Craig Conner

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Coal/Biomass to Liquids Facility

• Craig Conner
• Vice President, Finance
• Baard Energy, L.L.C.

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Baard Company Credentials

• Baard Generation LLC
• 20 years experience in the development of power
  plants in the USA Canada
• Three 16 MW wood-fired QF projects, Michigan and
  Pennsylvania
• Windsor Power 110 MW Natural Gas
• South Point AZ 550 MW Natural Gas
• Wyandotte MI 572 MW Natural Gas
• Baard Renewables LLC
• Develops ethanol and biodiesel facilities in
  the USA
• Ravenna, NE 88 million gallons/yr
• Coshocton, OH 55 million gallons/yr
• Baard Clean Fuels LLC
• Fischer Tropsch Project Developer
• Wellsville, Ohio - 52,500 bpd FT project under
  development

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Project Overview

• Description
• Large scale coal to liquids (CBTL) project to be
  developed in the US, on the Ohio River at
  Wellsville, Ohio.
• 52,500 bpd capacity, being developed in three
  17,500 bpd phases, producing diesel/jet fuel and
  naphtha/LPG.
• Technology
• Using Fischer-Tropsch (FT) technology and
  advanced carbon capture and sequestration (CCS)
  techniques, ORCF will utilize coal/biomass
  feedstocks to produce economically competitive
  transportation fuels while sequestering
  approximately 70 of the CO2 produced by the
  process.
• Sponsor/Developer Partners
• John Baardson and the Baard Energy team,
  responsible for developing several successful
  power plant and alternative fuel projects since
  the 1980s.
• European American Equities, Ltd
• Leading engineering and construction partners
  Sinopec, Shell/Uhde, Exxon/Mobil, Syntroleum,
  Aker Solutions.
• Financial and governmental support from Ohio
  state and local authorities.
• AFL/CIO backing.

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Project Status

• Options on land secured.
• Major environmental construction permits
  completed for all phases.
• Commence Discussions with industry-leading
  partners for
• FEED (front end engineering and design)
• EPC (engineering, procurement and construction)
• Coal/biomass supply being finalized.
• Strong support from
• State and local authorities
• Labor unions
• State of Ohio incentives

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Permitting Status
Permit type Governing authority Date submitted Current Status
Permits Required for Construction Permits Required for Construction Permits Required for Construction Permits Required for Construction
Air Permit (Permit to Install) Ohio EPA 12/19/2007 Final Permit issued November 20, 2008
401/404 Water Quality Permit Ohio EPA/ US Army Corp of Engineers 12/19/2007 Final 401 (State of Ohio) permit received on July 21, 2008 Final 404 Permit (Corps of Engineers) received on November 19, 2008
Endangered species review U.S. Fish and Wildlife Service NA Received concurrence letter on January 17, 2008 stating that local habitat not likely to be impacted
National Pollution discharge elimination system (NPDES) Ohio EPA 12/19/2007 Final permit received August 8, 2008
Permits Required to Install/Operate Permits Required to Install/Operate Permits Required to Install/Operate Permits Required to Install/Operate
Certificate of Public Need Ohio Power Siting Board During FEED work Pertains to Power Plant only Public meeting held in April 2008 Submission deferred until FEED work initiated
NPDES Permit to Install Ohio EPA During FEED work Regulates the control equipment used to comply with the terms and conditions of NPDES permit Pollution control equipment will be designed during FEED
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Assemble an Experienced EPC Team
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Strong Support

• State, local and federal entities strongly
  support project through grants, low cost
  financing options.
• 4 Billion inducement in Air Quality bonds which
  carry exemptions on real and personal property,
  sales, use and franchise taxes.
• CCPA (Columbiana County Port Authority) has
  proposed up to 500mm in tax exempt financing for
  certain infrastructure elements of the project.
• DOE (U.S. Department of Energy) has provided
  grants for CCS (Carbon Capture and
  Sequestration)/EOR (Enhanced Oil Recovery) tests.
• Federal ITC of up to 195mm available under 48B
  of Internal Revenue Code.
• AFL/CIO Building and Construction Trades behind
  the project Strong local and national Trade
  Union support.

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Project Strategy

• Use Domestic Resources to meet USA demand
• The USA is the worlds largest consumer of crude
  oil
• Approximately 70 of US consumption is for
  transportation fuels, principally in the form of
  gasoline and diesel.
• The USA has the largest coal reserves in the
  world.
• Biomass is available in sufficient quantities
• Capitalize on expected oil price escalation and
  increased demand
• Developing country demand has driven the price of
  crude oil to new highs (137/bbl in July 2008,
  before the economic slowdown).
• Crude oil prices in 2009 have again begun to
  rise, (79.00/bbl)

• Leverage existing CTL technology to produce
  competitive products
• Use proven FT technology
• Use advanced CCS techniques,
• Use coal and biomass to meet expected demand
• ORCF is expected to be a low emission source of
  transportation fuels.

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USA Has Abundant Resources Crude Oil Equivalent
(COE)
Domestic Reserves total 1.9 Trillion Barrels COE
(crude oil equivalent) Less than 0.7 trillion
barrels remain in the Middle East
1 trillion barrels (shale) 800 billion
barrels of FT (coal) 0.15 billion barrels (pet
coke) 22.7 billion barrels oil reserves
gt32 billion barrels of oil (EOR)
Shale Deposits
Coal Deposits
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Ohio River Clean Fuels Location
Ohio River location within reach of significant
reserves of Ohio coals and alternative
feedstock. Existing River terminal for barge
loading/unloading (liquid/bulk). Strategically
located on existing rail with access to dense
manufacturing markets. Centrally located in five
of the six major USA population markets.
Phase I diesel volumes are less than 10 of
local demand. Petroleum Natural gas pipeline
near property. International maritime access
through Gulf of Mexico via Ohio/Mississippi/Tombig
bee systems. Neighboring business synergies.
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Processes
Ancillaries
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Feedstock Supply

• Coal
• ORCF can use inexpensive high sulfur coal that
  has a limited market among traditional utilities.
  
