CO2 Solutions For A Carbon Constrained World

CO2 Solutions For A Carbon Constrained World

Rentech, Inc.September 10, 2008

The Southern Coals ConferenceCincinnati, Ohio

Future Markets for CoalFuture Markets for Coal•• Coal to liquids is one of the largest growth Coal to liquids is one of the largest growth

potential for new coal consumption potential for new coal consumption –– One ton of coal can produce two barrels of refined One ton of coal can produce two barrels of refined

fuelsfuels–– 2005 diesel consumption in the US was 4 million 2005 diesel consumption in the US was 4 million

barrels per daybarrels per day–– If CTL was to capture 10% of market:If CTL was to capture 10% of market:

-- Equals approximately 100 million tons on Equals approximately 100 million tons on new coal demand per yearnew coal demand per year

•• CTL cost effective in todayCTL cost effective in today’’s markets market•• CTL, along with any coal application, requires CTL, along with any coal application, requires

a cost effective, government and industry a cost effective, government and industry sponsored COsponsored CO22 solutionsolution

Future Markets for CoalFuture Markets for Coal•• Who should lead the effort?Who should lead the effort?

–– States with coal reservesStates with coal reserves–– States with EOR opportunitiesStates with EOR opportunities–– States with sequestration opportunitiesStates with sequestration opportunities–– Coal companiesCoal companies–– CTL CompaniesCTL Companies–– Federal governmentFederal government

•• Why?Why?–– More jobsMore jobs–– Greater energy securityGreater energy security–– Decreases trade imbalanceDecreases trade imbalance–– Improves local economiesImproves local economies

•• Rentech has a project development example of how Rentech has a project development example of how these groups can work togetherthese groups can work together

Rentech Strategic Fuels & Rentech Strategic Fuels & Chemicals ComplexChemicals Complex

•• Located in Adams Co., near Natchez, MSLocated in Adams Co., near Natchez, MS

•• Approximately 450 acre siteApproximately 450 acre site

•• Mississippi River accessMississippi River access

•• 28,000 BPD FT Fuels production28,000 BPD FT Fuels production

•• Approximately 13,500 TPD Coal or Petcoke Approximately 13,500 TPD Coal or Petcoke feedstockfeedstock

•• Denbury Resources CODenbury Resources CO22 offtakeofftake for EORfor EOR

Advantages to Natchez Location

•• Coal and pet coke Coal and pet coke availableavailable

•• Opportunity to sell COOpportunity to sell CO2 2 to to chemical and fuels chemical and fuels marketsmarkets

•• Access to local slag and Access to local slag and sulphursulphur consumersconsumers

•• Access to international and Access to international and domestic marketsdomestic markets

•• Access to regional power Access to regional power marketsmarkets

•• Skilled workforceSkilled workforce•• Outside hurricane zonesOutside hurricane zones

Coal & Pet Coke

Pet Coke

NatchezNatchez

Oil Fields

Chemicals & Fuels

Fuels

CO2

CO2

Sulfur & Slag

Project Layout

Rentech Strategic Fuels CenterRentech Strategic Fuels CenterPlant Plant Layout, Natchez, Ms , Natchez, Ms Superimposed on Aerial of SiteSuperimposed on Aerial of Site

Rentech Synthetic Fuels Facility

Gasifier AGRRentech Process

Tail gas handling

Upgrading

Compression & drying

CO2 to Pipeline

Ultra Clean Fuels

Solid Fuel

CO2 captured from gasification and shift reactions

Can CTL Meet or Beat Crude Oil Diesel? Before Sequestration

Extraction/Production Conversion/RefiningTransportation/Distribution End-Use Combusion

g C

O2-

eq/m

ile in

SU

V

12001200

10001000

00

800800

600600

400400

200200

Il #6 Coal Baseline Wyoming CoalArab Light Crude OilArab Light Crude Oil Venezuelan Venezuelan SyncrudeSyncrude

Based on MaranoBased on Marano--Ciferno CTL Study forCiferno CTL Study for NETLNETL

Can CTL Meet or Beat Crude Oil Diesel? With Sequestration of Process CO2

Extraction/Production Conversion/RefiningTransportation/Distribution End-Use Combustion

