Gasification: The Enabling Technology Western Regional Air Partnership Meeting Salt Lake City, Utah April 5, 2006 James Childress Executive Director Gasification

Gasification:Gasification:The Enabling TechnologyThe Enabling Technology

Western Regional Air Partnership MeetingWestern Regional Air Partnership Meeting

Salt Lake City, UtahSalt Lake City, Utah

April 5, 2006April 5, 2006

James ChildressJames ChildressExecutive DirectorExecutive Director

Gasification Technologies CouncilGasification Technologies Council

www.gasification.orgwww.gasification.org

GTC MissionGTC MissionPromote greater use of gasification Promote greater use of gasification technologies in environmentally superior technologies in environmentally superior manner.manner.

Priority ActivitiesPriority Activities IndustryIndustry – customer education (national – customer education (national conference and participation in other events)conference and participation in other events)

GovernmentGovernment education with focus on state level education with focus on state level officials – legislative, executive (PUC/PSC, officials – legislative, executive (PUC/PSC, DNR/DEQ, Economic Development)DNR/DEQ, Economic Development)


GTC MembersGTC MembersAir Liquide America*Air Liquide America*Air Products and Chemicals, Inc.*Air Products and Chemicals, Inc.*Allied Syngas Corporation*Allied Syngas Corporation*American Electric Power*American Electric Power*Aramco Services Company*Aramco Services Company*The Babcock & Wilcox CompanyThe Babcock & Wilcox CompanyBechtel Corporation*Bechtel Corporation*Black & Veatch Corporation*Black & Veatch Corporation*BOC Gases*BOC Gases*Burns & McDonnellBurns & McDonnellCalpine Corporation*Calpine Corporation*Cinergy Corporation*Cinergy Corporation*ConocoPhillips*ConocoPhillips*Constellation Energy*Constellation Energy*The Dow Chemical Company*The Dow Chemical Company*Drummond Company, IncDrummond Company, IncEastman Chemical Company*Eastman Chemical Company*Emery Energy CompanyEmery Energy CompanyFluor Corporation*Fluor Corporation*Foster Wheeler Energy International Inc.*Foster Wheeler Energy International Inc.*Gas Technology InstituteGas Technology InstituteGE Energy*GE Energy*Genesis Crude Oil, L.P.Genesis Crude Oil, L.P.Global Energy, Inc.*Global Energy, Inc.*Headwaters Inc.Headwaters Inc.Kellogg, Brown & Root*Kellogg, Brown & Root*Kentucky Center for Applied Energy ResearchKentucky Center for Applied Energy Research

Lake Charles Cogeneration, LLCLake Charles Cogeneration, LLCLinde Process PlantsLinde Process PlantsCH2M HillCH2M HillLurgi AGLurgi AGMitretekMitretekMitsubishi Power Systems, Inc.Mitsubishi Power Systems, Inc.Nexant, Inc.Nexant, Inc.Peabody Energy*Peabody Energy*Porvair PLCPorvair PLCPratt & Whitney Rocketdyne Pratt & Whitney Rocketdyne Propulsion & Power*Propulsion & Power*Praxair, Inc.*Praxair, Inc.*Primary Energy, Inc.Primary Energy, Inc.Sasol TechnologySasol TechnologySempra GenerationSempra GenerationSFA Pacific, Inc.SFA Pacific, Inc.Shell Global Solutions B.V.*Shell Global Solutions B.V.*Siemens Power Generation, Inc.*Siemens Power Generation, Inc.*Snamprogetti S.p.A.Snamprogetti S.p.A.Tennessee Valley Authority* Tennessee Valley Authority* Uhde Corporation of America*Uhde Corporation of America*UOPUOPURS CorporationURS CorporationValvtechnologies, IncValvtechnologies, IncWMPI Pty., LLC*WMPI Pty., LLC*Worley Parsons Group Inc.*Worley Parsons Group Inc.*

*Member of the Board of Directors*Member of the Board of Directors


The MessageThe MessageIGCC cleanest coal-based alternative for power generation, IGCC cleanest coal-based alternative for power generation, reducing natural gas dependency for electricity.reducing natural gas dependency for electricity.

