1. Bureau of Economic Geology Jackson School of Geosciences The University of Texas at Austin Texas FutureGen: A win for the region Ian Duncan

2. QAc9841c 100 80 60 40 20 0 Percentage of total market Year 1850190019502000 H/C>4 (Natural Gas, Hydrogen, Nuclear, Sustainables) H/C<1 (Wood, Coal) H/C~2 (Oil) U.S. Data: Annual Energy Review 1999 (EIA, 2000) World Data: International Energy Annual 1999 (EIA, 2000) Global Consumption Trends

4. THE US IS THE SAUDI ARABIA OF COAL What are the Implications for the Oil Industry High oil prices and National Security will drive gasification of coal and production of synthetic diesel for DOD Environmental NGO’s driving power companies to decarbonize fuel…. CO 2 sequestration Relatively cheap CO 2 available for EOR

6. FutureGen Preliminary Federal Requirements Design, construct, operate a 275-megawatt plant to produce electricity, hydrogen, and > one million metric tons per year of CO2 with near-zero emissions. Establish capability to sequester at least 90 percent of plant’s CO2 emissions. Demonstrate fuel flexibility (coal, lignite etc) Prove the effectiveness, safety, and permanence of CO2 sequestration. Establish standardized protocols for CO2 measuring, monitoring, and verification.

7. FutureGen Commercial Details $1 billion DOE award $750 million from DOE $250 million from a private consortium Initial RFP expected early 2006 30 day review and comment period 120 day proposal preparation period 120 day proposal evaluation period Award of the project is expected late summer of 2006 This is subject to change…..

8. FutureGen IGCC w/ CO2 Capture Coal Petroleum Coke Refinery Co- products Gasifier Oxygen Modified from Eastman Chemical Slag/Soot Electricity Steam Syngas Combustion Turbine SteamTurbine Sulfur Hydrogen Particulate Removal Solids and Co-products Steam Shift Reactor H CO 2 Sulfur

9. FutureGen Texas - Overview Early leadership by Commissioner Michael Williams and the Clean Coal Council and Foundation Commissioner Williams created FGT team and asked the Bureau of Economic Geology to lead Legislative action in 2005 session and support from state leadership State wide selection process, level playing field Broad stakeholder involvement and community buy-in

10. FutureGen Texas – The Texas Advantage Texas holds great cards: excellent geology for sequestration success, largest coal user in country, largest hydrogen market, largest producer of methanol and ammonia, most extensive hydrogen pipeline, most experience in CO2 pipelines, largest CO2 sequestration and EOR potential

11. Honorable Rick Perry Governor of Texas Texas FutureGen Advisory Board Honorable Michael Williams Chair OperationsSite SelectionProposal ResponseLegalRelations BEG Strategic Coordination – Scott W. Tinker Federal State Public CO2 Permitting EOR IGCC Fuels Transport

12. Subsurface Thickness Data Source BEG CO2 Brine Storage

13. CO2-EOR Qualified Reservoirs Data Sources BEG RRC

14. EOR Candidates Data Source BEG

15. Coal Resources Data Sources BEG RRC USGS Half of the nation’s reserves are in low btu coal, lignite and pet coke

16. Refineries Transmission Line Density More dense Less dense Coal-fired Powerplant Coal-fired Powerplant Refineries Transmission Line Density More dense Less dense Additional Parameters Refineries: Oil and Gas Journal, Dec. 23, 2002 issue Non-attainment areas: TCEQ Transmission line density: ERCOT and CEE Pipelines: Texas Railroad Commission digital database Summer Load, peak 2005: ERCOT and CEE Railroads, Power plants: TXDOT digital database, Public Utility Commission of Texas Lignite belt: Kaiser, W. R., Ayers, W. B., Jr., and La Brie, L. W., 1980, Lignite resources in Texas: BEG RI 104, 52 p. Lignite mines: Texas Railroad Commission, digital data base Fort Worth Sub-bituminous Basin: USGS digital data base

17. Preliminary Screening

18. 600 km0 200400 mi0 Alberta Mexico Commercial Propagation

19. For FutureGen to succeed: For an impact on a scale that matters in a time frame that matters — Requires: (1) flexible fuels (2) near-term propagation of FutureGen-like facilities.

20. Needs National support for national problem… Outreach and Public Education Talented well trained work force Knowledge of what happens when we scale from 1 Mt to 1 MMt to 1 GT?

21. Summary Climate change is the driver Governments create incentives and support research Industry implements at commercial scales Science and engineering are vital –implementation costs are huge –timing is critical –missteps are costly Start in regions where impact can be felt the soonest and the most

22. Thanks!