The Future of Coal Matt Jahnke February 13, 2006

Thoughts That Come to Mind Negative Perceptions Negative Perceptions Dirty Mines Dirty Mines Old Technology Old Technology CO 2, SO x, NO x, and other Pollutants CO 2, SO x, NO x, and other Pollutants Dangerous Mines Dangerous Mines Smog and Suit Smog and Suit Poor Working Conditions Poor Working Conditions Politics (Relaxing Clean Politics (Relaxing Clean Air Standards) Positive Perceptions Abundant Supply in U.S. Cheap No Foreign Reliance New Clean Technologies American Jobs in Plants, Mines, and Transportation Electricity Politics (R&D for Clean Air Research)

Coal is Here to Stay U.S. Consumes 1.1 Billion Tons of Coal Annually

Types of Coal Anthracite 86-98% Carbon --15,000 BTU/lb Anthracite 86-98% Carbon --15,000 BTU/lb Small segment of Coal Market – Near Pennsylvania Small segment of Coal Market – Near Pennsylvania Bituminous 45-86% Carbon -- 10,500-15,000 BTU/lb Bituminous 45-86% Carbon -- 10,500-15,000 BTU/lb Most U.S. Coal – Electricity – Coke – Industrial Steam Most U.S. Coal – Electricity – Coke – Industrial Steam Sub-bituminous 35-45% Carbon --8,300-13,000 BTU/lb Sub-bituminous 35-45% Carbon --8,300-13,000 BTU/lb Western States and Alaska (PRB) – Lower in Sulfur Western States and Alaska (PRB) – Lower in Sulfur Lignite 25-35% Carbon – 4,000-8,300 BTU/lb Lignite 25-35% Carbon – 4,000-8,300 BTU/lb Young Coal, “Brown Coal” Young Coal, “Brown Coal”

Powder River Basin

Current Pollution from Coal 60% of U.S. Sulfur Dioxide Emissions 60% of U.S. Sulfur Dioxide Emissions 33% of U.S. Mercury Emissions 33% of U.S. Mercury Emissions 33% of U.S. NO x Emissions 33% of U.S. NO x Emissions 33% of U.S. Carbon Dioxide 33% of U.S. Carbon Dioxide Currently further reeducation in admissions is at a stalemate. Currently further reeducation in admissions is at a stalemate. 5 Billion has been spent by the Federal Government for Clean-Coal Technologies 5 Billion has been spent by the Federal Government for Clean-Coal Technologies

Alternatives to Coal AvailabilityEnvironmentalCost CoalAbundantHighLow HydroModerateMinorLow Wind & Solar UnreliableMinorModerate OilScarceModerateHigher Natural Gas ModerateModerate Moderate and Rising NuclearAbundant Minor or Catastrophic Same as Coal

Coal vs. Nuclear Cost Element Nuclear $/MW-hr Coal $/MW-hr Fuel511 O&M and Labor 65 Pensions, Insurance, Taxes 11 Regulatory Fees 10.1 Property Taxes 22 Capital99 Decommissioning & Waste 50 Administrative11 Total

Coal vs. Natural Gas Coal Coal Best Long Term Economic Option Best Long Term Economic Option In reality only 4% of the new large power plants in the last 12 years were coal. In reality only 4% of the new large power plants in the last 12 years were coal. In order to regain public support, new technologies need to be perused. In order to regain public support, new technologies need to be perused. Advanced Pulverized Coal (PC) Advanced Pulverized Coal (PC) Integrated Gasification Combined Cycle (IGCC) Integrated Gasification Combined Cycle (IGCC) FutureGen FutureGen Fluidized Bed Combustion (FBC) Fluidized Bed Combustion (FBC) Natural Gas Has been the best compromise for Energy Companies and Environmentalists in the 1990’s. If continued the next few decades will see, for the first time, the US depend on foreign nations for its fuel used for production of electricity. Capital Investment is about half $500/ kW compared to coal’s $1,000 conventional Coal plant. Less CO 2 due to fewer C-C bonds

FutureGen "Today I am pleased to announce that the United States will sponsor a $1 billion, 10-year demonstration project to create the world's first coal-based, zero-emissions electricity and hydrogen power plant..." President George W. Bush February 27, 2003 "Today I am pleased to announce that the United States will sponsor a $1 billion, 10-year demonstration project to create the world's first coal-based, zero-emissions electricity and hydrogen power plant..." President George W. Bush February 27, 2003

What is FutureGen? Integrated Gasification Combined Cycle (IGCC) Integrated Gasification Combined Cycle (IGCC) Acts as a Chemical Plant rather than a Coal plant. Acts as a Chemical Plant rather than a Coal plant. Removes impurities mainly sulfur prior to combustion – making exhaust much cleaner. Removes impurities mainly sulfur prior to combustion – making exhaust much cleaner. Currently 2 IGCC plants exist in the U.S. Currently 2 IGCC plants exist in the U.S. CO 2 is only slightly reduced do to the higher efficiency in IGCC plants 33% to 38% CO 2 is only slightly reduced do to the higher efficiency in IGCC plants 33% to 38% FutureGen’s Goal is to reach 50% efficiency by attempting to capture all H2 and use it in Fuel Cells FutureGen’s Goal is to reach 50% efficiency by attempting to capture all H2 and use it in Fuel Cells Hopes for Sequestering CO 2 in the ground Hopes for Sequestering CO 2 in the ground

Current IGCC

IGCC – How Low Can We Go

Will it Ever Happen Requires 15% higher capital investment. Requires 15% higher capital investment. R&D and Tax incentives. R&D and Tax incentives. No mandatory requirement. No mandatory requirement. FutureGen is still 8 years away assuming that it stays fully funded. FutureGen is still 8 years away assuming that it stays fully funded. No Private Energy Companies have constructed an IGCC plant. No Private Energy Companies have constructed an IGCC plant.

The Reality U.S. can not agree on its source of energy. U.S. can not agree on its source of energy. Clean Air policies are in limbo. Clean Air policies are in limbo. Future Coal emissions are uncertain. Future Coal emissions are uncertain. Even the oldest coal plants are cheaper to run with a low efficiency than building a newer more efficient one. Even the oldest coal plants are cheaper to run with a low efficiency than building a newer more efficient one. Natural gas is currently the compromise taken. Natural gas is currently the compromise taken. By 2025 the U.S. will need 50% more electricity. By 2025 the U.S. will need 50% more electricity. Will the U.S. suffer an electrical energy crisis? Will the U.S. suffer an electrical energy crisis?

EPA’s Emissions Scorecard 2001; Prairie State Energy air permit, Indeck- Elwood draft air permit, and U.S. Department of Energy 2002 Annual Energy Outlook. EPA’s Emissions Scorecard 2001; Prairie State Energy air permit, Indeck- Elwood draft air permit, and U.S. Department of Energy 2002 Annual Energy Outlook pdf#search='Powder%20River%20Basin' pdf#search='Powder%20River%20Basin' pdf#search='Powder%20River%20Basin pdf#search='Powder%20River%20Basin BF7/bltn0320.pdf#search='pulverized%20coal‘ BF7/bltn0320.pdf#search='pulverized%20coal‘ BF7/bltn0320.pdf#search='pulverized%20coal BF7/bltn0320.pdf#search='pulverized%20coal Chemical and Engineering News, “Coal – Can it ever be clean?” February 23, 2004 Chemical and Engineering News, “Coal – Can it ever be clean?” February 23, rch='subbituminous' rch='subbituminous'