fischer-tropsch technology: addressing the peak oil issue today by dennis l. yakobson rentech, inc....

Fischer-Tropsch Technology:Addressing the Peak Oil Issue Today

By Dennis L. YakobsonRentech, Inc.

Presented atThe Denver World Oil Conference

Beyond Oil: Intelligent Response to Peak Oil Impacts

November 10-11, 2005Sherman Street Events Complex

Denver, Colorado

2

The world consumes two barrels of oil for every barrel discovered.

So is this something you should be worried about?

Advertisement

Newsweek Magazine – October 17, 2005

3

Introduction – The Issues at Hand

Conventional oil reserves are not located where demand is growing

No one technology can address the overall issue – fossil fuel demand is too large

Availability of infrastructure limits the use of many alternatives

A large readily-available resource is needed to offset near-term implications of peak oil

Alternatives must be clean, easily distributed and economically viable in today’s environment

4

One Potential Solution – Fischer-Tropsch (FT)

Fischer-Tropsch is a proven technology to transform under-utilized hydrocarbon resources into valuable alternative fuels and chemicals.

5

Fischer-Tropsch – 2005

10

SASOL 160,000 b/d+ Feedstock - Coal

SASOL’S SOUTH AFRICAN FACILITYSASOL’S SOUTH AFRICAN FACILITY

SecundaSecunda

Fischer-Tropsch is a proven technology to transform under-utilized hydrocarbon resources into valuable alternative fuels and chemicals.

SasolburgSasolburg

6

Fischer-Tropsch – 2005 (continued)

Mossel BayMossel Bay

10

Petro SA• 22,500 b/d+• Feedstock - Natural Gas

SecundaSecunda

SasolburgSasolburg

Fischer-Tropsch is a proven technology to transform under-utilized hydrocarbon resources into valuable alternative fuels and chemicals.

7

Fischer-Tropsch – 2005 (continued)

Mossel BayMossel Bay

Bintulu, MalaysiaBintulu, Malaysia

10

Shell• 15,000 b/d+• Feedstock - Natural Gas

SecundaSecunda

SasolburgSasolburg

Fischer-Tropsch is a proven technology to transform under-utilized hydrocarbon resources into valuable alternative fuels and chemicals.

8

Fischer-Tropsch – 2005 (continued)

NigeriaNigeria

QatarQatar

Mossel BayMossel Bay

10

Bintulu, MalaysiaBintulu, Malaysia

Sasol Oryx Project• 34,000 b/d• Feedstock - Natural Gas• Online 2006

Fischer-Tropsch is a proven technology to transform under-utilized hydrocarbon resources into valuable alternative fuels and chemicals.

SecundaSecunda

SasolburgSasolburg

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Fischer-Tropsch Technology

Production Separation& Upgrading

PowerSteam

CO + H2Tail gas

Diesel Naphtha

Synhytech – Pueblo, Colorado, 1991 - 1993

Gas-to-Liquids (GTL)

• Natural gas

Coal-to-Liquids (CTL)

• Coal• Petroleum coke

Synthesis GasGeneration

• CO2 Sequestration• Oil Recovery

Enhancement

Fischer-Tropsch

Synthesis

Ga

s C

lea

n-u

p

10

Fischer-Tropsch (FT) Drivers

Large secure resource base available – coal

No new product delivery infrastructure required

The fuels are clean-burning and meet all new and foreseeable worldwide environmental regulations

FT Slurry ReactorSynhytech, 1992

11

FT Core Product – Ultra-Clean Diesel Fuel

-42

-33

-9

-28

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

Hydrocarbons CarbonMonoxide

N0x Particulates

FT

Die

sel E

mis

sio

ns

Rel

ativ

eto

a T

ypic

al D

iese

l Fu

el(P

erce

nta

ge)

Source: An average of several government funded studies by NREL & SwRI

FT Diesel

“No New Infrastructure Required”

12

Fischer-Tropsch (FT) Drivers (continued)

Large secure resource base available – coal

No new product delivery infrastructure required

The fuels are clean-burning and meet all new and foreseeable worldwide environmental regulations

Direct increase to a nation’s refining capacity (“no bottom of the barrel”)

Enhances the production of other energy-intensive products such as power and chemicals – poly-generation

Economically viable in today’s market

FT Slurry ReactorSynhytech, 1992

13

Oil Demand – 2025

Oil Demand 2025(1)

0

10

20

30

40

50

60

70

% o

f W

orl

d

North America Middle East Emerging Asia

(1) EIA/IEA Outlook 2005, Table A.4

14

Oil Demand – 2025 vs. Carbon Resources

Reserves:(2)

