1. The Montana Coal Gasification and Fischer-Tropsch Project Joe Wendland Cliff Robbins

2. Introduction Technical aspects of Fischer-Tropsch Technical aspects of Fischer-Tropsch History of Fischer-Tropsch History of Fischer-Tropsch Environmental impact Environmental impact Economic overview Economic overview Selected sites for advanced coal development Selected sites for advanced coal development Analysis of these sites Analysis of these sites

3. Technical Fischer-Tropsch Coal to Liquid Coal to Liquid Direct Direct Coal –> Crude Oil Coal –> Crude Oil Indirect (Fischer Tropsch) Indirect (Fischer Tropsch) Coal -> Gas -> Crude Coal -> Gas -> Crude Potential to reduce cost of Conversion Potential to reduce cost of Conversion

4. Brief History of Coal Gasification and Fischer-Tropsch Germany during WWII Germany during WWII Parallel plate reactor Parallel plate reactor South Africa during Apartheid South Africa during Apartheid Arge reactor (Shell and tube reactor) Arge reactor (Shell and tube reactor) China and Montana China and Montana Learning from past experiences Learning from past experiences

5. Environmental Impact Carbon emissions Carbon emissions Climate change (cost big 5-20% of GDP Stern report) Climate change (cost big 5-20% of GDP Stern report) Carbon sequestration Carbon sequestration More or Less than conventional Crude? More or Less than conventional Crude? Strip Mining Strip Mining Not too bad Not too bad

6. Economic Overview Historic Price of oil: $13 - $75 Historic Price of oil: $13 - $75 Current Price: $60 Current Price: $60 Fischer Tropsch - $40 / bbl (sequestration?) Fischer Tropsch - $40 / bbl (sequestration?) Construction cost - $750 million Construction cost - $750 million Construction time – 5 years Construction time – 5 years

7. Montana

8. Selected Sites for Advanced Coal Development Bull Creek Bull Creek Colstrip Colstrip Decker Decker Kinsey Kinsey Nelson Creek Nelson Creek Otter Creek Otter Creek

9. Pros and Cons of Selected Sites Pros Most sites have sufficient water sources Most sites have sufficient water sources State government State government Existing transportation infrastructure to support initiation of some proposed sites Existing transportation infrastructure to support initiation of some proposed sites Large amount of coal in reserves Large amount of coal in reserves

10. Pros and Cons of Selected Sites Cons Addition to transportation infrastructure Addition to transportation infrastructure Additional pipelines needed since most are operating near full capacity (80-90%) Additional pipelines needed since most are operating near full capacity (80-90%) Initiation costs and lack of federal funding Initiation costs and lack of federal funding

11. Conclusion Many challenges exist Many challenges exist Challenges can be overcome Challenges can be overcome Benefits of Economic Development and Energy Security Benefits of Economic Development and Energy Security