"Clean Oil" Project: The Nebraska Solution

1
Clean Oil ProjectThe Nebraska Solution

• carbon footprint Reduction of Canadas Bitumen to
  the same Level as Conventional OIl
• How the State of Nebraska can play a Strategic
  Role

Pre-symposium Briefing February 15,
2012 University of Nebraska
Deo C. Reloj, Jr. BioSyn Resources, LLC
2
Prefatory Statements Thesis

• Environmentalists have compelling arguments
  against the construction of a transcontinental
  pipeline to move Canadas Bitumen to US Gulf
  Coast refineries
• Canadas Bitumen, referred to as the dirtiest
  oil in the world, will only feed on Americas
  addiction to oil.
• It will pose an unacceptably high level of
  environmental risks.
• The impasse between the proponents and opponents
  of bringing Canadas Bitumen to the US market can
  be resolved.
• Convert the dirtiest oil to the same quality
  level as conventional oil.
• Create an alternative transportation system
• that offers the same or near the same level of
  transportation cost as what pipelines offer
• that will significantly minimize environmental
  risks and
• eliminate vulnerabilities to terrorist threats.
• The ideal place to do the conversion is the State
  of Nebraska.

3
(No Transcript)
4
Agenda

• Objectives
• Background Information
• Project Description
• Conclusions
• Next Steps
• Open Forum

5
Objectives
6
1. Objectives

• To update and brief
• BioSyn staff and service support companies
• stakeholders and potential stakeholders
• supporters of BioSyn and
• interested policy makers of the status of the
  integrated biorefinery project.

7
2. Objectives

• To prepare for a symposium on pipeline
  alternative for shipping Canadian Bitumen to the
  USGC.
• Introduce and present the 4th phase of the BioSyn
  project as a viable alternative to the Keystone
  XL Pipeline project that will
• satisfy the major concerns of both the proponents
  and opponents of the said pipeline project.

8
3. Objectives

• To showcase BioSyns technical capabilities in
  formulating solution pathways to complex problems
  associated with large-scale environmentally
  sensitive petroleum projects.

9
Background Information
10
1. Relevant Developments

• Politics
• Discontinuation of funding of the Biorefinery
  Assistance Program
• Government
• MOU between DOE, DA and US Navy
• Results
• Formulation development of multi-functional
  military fuel
• Opening of door to negotiating with US Air Force
  for the supply of samples for lab testing, ground
  testing flight testing and certification
• First export shipment
• Oil Industry
• Government rejection of the Keystone XL pipeline

Background Information
11
2. Fourth (4th) Phase of the Refinery

• Bitumen
• Major raw material
• Abundant in Canada and US
• Strategic Plans for Bitumen already figured out
• Transportation
• Safe and cost effective
• Not reliant on pipeline
• Carbon footprint reduction
• Section 526 of EISA 2007

Background Information
12
3. Bitumen

• Referred to as the dirtiest oil in the world
• Generic meaning of dirty oil
• Carbon intensive
• Extraction Post Extraction
• Processing
• Transportation
• Refining
• Consumption
• Very high carbon content

Background Information
13
4. Hydrogen

• The cleanest fuel
• Does not produce carbon on consumption
• Does not exist on earth as free hydrogen
• It has to be produced
• Its production produces carbon (except when using
  nuclear power)

14
5. Conventional Petroleum

• Not as carbon intensive as Bitumen
• Its refined products are acceptable for purchase
  by US federal agencies.
• Section 526, EISA 2007

15
6. Qualitative Comparisons Carbon Foot Print
Conventional Oil
Bitumen
Atomic Hydrogen
Hydrocarbon Fuel
16
7. Major Arguments of Contending Parties

• Proponents

• Opponents

• It helps ensure the countrys energy
  independence.
• It will create jobs and boost the economy.

• It will use the dirtiest oil to feed Americas
  addiction to oil.
• It will expose sensitive environmental resources
  to dangerous spills.

Background Information
17
Project Description
18
Project Components

• Advanced Integrated Refinery Complex
• Advanced hydrogenation technologies
• Methane Reforming low-carbon-intensity
  hydrogen
• Carbon Neutral Electricity carbon neutral
  hydrogen
• Bio-Oil Production carbon negative hydrogen
• Bitumen Transportation Logistics
• Bitumen-On-Rail Program

19
Salient Features of the Project

• It will address both arguments of the contending
  parties.
• It will, if fully implemented, make the State of
  Nebraska a major and strategic player in the oil
  industry.

20
Advanced Hydrogenation Technologies

• Assumes availability of hydrogen that has any of
  the following levels of carbon intensity
• Low carbon
• Carbon neutral
• Carbon negative

Hydrogenation
Bitumen
Hydrogen
Conventional Oil
21
Advanced Hydrogenation Technologies
Advanced Hydrogenation Technologies
Bitumen
Hydrogen
Conventional Oil
22
Advanced Hydrogenation Technologies
Consumer, Commercial, Industrial, Agricultural Pro
ducts
Bitumen
Hydrogen
Petrochemicals
Ultraclean Fuels
23
Hydrogen Sources

• Low carbon hydrogen
• Natural Gas
• Carbon Neutral Hydrogen
• Carbon neutral electricity
• Carbon Negative Hydrogen
• Biocrude Oil

24
Biocrude Oil

• Primary source of carbon negative hydrogen
• Carbon negative fuel for steam production in
  Bitumen extraction
• Produced from pyrolysis of biomass
• Production technology
• Commercially available from reputable process
  licensors
• Comes with process guarantees
• Project financiable
• Insurable

25
Biocrude Oil Production Logistics
26
Bitumen-On-Rail Project

• Pipeline alternative

27
Salient Features

• Cost competitive to pipeline
• No diluent cost penalties
• Locomotive engines will run on natural gas
• Poses no environmental risk to the same level as
  pipelines
• Bitumen spillage is not a serious problem.
• Not as vulnerable to terrorist threats
• Existing infrastructures already in place
• Additional infrastructures require less
  permitting hurdles.

28
The Nebraska Factor
29
What Nebraska Offers

• Easy access to high volume natural gas
• Source of low carbon hydrogen
• Very low electricity rates
• Source of carbon neutral hydrogen
• Strategic proximity to large scale biomass
  production
• Source of carbon negative hydrogen
• Crossroad for railroad transportation

30
Benefits to Nebraska

• Generation of high paying jobs
• Stimulation of local economy
• Generation of taxes
• Creation of petrochemical and downstream
  industries
• Generation/creation of new sector of agricultural
  economy based on production of dedicated energy
  crops on marginal and unproductive lands

31
Conclusions

• The dirtiest oil is converted to low carbon
  footprint oil similar to conventional oil.
• Canadian Bitumens contribution to US energy
  independence is assured.
• Polarizing issues from both proponents and
  opponents of the Keystone XL pipeline are
  addressed.

32
Next Steps
33
Next Steps

• Holding of formal symposium on the same subject
• Secure participation of experts as members of the
  Reaction Panel
• Secure attendance of policy makers from local,
  state and federal government.
• Creation of consortium to implement the
  Bitumen-On-Rail project to move Bitumen to the
  Gulf Coast pending the implementation of the 4th
  phase.

34
Open Forum