Oct 07

Industrial Gasification and its Environmental Advantages

GTC Workshop on GasificationTampa, FL March 14, 2008

David L. DentonBusiness Development Director

Eastman Gasification Services Company

Oct 07

Chemicals from Wood (1920)

Chemicals from Coal (1983)

A History Based on Use of Domestic Alternative Feedstocks

Oct 07

Syngas from Gasification has Multiple Applications

Syngas

Transportation/ Aviation Fuels

(Civilian & Military)

Building Blocks for Chemical

IndustryClean Electricity

FuelGas

IronReduction

Oct 07

Gasification Can Produce Almost Any Product Made from Oil or NG

Oct 07

What is Industrial Gasification?

Industrial gasification (IG) is the use of gasification to convert advantaged

carbonaceous feedstocks into industrial products such as chemicals, fertilizers,

and hydrogen.

Oct 07

Everyday Products Made from Industrial Gasification

IntermediateIndustrialProducts,such as

Methanol& Acetyls

Coal

It’s likely you have used a product based on industrial coal gasification.

Oct 07

Natural Gas $/MMBTU

WTICrude$/bbl

Crude (West Texas Intermediate) Natural Gas (Houston Ship Channel)

Rising Costs of Conventional Raw MaterialsHave Negatively Impacted U.S. Industry

Steep Run-up Since 2002

Source: Historical Data, constant 2008 dollars

YTD

Oct 07

Conversion Costs(includes energy costs)

Logistics(fuel costs)

Raw Materials Costs(feedstock costs)

High Energy/Feedstock Prices Affect All Elements ofCommodity Industrial Costs

Oct 07

U.S. Industry Quandary

In the face of rapidly rising materials and energy costs, U. S. industries face tough choices. As a result, some industry players have elected to:

• Close shop

• Move out

• Transform

Oct 07

Closing Shop: Ammonia & Methanol Example

Illustration OnlySources: U.S. Geological Survey, Mineral Commodities Summaries, 2007

Chemical Economics Handbook - SRI Consulting, 2007

Ammonia PlantsMethanol Plants

(Since 2003 – Approximately 20 Ammonia and 6 Methanol Plants Closed)

Oct 07

Moving Out: The Exodus

Eastman Announced

Plants

Source:ICIS Chemical Business Announced Chemical Plants > $1 B in Size

Oct 07

Transformation Options

• Utilize Alternative Domestic Materials through Gasification or Other Means: – Coal– Petcoke– Biomass– Secondary Recycled Materials

• Seek Other Transformational Models (e.g., unique IP, breakthrough cost reductions, restructuring, etc.)

Oct 07

Coal & Petcoke vs. Oil & NG Historical Pricing

Source: Historical Data, constant 2008 dollars

Why Industrial Gasification (IG)?

The spread is large and has been growing…

YTD

Oct 07

0%

10%

20%

30%

40%

50%

Coal Crude Oil Natural Gas

U.S.Non-U.S.

% o

f Tot

al W

orld

Res

erve

s U.S. has 250-plus year supply of coal(largest single-nation fossil reserves on earth)

U.S. has more than 25% of the World's Coal Reserves

Source: International Energy Agency and Dept. of Energy Information Adm. (EIA)

Oct 07

Which sectors are likely to experience the greatest growth for gasification in the next ten years?

32%

25%

15%

9%

8%

7%

5%

Chemicals

Electric power

Substitute Natural Gas

Transportation fuels

Oil sands

Fertilizer

Refining (non-oil sands)

Source: Fleishman Hillard Communications

Oct 07

Product Distribution of World Gasification Capacity(MWth Equivalent)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Power Chemicals Liquid Fuel GaseousFuel

NotSpecified

Planned (2010)Operating (2007)

Source: GTC World Gasification Survey

Oct 07

+

Air

Oxygen(95-99%)

N2

Carbon Source(e.g., coal) + Water

Rod Mill

Industrial Gasification BasicsGasifier Section:•Controlled chemical reaction•High temperature•High pressure preferred•Short residence time

Quench Gasifiers Preferred:•Gas and molten ash quenched in circulating water bath•Ash/slag discharged out bottom as inert, glassy frit (saleable byproduct)•Quench saturates syngas with water needed later for shift reactionSlag

GasClean-Up

BeforeProduct

Use!

AirSeparation

Unit

Products (syngas):•CO •H2

By-products:•H2S •CO2

•Ash (slag)•Steam

can adjustCO/H2 ratio Gasifier

(quenchtype)

Oxygen Preferred to Air

Oct 07

Shift Reactor -Adjusts H2/CO to Desired Ratio

Raw Syngas

ShiftedSyngas

CO + H2O H2 + CO2

ExothermicShift Reaction

Eastman Confidential Information

Oct 07

IG Environmental Advantages

• IG processes typically have higher overall thermal efficiencies than power applications (50-70% versus 35-40% for IGCC or PC).

• Requirements of downstream conversion steps (catalysts, etc.) inherently require lower levels of contaminants such as sulfur and mercury (often by an order of magnitude) than environmental requirements for power applications.

Oct 07

IG Environmental Advantages

• IG processes are inherently designed to capture carbon:– Quench-type gasifiers are preferred for both IG and CCS – Shift reactors are included in the process design– Much of feedstock carbon is ultimately sequestered, i.e.

used, in the manufacture of non-fuel products– Any CO2 that is formed by the process must be captured

and removed prior to downstream conversion steps (unless some of the CO2 is needed for the ultimate conversion step, e.g. methanol or urea)

– IG processes typically operate at higher pressure and are not diluted by N2, enhancing overall capture efficiency

• Cost of carbon capture is inherently built into the final product(s) cost, i.e. not an add-on cost to the process.

