TECHNICAL PERFORMANCE TECHNICAL PERFORMANCE UNRELIABLE OPERATIONUNRELIABLE OPERATION EXPLOSIONS/FIRESEXPLOSIONS/FIRES ENVIRONMENTAL ISSUESENVIRONMENTAL ISSUES AIR AIR CHAR DISPOSAL CHAR DISPOSAL ECONOMIC PERFORMANCE ECONOMIC PERFORMANCE GAS UTILIZATIONGAS UTILIZATION OIL ONLY BLENDSTOCKOIL ONLY BLENDSTOCK CHAR MARKETCHAR MARKET

CIVIL ENGINEERING LIGHTWEIGHT FILL LIGHTWEIGHT FILL DRAINAGE AGGREGATE DRAINAGE AGGREGATE WHOLE TIRES IN RETAINING WALL CONSTRUCTION WHOLE TIRES IN RETAINING WALL CONSTRUCTION

Dixon Landing Interchange PROBLEM: Embankment Constructed on Bay Mud PROBLEM: Embankment Constructed on Bay Mud SOLUTION: Use TDA for the core of the embankment SOLUTION: Use TDA for the core of the embankment CHEAPEST SOLUTION: Caltrans saved $470,000 CHEAPEST SOLUTION: Caltrans saved $470,000 USED: 600,000 tires USED: 600,000 tires

Typical Cross Section

Spread with bulldozer

Rt. 91 Wall in Riverside, CA Freeway widening Freeway widening Objective: show that reduced earth pressures can reduce overall wall construction costs Objective: show that reduced earth pressures can reduce overall wall construction costs Length: 260 ft Length: 260 ft Tires used: 75,000 PTE Tires used: 75,000 PTE

Rt. 91 wall cross section

Half of TDA in Place

Potential Future Savings for Walls Lower pressure on wall  less rebar Lower pressure on wall  less rebar Potential reduction = 28 tons/100 ft Potential reduction = 28 tons/100 ft Potential cost savings = $13,000/100 ft Potential cost savings = $13,000/100 ft

RETAINING WALLS WHOLE TIRES MECHANICALLY JOINED TO STABILIZE OR RETAIN SLOPE WHOLE TIRES MECHANICALLY JOINED TO STABILIZE OR RETAIN SLOPE NOT BROADLY APPLIED IN US DUE TO LABOR COSTS NOT BROADLY APPLIED IN US DUE TO LABOR COSTS MINIMAL CAPITAL EXPENSE FOR SMALL VOLUMES MINIMAL CAPITAL EXPENSE FOR SMALL VOLUMES

CRUMB RUBBER APPLICATIONS SPORTS SURFACES SPORTS SURFACES MOLDED PRODUCTS MOLDED PRODUCTS RUBBER-MODIFIED ASPHALT RUBBER-MODIFIED ASPHALT DECORATIVE MULCH DECORATIVE MULCH

CRUMB RUBBER CHARACTERISTICS SLOW OVERALL MARKET GROWTH SLOW OVERALL MARKET GROWTH HIGH CAPITAL HIGH CAPITAL HIGH MAINTENANCE HIGH MAINTENANCE MARKET CHALLENGES MARKET CHALLENGES

RURAL CONSIDERATIONS VOLUME SENSITIVITY VOLUME SENSITIVITY REGIONAL PLANS, COLLECTION CENTERS OR PROCESSING FACILITIES REGIONAL PLANS, COLLECTION CENTERS OR PROCESSING FACILITIES MOBILE PROCESSING MOBILE PROCESSING CAREFULLY EVALUATE BALE APPLICATIONS BEFORE STARTING CAREFULLY EVALUATE BALE APPLICATIONS BEFORE STARTING

SUGGESTIONS FOCUS ON ENERGY (ESPECIALLY CEMENT KILNS) INITIALLY FOCUS ON ENERGY (ESPECIALLY CEMENT KILNS) INITIALLY DEVELOP CE DESIGN EXPERIENCES AND PRACTICES DEVELOP CE DESIGN EXPERIENCES AND PRACTICES BEGIN TO ENCOURAGE CRUMB MARKETS, BUT AVOID PREMATURE OVER-COMMITMENT BEGIN TO ENCOURAGE CRUMB MARKETS, BUT AVOID PREMATURE OVER-COMMITMENT

PROCESSING EQUIPMENT APPLICATIONS RANGE FROM WHOLE TIRES TO FINE POWDER APPLICATIONS RANGE FROM WHOLE TIRES TO FINE POWDER SPECIFIC EQUIPMENT REQUIRED TO PRODUCE EACH SIZE PRODUCT SPECIFIC EQUIPMENT REQUIRED TO PRODUCE EACH SIZE PRODUCT KNOW MARKET BEFORE PURCHASING EQUIPMENT KNOW MARKET BEFORE PURCHASING EQUIPMENT

KEYS TO SUCCESS LEARN FROM OTHERS’ SUCCESS AND FAILURE LEARN FROM OTHERS’ SUCCESS AND FAILURE EVALUATE BEFORE CHARGING EVALUATE BEFORE CHARGING CHALLENGE “MAGIC” PROPOSALS CHALLENGE “MAGIC” PROPOSALS RECOGNIZE LOCAL MARKET VARIATIONS RECOGNIZE LOCAL MARKET VARIATIONS RECOGNIZE REALITY RECOGNIZE REALITY

CONTACT INFORMATION TERRY GRAY TAG RESOURCE RECOVERY PHONE: (281)