James Childress Executive Director Gasification Technologies Council

1. The Basics of GasificationAPPA Utility Education CourseNew Generation Emerging Technologies & Financing2005 APPA Winter Education InstituteFebruary 17, 2005 San Antonio, Texas James Childress Executive Director Gasification Technologies Council

2. AFC Coal Properties Air Liquide America* Air Products and Chemicals, Inc.* American Electric Power* Aramco Services Company* Bechtel Corporation* Black & Veatch Corporation* BOC Gases* Boeing, Rocketdyne Propulsion & Power* Cinergy Corporation* ConocoPhillips* Constellation Energy* The Dow Chemical Company* Eastman Chemical Company* Ebara Corporation Emery Energy Company Fluor Corporation* Foster Wheeler Energy International Inc.* Gas Technology Institute GE Energy* Global Energy, Inc.* Kentucky Center for Applied Energy Research Lake Charles Cogeneration, LLC Linde Process Plants Lockwood Greene E&C / CH2M Hill Lurgi Oel Gas Chemie GmbH Mitretek Nexant, Inc. Parsons Energy & Chemicals Group Inc.* Porvair PLC Praxair, Inc.* Sasol Technology Sempra Generation Shell Global Solutions B.V.* Siemens Westinghouse Power Corporation* Snamprogetti S.p.A. Tennessee Valley Authority* Uhde Corporation of America* UOP * Denotes member of Board of Directors GTC Members Gasification Technologies Council

3. Overview • What is gasification? • Gasification is not combustion! • Environmental performance: gasification vs. combustion • State of the gasification industry • Factors driving gasification trends • Is Gasification Ready for Prime Time? Gasification Technologies Council

4. Gasification is a process technology • Gasification is not combustion, it operates in a controlled, oxygen-starved (reducing) atmosphere that avoids creation of undesirable combustion byproducts. • Modern “Slagging Gasification” is the key • The high temperature & pressure in the slagging gasifier convert carbon in feedstock to synthesis gas, primarily a mixture of CO and H2. • The clean syngas can be combusted to generate electricity or used as a feedstock for production of chemicals, fuels and fertilizers. Gasification Technologies Council

5. Environmental Benefits • The slagging gasification process allows the use of lower cost, “distressed” feedstocks which would be problemmatic if combusted. (high sulfur coal, petcoke, petroleum residuals, secondary materials) • Sulfur in feedstock is converted to H2S which is conveted to elemental sulfur or sulfuric acid using commercially available processes. • No NOx in syngas. IGCC NOx production relatively low compared to other coal-using processes . • Particulate emissions below standards. • Organics are undetected, or below limits. • Ash and other inert materials captured in slag. • >95% mercury capture commercially proven. Gasification Technologies Council

6. Environmental Benefits, cont. • Synthesis gas is cleaned prior to combustion. In PC plant, cleanup is post-combustion. • Δ in gas volume: PC plant cleans up 100-160X the gas volume as an IGCC plant. • CO2 Capture with IGCC is least cost option. Gasification Technologies Council

7. Gasification Technologies Council

8. Comparative Air Emissions [1] 3 ppmvd @ 15% Oxygen [2] Range covers recently issued air permits for SCPC, PC, and CFB projects [3] Based on 1 gr H2S / 100 scf NG spec Source: ConocoPhillips, 2004 GTC Gasification Technologies Council

9. The Gasification Industry2004 World Gasification Survey • Summary Findings • Geographical Distribution • Feedstock Distribution • Product Distribution Gasification Technologies Council

10. 2001 127 operating plants 400 gasifiers Capacity~41,829 MWth Feeds Coal 45%, Pet. Resid. 38% Products Chemicals 43%, F-T 29%, Power 20% Growth Forecast 7% World Gasification SurveyOperating Plant Statistics 2001 vs. 2004 2004 118 Operating Plants 385 Gasifiers Capacity~45,000 MWth Feeds Coal 49%, Pet. Resid. 36% Products Chemicals 37%, F-T 36%, Power 19% Growth Forecast 5% Gasification Technologies Council

11. World Gasification Capacity Growth2000-2010 (MWth Equivalent) Source: 2004 World Gasification Survey Gasification Technologies Council

12. Geographical Distribution of World Gasification Capacity(MWth Equivalent) Gasification Technologies Council

13. Feedstock Distribution of World Gasification Capacity(MWth Equivalent) China (US) Europe Canada MidEast US Gasification Technologies Council

14. Product Distribution of World Gasification Capacity(MWth Equivalent) Gasification Technologies Council

15. Factors Driving Gasification Trends • Asia • Fertilizers & Chemicals (China, poss. India) • Power (China/Japan future) • Fuels (Longer term) • Wild Card – China, Environmental Issues & Econ. Growth; Japan, Policy Shift Toward IGCC? • Europe • Refinery Models – Environment Driven Toward Cleaner Fuels • Pernis (Hydrogen, Power) • Italian Plants (Power) • CO2 Concerns • Remote Gas • F-T Liquids • North America • Natural Gas Demand in Power Sector > NG Prices↑ • U.S. Coal, Power, Environment (The AEP Model) • U.S. Petcoke in Refineries (Hydrogen, Power) • U.S. Possible Public Sector Incentives ($$ + Regulations) • Canada – Tar Sands, Coal Gasification Technologies Council

16. Feedstocks Coal/Petcoke - 7 Gas - 9 Petroleum - 4 Products Chemicals - 14 Power - 4 Gas - 2 U.S. Gasification Experience20 Plants Operating Gasification Technologies Council

17. U.S. Gasification Plants Gasification Technologies Council

18. Technology Performance: Commercially Viable Gasification Technologies Council

19. Summary of IGCC Status IGCC offers SO2, NOx, and particulate emissions below recent pulverized coal plants’ permit limits.Mercury removal >95% at 1/10th the cost for PC plant.CO2 capture costs 43% of PC plant (COE basis). ConocoPhillips, GE, and Shell gasifiers have been successfully operated at commercial size on a variety of feedstocks to produce power, fuels & chemicals. Existing single train IGCC coal plants have achieved availability of 85% on a quarterly basis. Commercial multi-train plants with spare gasifiers will achieve >90% availability. IGCC is currently being commercially used in many plants worldwide based on the gasification of petroleum residuals providing power, steam and hydrogen to refineries. These plants provide additional operating experience on key components and unit operations. Source: Holt, et. al. Gasification Technologies Council

20. But is IGCC ready for prime time? Gasification Technologies Council

21. AEP, Cinergy announce plans to build commercial scale coal-IGCC plants (~600-1,000 mWe each) • Feasibility studies underway • AEP Prelim site selection (OH, KY WV) • St. Legislature/PUC discussions underway • Drivers: • Expectations of more stringent criteria+Hg limits • Expectations of CO2 limits • Desire to keep coal in their energy mix References: http://www.aep.com/environmental/default.htm http://www.cinergy.com/sustain/environmental_improvement.asp Gasification Technologies Council

22. “As part of its future plans to mitigate the economic impacts of its emissions, AEP has committed to accelerating IGCC deployment by building one, or more, commercial-scale, base-load IGCC plants (up to 1,000 megawatts) as soon as 2010.” AEP Press Release, 8/31/04 Gasification Technologies Council

23. 2005 Gasification Technologies Conference San Francisco, October 9-12 Gasification Technologies Council

24. Questions? For further information: http://www.gasification.org Gasification Technologies Council