"Coal: Energy for the 21st Century and Beyond”

Gasification and BTU Conversion of Coal

Martin ConsidineChris Hagedorn

Washington University Chemical Reaction Engineering Laboratory (CREL)

“Energy: From Molecular Transformation to Systems”

October 25, 2006BTU

2 BTU

World Oil Reserves May Have Peaked

Growing Gas Demand Requires Unrealistic Imports

America is Short on Oil & Gas & Very Long on Coal

U.S. Coal is the Cornerstone to U.S. Energy SecurityU.S. Coal is the Cornerstone to U.S. Energy Security

…For Advanced Power Generation

…For Substitute Fuels: Gasoline, Natural Gas & Hydrogen

…For the Reindustrialization of America

…For Environmental Improvements

Coal: Cornerstone toAmerica’s Energy Security

3 BTU

The Resource: 27% of the World’s Coal is in the United StatesThe Resource: 27% of the World’s Coal is in the United States

U.S. is Home to 27%of World’s Coal Reserves

5 BTU

Imbalance Forecast in U.S. Gas Supply & Demand

0

5

10

15

20

25

30

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

0

5

10

15

20

25

30

22.018.2

21.121.0

26.920.9

U.S

. C

on

sum

pti

on

(T

rill

ion

Cu

bic

Fee

t) U.S

. Pro

du

ction

(Trillio

n C

ub

ic Fee

t)

Source: Energy Information Administration, Annual Energy Review 2003, 1970-2000; Annual Energy Outlook 2006 Reference Case, 2005-2030.

Imports Unlikely to Close the GapImports Unlikely to Close the Gap

6 BTU

$0

$2

$4

$6

$8

$10

$12

$14

Ele

ctri

city

Gen

erat

or

Del

iver

ed C

ost

/ M

M B

tuHigh Oil and Gas Prices Magnify

Coal’s Competitive Advantage

Delivered cost of fossil fuel at steam electric utility plants. Source: Platts Fossil-Fuel Receipts at Steam-Electric Utility Plants through June 2005. EIA November 2005 Short-Term Energy Outlook, July – November 2005. NYMEX HH Futures December 2005 – December 2010, ino.com on Dec. 2, 2005.

Coal Deliveries

Natural Gas Deliveries

Natural Gas Futures

Oil

1998 1999 200220012000 200520042003 200820072006 2009 2010

Coal Opportunity

7 BTU

NCC Sees Coal Converted toNatural Gas, Other Energy Sources

Study determined that clean coal technologies are available to turn abundant U.S. coal into multiple energy forms including electricity, natural gas, transportation fuels and hydrogen

By 2025, new capital investments of $515 billion (present value of $350 billion) in Btu Conversion technologies would create:

– 100 GW in new generation capacity

– 4 TCF of coal-to-natural-gas facilities

– 2.6 million barrels per day of coal-to-liquids

U.S. coal production would more than double to 2.4 billion tons of coal per year

8 BTU

Southern States Energy Board Sees Coal Converted to Transportation Fuels

SSEB calls for 5.6 million barrels per day of oil from U.S. coal

Would require an additional 1 billion tons per year of production

Bipartisan council includes governors and select legislators from 16 states and two territories

9 BTU

Btu Conversion Technologies Expand Markets for Coal

STEELELECTRICITY

INDUSTRIAL GAS

PIPELINE SYNGAS

SPECIALTYCHEMICALS

ETHANOL

DIESEL

JET FUEL

HYDROGEN

10 BTU

What is Gasification ?

Gasification is a controlled partial oxidation of fuels, such as coal, to produce primarily carbon monoxide (CO) and hydrogen (H2), called syngas; rather than complete combustion to carbon dioxide (CO2) and water (H20).

– Combustion: (Cm Hn) + O2 CO2 + H20

– Gasification: (Cm Hn) + 1/2 O2 CO + H2

11 BTU

What Can You do with Syngas ?

Combustion: CO + H2 + O2 CO2 + H20 (for fuel)

Water Gas Shift: CO + H20 (steam) CO2 + H2

(for hydrogen and CO2 recovery)

Methanation: CO + 3H2 CH4 + H20(for SNG)

CO2 + 4H2 CH4 + 2H20

Fischer-Tropsch: nCO + 2nH2 (-CH2-)n + nH20 (for diesel and naphtha)

+ hydro-treating / refining

12 BTU

Gasification for Btu Conversion to Gas or Liquids is a Multi Step Chemical Processing Facility

Heat Exchanger

Air Separation Unit

Gas Cleanup

Steam

Methanation Process

Or

Fischer-Tropsch Process

In-plant use of electricity

Pipeline-quality Synthetic Natural Gas

or

Ultra-low Sulfur Diesel / Jet Fuel

Coal-to-BTU Conversion Process Elements

13 BTU

Gasification Technology Differences

Moving Bed Fluid Bed (Transport) Entrained Bed

Process Description Coal feed at top of gasifier and moves down through reactor by gravity. Steam and oxygen fed through bottom of gasifier.

Solid coal particles are fluidized with syngas, and the syngas and remaining solids particles are separated. Usually operates in a low temperature (non-slagging)

Solid coal and syngas flow together in an “entrained” bed. Short residence time and high operating temperature (slagging mode). High carbon conversion through use of high-purity oxygen

Technology Providers Lurgi, EPIC Southern/KBR CoP, Shell, GE

Installed Capacity 18.7 GWth (42%) 0.9% GWth (2%) 25.4 GWth (56%)

Advantages Low ranked coalLow O2 demand

Low ranked coal High reliability / provenHigh purity syngas at high pressureMinimal bad byproducts Low ranked coal (dry feed)

Disadvanteges Tars and other bad by-products (additional capex)High O&M

Low carbon conversion (high recycle)Leachable slag

High ranked coal (slurry feed)

14 BTU

Emerging Markets Include Gasification, Liquefaction & Hydrogen

Coal’s Long-Term Markets Expanding from Two to Five

15 BTU

Details Regarding Potential Gasification Project Types

Industrial Syngas

Synthetic Natural Gas

IGCC

Power

Fischer Tropsch Liquids

Project Size(units of output)

4,000 - 10,000 mcfd equivalent

100,000 mcfd 600 MW 40,000 - 80,000 bpd

Coal Usage

(MMTPY)

0.1 - 0.2 3 2 15

Total Project Lead Time (Yrs)

2 – 2 ½ 5 ½ - 6 6 – 7 7 - 9

Indicative BTU Conversion Project Characteristics