Gasification Gasification alsoalso opens the way for coal to compete with opens the way for coal to compete with natural gas and petroleum to produce value added products.natural gas and petroleum to produce value added products.

ChemicalsChemicalsFertilizersFertilizersFuels (pipeline gas & F-T liquids)Fuels (pipeline gas & F-T liquids)

Implications for: National Security, Fuel Diversity, Implications for: National Security, Fuel Diversity, Geographical Conversion DiversityGeographical Conversion Diversity

Gasification adds value to Nation’s coal reserves and other Gasification adds value to Nation’s coal reserves and other “distressed” fuels/feedstocks.“distressed” fuels/feedstocks.


What is Gasification?What is Gasification?

A Process TechnologyA Process Technology

NotNot Combustion Combustion

Converts Feedstocks to HConverts Feedstocks to H22 & CO (Syngas) & CO (Syngas)

Cleans Gas as Integral Part of ProcessCleans Gas as Integral Part of Process

Syngas Can Be Used to Produce:Syngas Can Be Used to Produce:• PowerPower• ChemicalsChemicals• FuelsFuels


What is Gasification?What is Gasification?

Source: U.S. DOESource: U.S. DOE


World Gasification Survey:Summary Operating Plant Statistics

2004

117117 Operating Plants Operating Plants

385385 Gasifiers Gasifiers

Capacity~Capacity~45,000 45,000 MWthMWth

FeedsFeeds

Coal Coal 49%,49%, Pet. Resid. Pet. Resid. 36%36%

ProductsProducts

Chemicals Chemicals 37%,37%, F-T F-T 36%,36%, Power Power 19%19%

Growth ForecastGrowth Forecast 5% annual5% annual


U.S. Gasification ExperienceU.S. Gasification Experience20 Plants Operating20 Plants Operating

FeedstocksFeedstocks

Coal/Petcoke - 7Coal/Petcoke - 7

Gas - 9Gas - 9

Petroleum - 4Petroleum - 4

ProductsProducts

Chemicals - 14Chemicals - 14

Power - 4Power - 4

Gas - 2Gas - 2


World Gasification Capacity GrowthWorld Gasification Capacity Growth2000-20102000-2010

35,000

45,000

55,000

65,000

75,000

2000 2002 2004 2006 2008 2010

(MW(MWth Equivalent) Equivalent)

Source: 2004 World Gasification SurveySource: 2004 World Gasification Survey


Geographical Distribution of World Geographical Distribution of World Gasification Capacity, 2004Gasification Capacity, 2004

(MW(MWth Equivalent) Equivalent)

Europe +28%

Asia/Aust.22%

Afr/ME34%

C&S America1%

North America15%


Factors Driving Gasification TrendsFactors Driving Gasification Trends

AsiaAsiaFertilizers & Chemicals (China, poss. India)Fertilizers & Chemicals (China, poss. India)Fuels (China)Fuels (China)Japan, Policy Shift Toward IGCC?Japan, Policy Shift Toward IGCC?

EuropeEuropeRefinery Models – Environment Driven Toward Cleaner FuelsRefinery Models – Environment Driven Toward Cleaner Fuels

– Pernis (Hydrogen, Power)Pernis (Hydrogen, Power)– Italian Plants (Power)Italian Plants (Power)– Gdansk Gdansk – NetherlandsNetherlands

Coal+Renewables – Nuon (Netherlands), Sanazarro (Italy)Coal+Renewables – Nuon (Netherlands), Sanazarro (Italy)COCO2 Concerns

North AmericaNorth AmericaNatural Gas & Petroleum Prices Natural Gas & Petroleum Prices U.S. Coal, Power, EnvironmentU.S. Coal, Power, EnvironmentU.S. Petcoke in Refineries (Hydrogen, Power)U.S. Petcoke in Refineries (Hydrogen, Power)SNG SNG Fischer-Tropsch Clean DieselFischer-Tropsch Clean DieselU.S. Public Sector Incentives ($$ + Regulations)U.S. Public Sector Incentives ($$ + Regulations)Canada – Oil Sands, Coal Canada – Oil Sands, Coal