• ORCF expects to
• secure long term reserves and use contract miners
  for extraction (and/ or)
• sign a long-term supply contracts with sources to
  provide Illinois and Ohio coal on favorable terms.

• Biomass
• ORCF process can use up to 30 of biomass -
  logging debris or other non-food harvested
  biomass, as feedstock, depending on economics.
  (nominal use 20)
• ORCF commissioned Fountain Forestry to evaluate
  the availability of wood feedstocks sufficient
  wood supply to satisfy ORCFs needs, but that
  infrastructure to do so was lacking. Required
  infrastructure is nominal and technology is
  available wood chippers and trucks.

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Combining Coal and Biomass Produces a Clean,
Superior Alternative Fuel

• Pure biomass conversion is very costly
• CBTL is a platform that leverages greater use of
  Biomass
• CBTL will greatly reduce overall GHG emissions
  than using biomass alone
• Gasification of biomass greatly improves the
  thermal efficiency of BTL in CFB
• CBTL Diesel and Jet Fuels are superior to other
  forms of alternative fuels (Biodiesel or Ethanol)

DOE/NETL report-2009/1349, January 14,
2009 Affordable, Low-Carbon Diesel Fuel from
Domestic Coal and Biomass Thomas J. Tarka, P.E.
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Biomass Gasification is a Simple Cellulosic
Process
Petroleum Reference Gasoline 115,000
Btu/gallonDiesel 130,500 Btu/gallon
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Project Parameters 20 wt- Biomass Basis
Inputs Optimized for FT Diesel Single Train Fully Developed - Permitted -
Gasifiers 2 6
FT Reactors 1 3
Gasifier Capacity short tons/day 3,969 3,969
Total Dry Feed Rate Short tons/day 7,937 23,811
Efficiency HHV 45.8 45.8
Mature Ops Availability 86.4 86.4
Outputs
Total Liquids, bbl/day 17,730 53,190
FT Diesel bbl/day 11,601 34,803
FT Naphtha bbl/day 6,129 18,387
Power Gen Gross MW 261 950
Power Gen Net MW 57 160
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Block Flow Diagram for Ohio River Clean
FuelsCarbon Capture Focus Rectisol (steam
stripping) and Oxygen-enriched Burners
Novel carbon-management design greatly
enhance Life-cycle CO2 emissions compared to
petroleum-based fuels
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GHG Emissions Calculations - Emission
SourcesWell to Wheel

• Resource extraction and production
• CO2 adsorption credit for biomass re-growth
• Resource and product transportation emissions
• Conversion and refining
• CO2 sequestration credit
• End use combustion
• Potential credit for clean power production

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ORCF Target Design Parameters Reduced Greenhouse
Emissions and Criteria Pollutants

• Design criteria included optimization of carbon
  capture
• Cobalt versus Iron Catalysts
• Rectisol steam stripping
• CO2 capture with oxy-combustion
• Plant siting near biomass, coal and depleted oil
  reserves

• FT Fuels have cleaner tail pipe emissions,
• Products readily absorbed by neighboring
  infrastructure and markets
• Jet, Diesel, Naphtha
• CBTL plant emissions are vastly superior to
  traditional coal practices

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Carbon Management Strategy

• ORCF will proactively manage the CO2 emissions
  from the facility in order to minimize risk from
  future carbon legislation and capitalize on
  incremental revenue opportunities
• Approximately 10,700 tons of CO2 per day captured
  from first phase
• Options being evaluated include
• Sale of CO2 for enhanced oil recovery (EOR) at
  nearby oil fields
• CO2 sequestration in saline aquifers
• EOR field trial at Eastern Ohio
• Ohio Geological survey estimates over 1.1 billion
  barrels of oil remaining
• Single well CO2 injection test (Huff Puff)
  completed in August 2008, with highly promising
  results (58 increase in production rate over
  baseline - no CO2 escape detected)
• Next phase is multiple well pattern injection
  test to be funded by ORCF during FEED work
  federal matching funds for this phase potentially
  available

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Baard Energy EOR Field WorkEast Canton Oil
Field, Stark County, Ohio (ECOF)

• ECOF in serious decline cumulative production at
  about 7 of estimated reserves
• One billion barrels will likely remain when
  operations cease under conventional production
• Single-well injection test conducted August 2008
• Primary goals were to assess
• Geological acceptance of CO2 in ECOF matrix
• CO2 injection rate
• Migration of CO2 relative to the wellbore
• Effectiveness of the CO2 in mobilizing residual
  oil

40 miles
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Pending Activities

• Refresh Phase 1 FEED Engineering
• Review pricing and construction estimates
• Issue RFP to Sinopec for FEED
• Commence FEED engineering
• Establish final design basis
• Secure technology licenses
• Concurrent Owner Development Work
• Complete Project Labor Agreement (National
  Construction Agreement)
• Secure remaining land options.
• Execute EPC contracts.
• Complete CO2/EOR pattern injection test.
• Finalize feedstock supply, and product off-take
  agreements/hedges.

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Questions and Discussion