Il #6 Coal withSequestration

g C

O2

e/m

ile in

SU

V

12001200

10001000

00

800800

600600

400400

200200

Wyoming withSequestration

Arab Light Crude OilArab Light Crude Oil Venezuelan Venezuelan SyncrudeSyncrude

Based on MaranoBased on Marano--Ciferno CTL 2001 Study forCiferno CTL 2001 Study for NETLNETL

GHG Profile for Natchez ComplexGHG Profile for Natchez Complex CTL DieselCTL Diesel

XtL Conv. End-Use

Combustion

CTLElectricity

70.2%

23.9%

0.8%

1.9%

Pet Coke Transport

Diesel Transport & Distribution

3.1%

0.4%

No CCS With CCS

9.1%

CTLElec. 31.7%

57.4%

End-UseCombustion

CTL Conversion

1.4%

Natural Gas Production0.2%0.1%

What is Carbon Sequestration and What is Carbon Sequestration and Why is it Important?Why is it Important?

From Scott Klara Presentation, DOE NETL, April 12, 2007

•• Capture and storage Capture and storage of COof CO22 and other and other greenhouse gases greenhouse gases that would be emitted that would be emitted to atmosphereto atmosphere

•• Stored in underground Stored in underground reservoirs, converted reservoirs, converted to solid materialto solid material

Developing Infrastructure for Developing Infrastructure for Wide Scale DeploymentWide Scale Deployment

•• Characterization PhaseCharacterization Phase–– 2003 2003 -- 20052005–– $16 M DOE funds$16 M DOE funds

•• Validation PhaseValidation Phase–– 20052005--20092009–– 7 partnerships in 41 states7 partnerships in 41 states–– 25 geologic field validation tests $100 M DOE funds25 geologic field validation tests $100 M DOE funds

•• Deployment PhaseDeployment Phase–– 2008 2008 -- 20172017–– Several large injection test in different locationsSeveral large injection test in different locations

NETL, Office of Fossil EnergyNETL, Office of Fossil Energy

Carbon Sequestration in the U.S.Carbon Sequestration in the U.S.

Oil BearingOil Bearing Gas BearingGas BearingSaline FormationSaline Formation Coal seamCoal seam

NETL, Office of Fossil EnergyNETL, Office of Fossil Energy

The Southern Coals ConferenceThe Southern Coals Conference

•• Needs to recognize the importance of carbon solutions to Needs to recognize the importance of carbon solutions to have a healthy coal businesshave a healthy coal business

•• The Southern coal region must work as partners and The Southern coal region must work as partners and promoters of common solutionspromoters of common solutions

•• It is our belief that the two primary carbon solutions for It is our belief that the two primary carbon solutions for projects in the region are:projects in the region are:

–– Devonian ShaleDevonian Shale

–– Pipeline SolutionsPipeline Solutions

In One In One Small Small Portion Of Portion Of Kentucky Kentucky They They Estimate Estimate Significant Significant PotentialPotential

Kentucky Leading The Way Toward a Kentucky Leading The Way Toward a Regional OpportunityRegional Opportunity

Extensions and Existing CO2 Pipelines in Relation to Gasification Projects & CO2

EOR Sinks

Gasification Projects

Existing CO2 Pipelines

Extension of Existing CO2

Pipelines

Oil & Gas Fields

Extensions and Existing CO2 Pipelines in Relation to Gasification Projects & CO2

ECBM Sinks



Extension of Existing CO2 Pipelines

Coal Basins

Extensions and Existing CO2 Pipelines in Relation to Gasification Projects

& Basalt / Shale CO2 Sinks




Basalt & ShaleFormations

Extensions and Existing CO2 Pipelines in Relation to Gasification Projects

& Saline Aquifer CO2 Sinks




Saline Basins

Conclusions

• The Coal Industry needs to recognize the need to work on carbon solutions together for a healthy industry

• The regional opportunities are Pipeline and Devonian Shale• The States and Federal Government must be part of the solution

(Tax Credits & Regulatory Framework) • Coal is one of the nation’s long term energy solution!

RSFC Plant Layout Super Imposed on RSFC Plant Layout Super Imposed on Aerial of IP SiteAerial of IP Site

From the River with New Barge DockFrom the River with New Barge Dock

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CO2 Solutions For A Carbon Constrained World