Oil

Oil Demand 2025(1)

0

10

20

30

40

50

60

70

% o

f W

orl

d

North America Middle East Emerging Asia

(1) EIA/IEA Outlook 2005, Table A.4(2) BP Statistical Review & World Energy, June 2005

15

Oil Demand – 2025 vs. Carbon Resources (continued)

Reserves:(2)

Oil

Natural Gas

Oil Demand 2025(1)

0

10

20

30

40

50

60

70

% o

f W

orl

d

North America Middle East Emerging Asia

(1) EIA/IEA Outlook 2005, Table A.4(2) BP Statistical Review & World Energy, June 2005

16

Oil Demand – 2025 vs. Carbon Resources (continued)

Reserves:(2)

Oil

Natural Gas

Coal

Oil Demand 2025(1)

0

10

20

30

40

50

60

70

% o

f W

orl

d

North America Middle East Emerging Asia

(1) EIA/IEA Outlook 2005, Table A.4(2) BP Statistical Review & World Energy, June 2005

17

Advanced Clean Coal Potential Impact

(3) Efficiency 33%

USA China India

Gigawatts(1) 112 171 57

Tons Coal (dry basis) 1,154,000 1,760,000 585,000per Day(2)

Pulverized Coal Technology(3) • CO2 (tons/day) 2.9 million 4.5 million 1.5 million

IGCC w/FT(4)

• CO2(5) (tons/day) 1.2 million 1.8 million 0.6 million

• Barrels/Day 1,100,000 1,700,000 570,000

(4) Efficiency 55%(5) Includes CO2 sequestration

(2) Based upon sub-bituminous coal containing 30% by wt. moisture

(1) EIA/IEA International Outlook 20046

18

Development History of a Proven Proprietary and Patented GTL / CTL Technology

1982-1985

Sterling

19

Development History of a Proven Proprietary and Patented GTL / CTL Technology (continued)

1989

Sterling

Denver

20

Development History of a Proven Proprietary and Patented GTL / CTL Technology (continued)

1991 – 1993

Denver

Sterling

Pueblo

21

Development History of a Proven Proprietary and Patented GTL / CTL Technology (continued)

2005

Commerce City

Sterling

Pueblo

22

Development History of a Proven Proprietary and Patented GTL / CTL Technology (continued)

2006

Commerce City

Sterling

Pueblo

23

Development History of a Proven Proprietary and Patented GTL / CTL Technology (continued)

“A 25-Year Instant Success”

Royster-Clark E. DubuqueNitrogen Facility

• 2005 – Natural Gas• 830 t/d ammonia• 14 MWe imported power

• 2009 – After Proposed Conversion to Coal

• >900 t/d ammonia• ~ 5700 b/d FT fuels• ~ 37 MWe export power

24

Summary

World petroleum demand is growing at an unsustainable rate

Conventional oil supplies are defined

All available carbon resources need to be considered, engaged and utilized

New technologies need to be deployed

Depending on physical location – GTL/CTL are viable near-term solutions

“In my opinion, the United States has the potential to be the CTL capital of the world.”

– Dennis Yakobson

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Safe Harbor Statement

Statements made in this presentation regarding Rentech, Inc. and the information incorporated by reference into this release that are not historical factual statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. It is intended that such forward-looking statements be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. This section is included for purposes of complying with those safe harbor provisions. The forward-looking statements include, among other things, statements regarding the intent, belief or expectations of Rentech and its officers and can be identified by the use of terminology such as “may,” “will,” “expect,” “believe,” “intend,” “plan,” “estimate,” “anticipate,” “should” and other comparable terms or the negative of them. In addition, we, through our senior management, from time to time make forward-looking oral and written public statements concerning our expected future operations and other developments. You are cautioned that, while forward-looking statements reflect our good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from expectations. Factors that could affect Rentech’s results include the availability of financing for the projects, the decision of others as to proceeding with the projects, the timing of various phases of the projects, and the entry into definitive agreements with others related to the projects and our Joint Venture. Any forward-looking statements, whether made in this report or elsewhere, should be considered in context with the risk factors discussed or incorporated by reference in this report and the various disclosures made by us about our businesses in our various public reports including but not limited to forms 10Q and 10K filed with the United States Securities and Exchange Commission which can be accessed through the Company website at http://www.rentechinc.com/secfilings.htm at no monetary charge.

1331 17th Street, Suite 720Denver, Colorado 80202

Tel 303-298-8008Fax 303-298-8010dennis@rentk.com

www.RentechInc.com