High natural gas & petroleum prices affecting High natural gas & petroleum prices affecting power and manufacturing industriespower and manufacturing industries

Increasing demand for clean electricity from coal Increasing demand for clean electricity from coal w/expectations of COw/expectations of CO2 2 limitslimits

Demand for cleaner, non-petroleum fuels Demand for cleaner, non-petroleum fuels (refinery H(refinery H22, F-T diesel), F-T diesel)

Strong technology providers, alliances & Strong technology providers, alliances & guarantees (ConocoPhillips, GE Energy, Shell guarantees (ConocoPhillips, GE Energy, Shell Global Solutions)Global Solutions)

Federal & state financial incentivesFederal & state financial incentives

U.S. Gasification Drivers


Energy Price Gasification DriversEnergy Price Gasification Drivers

Index of U.S. Energy Prices

0

50

100

150

200

250

300

350

400

450

Q1/98 Q3/98 Q1/99 Q3/99 Q1/00 Q3/00 Q1/01 Q3/01 Q1/02 Q3/02 Q1/03 Q3/03 Q1/04 Q3/04 Q1/05 Q3/05

Nat Gas

Coal

WTI

Source: Eastman Chemical


Criteria Pollutant ComparisonsCriteria Pollutant Comparisons

Source: S. Khan, U.S. EPASource: S. Khan, U.S. EPA

All emissions in lb/MMBtu. IGCC NOx based on 15 ppmvd/15% O2 and with no SCR. AnSO2 removal of 87% reflects a very low coal sulfur content (0.22%).

PollutantPollutantIGCC IGCC BituminousBituminous

Subcritical PC Subcritical PC BituminousBituminous

Subcritical PC Subcritical PC SubbituminousSubbituminous

NOxNOx 0.0490.049 0.060.06 0.060.06

SOSO22 0.043 (99% 0.043 (99% removal)removal) 0.086 (98% removal)0.086 (98% removal) 0.065 (87% removal)0.065 (87% removal)

PM/PMPM/PM1010 0.0070.007 0.0120.012 0.0120.012

VOCVOC 0.00170.0017 0.00240.0024 0.00270.0027

COCO 0.030.03 0.100.10 0.100.10


Parameter*Parameter* PC PlantPC Plant IGCC PlantIGCC Plant% less for % less for IGCCIGCC

Solid waste, Solid waste, bituminous coal, tpdbituminous coal, tpd 1,0901,090 430430 6060

Solid waste, Solid waste, subbituminous. subbituminous. coal, tpdcoal, tpd

480480 280280 4242

Solid waste, lignite, Solid waste, lignite, tpdtpd 2,0802,080 1,6001,600 2323

Plant makeup water, Plant makeup water, gpmgpm 9,3409,340 6,0306,030 3535

Wastewater Wastewater discharge, gpmdischarge, gpm 2,9102,910 1,9601,960 3333

Water Use and Solid Waste ComparisonsWater Use and Solid Waste Comparisons


Note: gasification slag included in solid waste; only recovered sulfur considered non waste.Note: gasification slag included in solid waste; only recovered sulfur considered non waste.


