Cleaner Coal Technologies

1
Cleaner Coal Technologies Theo L.K.
Lee Hydrocarbon Technologies, Inc. (A Wholly
Owned Subsidy of Headwaters Corporation) June
10, 2003 Woodrow Wilson International Center
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Headwaters Corporation

• Utah based alternate fuels company
• NASDAQ symbol HDWR
• 28 million shares _at_ 19.50/share
• Subsidies
• Covol Fuel alternate fuels
• ISG bottom and fly ash
• Headwaters Technology Innovation Group
• Hydrocarbon Technologies, Inc. energy
• Headwaters NanoKinetix nano-catalysis

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R D Directions

• Improving chemical synthesis/reactions via
  nano-catalysis
• Developing cost effect technologies for
  processing low grade feedstocks, for example
• coal
• Petroleum residuum (bottom of the barrel)

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Nano-catalysis

• Nano-dispersion and atomic alignment techniques
• Significant saving in precious metals usage
• Breakthrough applications
• Much simplified and energy efficient process
• Examples
• Highly selective catalyst for direct synthesis of
  H2O2
• Efficient stable catalysts for fuel cells
  (DMFC), catalytic converters, etc..

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Crystal Phase Controlled Catalyst

• Nano-scale deposition technology
• Aligning, spacing and adhering precious metal
  atoms on support materials.
• Controlled spacing between lines of Pd atoms to
  consistently expose the preferred crystal face
  (110).
• Nearly 100 selectivity for H2O2 no byproduct
  (H2O)
• H/O 1/1 3/1 4/1

6
Alignment of Pd Particles

• Princeton University Materials Institute high
  resolution transmission electron microscope
  image.
• Illustrates highly organized and efficient
  structure of HTI nano-catalyst.
• Parallel lines are rows of palladium atoms on
  support material.
• Verifies consistent exposure of (110) crystal
  face and spacing between lines
• of atoms necessary to achieve 100
  selectivity for H2O2.

3 nm
7
World Proved Recoverable Coal Reserves World
Energy Council (Jan 2001) million short tons
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Coal to Liquids

• Direct Coal Liquefaction (DCL) products
• Higher diesel to gasoline ratio than petroleum
  derived
• Use existing refining techniques
• Meet all current projected specifications for
  sulfur and aromatics required
• Indirect Coal Liquefaction (IDCL) products
• Less energy efficient
• Ultra clean diesels with no sulfur or nitrogen
• No aromatic high cetane number ( over 75)
• Integrated DCL and IDCL plant

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Direct Coal Liquefaction

• A clean coal technology
• US DOE funded development between mid-70s late
  90s.
• Japanese DCL program completed in late 90s
• Significant technology improvements and cost
  reduction
• China is constructing a pioneer commercial plant
  in Inner Mongolia utilizing HTIs COAL PROCESS
• Feasibility study for an India client
• Other potential sites under consideration
• Indonesia, Yunnan Shaanxi (China), Australia,
  etc..

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The Shenhua Project (Inner Mongolia)

• China imported 500 million barrels of crude oils
  in 2001.
• Energy security and self sufficiency
• Huge coal resources Shenhua coalfield (236
  billion metric tons proven reserves)
• Estimated 10 plants to be constructed in the next
  20 years in China
• Shenhuas Pioneer Plant
• Direct Coal Liquefaction technology
• 60,000 BPD or 20 million BPY (15,000 TPD or 4.5
  million tons/y)
• Investment cost US2.0 to 2.2 billion
• ROI of 12 to 15
• 1st Q 2006 Startup

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Concluding Remarks

• U.S. recoverable coal reserve is 273 billion
  short tons
• 90 billion tons minable by surface mining
• Coal conversion technologies are matured for
  commercial consideration
• Coal liquefaction technologies produce clean
  fuels
• Low or no S, N, aromatics no ash
• Carbon dioxide can be effectively recovered at
  the coal conversion facilities
• Lesser reliance on foreign oils and addressing
  energy security issue.