Oct 07

Major Technology Options:

• MDEA (methyldiethanolamine) – Chemical absorption, 98% to 99+% S removal, large CO2 slip, moderate operating temperature, lowest capital cost, often inadequate for chemical production from syngas

• Selexol tm (UOP) – Physical absorption, 99+% S removal, variable CO2 slip, higher cost than MDEA

• Rectisol tm (Lurgi/Linde) - Physical absorption, 99.5% to 99.9+% S removal, complete CO2 removal possible, similar total cost to Selexol tm, coldest operating temp.

• Warm Syngas Cleanup - New technologies (e.g., RTI/Eastman) being developed that operate at high temperatures (> 600 F) and at ppm sulfur levels

The H2S recovered from these technologies is further converted to either elemental sulfur (e.g., Claus/SCOT) or sulfuric acid."Dirty Syngas"

CO,H2,CO2,H2S

Clean Solvent

Dirty Solvent

"Clean Syngas"CO, H2

AGR Technologies Provide Deep Sulfur Removal(AGR = Acid Gas Removal)

Oct 0716th and 17th July 2007 22

Rectisol Contaminant Removal

• 10,000+ ppmv S inlet concentration can be reduced to < 0.1 ppmv S (as H2S) outlet concentration (up to 99.99% sulfur removal)

• 10+ vol.% CO2 inlet concentration can be reduced to < 5 ppmv outlet concentration, but can also be controlled to a specific vol.% CO2outlet concentration for feed to methanol or urea plants.

• Removes both H2S and COS; COS removal is a bit less efficient than H2S removal, but inlet COS concentration is also much lower.

Oct 0716th and 17th July 2007 23

Rectisol Performance

Representative 3-month Plot of Outlet Sulfur Concentration (H2S)(Inlet Sulfur Concentration ~ 8,000 – 10,000 ppmv)

Oct 07

Vapor-PhaseMercury Removal

Hg Removal Demonstrated for Almost 25 Years

Essentially complete mercury removal (> 95%)

via activated carbon beds; enabled by high pressure

operation

Eastman Confidential Information

Oct 07

CO2

Products:ChemicalsFertilizersHydrogen

Etc.

Syngas Conversion

Gas Cooling

Shift Reactor

MercuryRemoval

ParticulateScrubber

Slag/Frit

CarbonSource

H2O

+

AirSeparation (ASU)

O2

Acid Gas Removale.g., Rectisol

CO/H2

Fines

Industrial Gasification (IG)

QuenchGasifier

LockHopper

Sulfur

> 99.9% DeepSulfur Removal

Non-LeachableHeavy Metal Removal

InherentCO2

Capture

Conversion of Carbon into

Useful Products

CarbonBeds

CO +H2O CO2 + H2Water-Gas Shift Reaction

CleanSyngas

Typically 50-75% Overall Efficiency

Oct 07

Eastman's Coal Gasification Facility – Kingsport, TN

What IG Looks Like

Oct 07

IG is an Environmentally Friendly Choice

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

SCPC (FGD/ESP/SCR) IGCC (MDEA, No SCR) Industrial Gasification (IG)

NOxSO2Particulates

Lb/M

MB

tu

Lower air emissions and water usageLower solid wastesInexpensive mercury removalMuch lower costs for CO2 capture

Gasification Advantages

SCPC and IGCC Source: EPA Report – "Environmental Footprints and Costs of Coal-Based IGCC and PC Technologies", July 2006

Oct 07

Carbon Capture Advantages ofIndustrial Gasification (IG)

PC IGCC CTL IGCO2 Conc. in

Capture Stream 10-13 vol% 15-50 vol% ~30 vol% 15-50 vol%

Pressure of Capture Stream Low (ambient) High (>400 psi) High (~400 psi)

High (up to 1200 psi)

Location of Carbon Capture Post-combustion Pre-combustion Pre-combustion Pre-conversion

Fate of Carbon in Final Products Burned (CO2)

Burned (CO2, unless shifted) Burned (CO2)

Utilized/captured in products

Additional Equipment Required to Capture CO2

Scrubbing of dilute flue gas plus CO2

compressors

Shift reactors plus CO2 scrubber and

compressorsOnly CO2

compressorsOnly CO2

compressors

Total Capex Increase to Capture

CO21 20-25% 10-15% 5% 5%

Efficiency Reduction for CO2

Capture1 20-25% 12-13% ~5% ~5%

Cost of CO2Avoided2 $40/ton $20/ton $10/ton $8-10/ton

1 Bechtel, Pitt. Coal Conf., 2007 2 MIT – The Future of Coal, 2007

Oct 07

$40

$20

$10 $8-10

$0$5

$10$15$20$25$30$35$40$45$50

PulverizedCoal

IGCC Coal toLiquid

IndustrialGasification

Source: MIT’s The Future of Coal, 2007Note: Does not include pipeline transportation and injection costs

IG is Lowest Cost Route to Implement CCS from Coal

Carbon Capture and Compression Costs(per metric ton of CO2)

Oct 07

Benefits of IG if Successful

• Establishment of a new paradigm that enables retention and growth of U.S. industry and jobs.

• Demonstration of ultra clean-up of syngas.• A model for producing hydrogen on a large scale.• A leading edge model for advanced clean coal power

generation - using gasification to produce hydrogen, coupled with carbon capture and storage.

• A model for "green" refineries – using secondary materials to produce clean products with minimal carbon footprint.

• World-scale demonstration of carbon capture and storage at the lowest incremental added cost.

• Significant reduction of energy imports, thus enhancing energy security, without significant negative impacts on the environment.

Oct 07

IG: A Key to Our Future?

We Believe So.

Oct 07

Thank You for Your Attention!

Questions?