Comparative Cost of Hg RemovalComparative Cost of Hg Removal

$3,412

$37,800

$-

$10,000

$20,000

$30,000

$40,000

IGCC PC

Source: U.S. DOE from industry dataSource: U.S. DOE from industry data

Cost per pound of mercury removedCost per pound of mercury removed


The COThe CO22 Capture Advantage Capture Advantage

Source: U.S. DOESource: U.S. DOE

90% CO90% CO22 Capture Capture


Exhaust or Exhaust or Syngas Syngas

PressurePressure

COCO22

Volumetric Volumetric ConcentrationConcentration

COCO22 Partial Partial

PressurePressure

Natural Gas Natural Gas Combined Combined Cycle ExhaustCycle Exhaust

14.7 psia14.7 psia 4%4% 0.6 psia0.6 psia

Supercritical Supercritical Coal Boiler Coal Boiler ExhaustExhaust

14.7 psia14.7 psia 13%13% 1.9 psia1.9 psia

IGCC SyngasIGCC Syngas 825 psia825 psia 40%40% 330 psia330 psia

CO2 Capture Comparison

Source: EPRI, Ben PhillipsSource: EPRI, Ben Phillips


Cost of COCost of CO22 Capture and Capture and

SequestrationSequestrationParameterParameter IGCC PlantIGCC Plant PC PlantPC Plant

COCO22 capture, % capture, % 9191 9090

Unit output derating, %Unit output derating, %1414 2929

Heat rate increase, %Heat rate increase, %16.516.5 4040

Capital cost increase, %Capital cost increase, %4747 7373

COE increase, %COE increase, %3838 6666



World Capacity for COWorld Capacity for CO22

SequestrationSequestration

Source: Petroleum Technology Research Center, CanadaSource: Petroleum Technology Research Center, Canada


GasificationGasification--PolygenPolygen

Insulates manufacturing sector from Insulates manufacturing sector from natural gas cost & volatility for powernatural gas cost & volatility for power

Lower cost alternative feedstocks for Lower cost alternative feedstocks for fertilizers, chemicalsfertilizers, chemicals

Polygeneration has inherent flexibilityPolygeneration has inherent flexibility

Coal to F-T liquids an option to petroleum Coal to F-T liquids an option to petroleum based fuelsbased fuels

A new market for coal in the U.S.


““Btu Conversion” TechnologiesBtu Conversion” Technologies

““Coal to gas and coal to liquids are Coal to gas and coal to liquids are extremely powerful…The technologies extremely powerful…The technologies are real, they are today’s are real, they are today’s technologies…Not emerging, not new…technologies…Not emerging, not new…Coal gasification to pipeline gas at $5-6 Coal gasification to pipeline gas at $5-6 per mmBtu, diesel at $35-40 per per mmBtu, diesel at $35-40 per barrel…”barrel…”

Greg Boyce, President & CEO Elect, Peabody Energy, September 2, 2005Greg Boyce, President & CEO Elect, Peabody Energy, September 2, 2005


Value-Add Potential Value-Add Potential of Btu Conversion Technologiesof Btu Conversion Technologies

to Peabody Coal Reserves to Peabody Coal Reserves

Source: Peabody EnergySource: Peabody Energy

$288

$700

$1,800

$3,600

Coal Electricity SNG F-T Diesel

Billions of dollars of value of Billions of dollars of value of current Peabody coal current Peabody coal

reserves sold as:reserves sold as:


Significant Federal IncentivesSignificant Federal Incentives

EPACT -- ~$5.4 billion authorized for cost EPACT -- ~$5.4 billion authorized for cost sharing, grants, investment tax creditssharing, grants, investment tax credits

+Loan Guarantees (scoring?)+Loan Guarantees (scoring?)

~ 33 Projects from EPACT incentives?~ 33 Projects from EPACT incentives?

+50 cent/gallon tax credit – F-T diesel +50 cent/gallon tax credit – F-T diesel from coalfrom coal

F-T Off take agreements with DoD?F-T Off take agreements with DoD?


Questions?Questions?

For further information: For further information: http://www.gasification.org

oror

Google “gasification”Google “gasification”

Mark your calendarsMark your calendars

June 28-29 Gasification Workshop for State OfficialsJune 28-29 Gasification Workshop for State Officials

Bismarck, ND, Visit to Dakota Gasification PlantBismarck, ND, Visit to Dakota Gasification Plant

October 1-4October 1-4

2006 Gasification Technologies Conference2006 Gasification Technologies Conference

Washington, DCWashington, DC

Documents

Gasification: The Enabling Technology Western Regional Air Partnership Meeting Salt Lake City, Utah April 5, 2006 James Childress Executive Director Gasification