Marty W. Irwin, Director Indiana Center for Coal Technology Research

1. Indiana Center for Coal Technology ResearchLocated in the Energy Center at Discovery Park, Purdue University COALThe Essential FuelAdvances in Clean Coal and Control of CO2 December 9, 2008 ISMR PresentationJasper, Indiana Marty W. Irwin, Director Indiana Center for Coal Technology Research

2. Are we using to much Energy? Population Energy GDP Energy/GDP 1000Btu/$ USA 6% 25% 33% .758 ROW 94% 75% 67% 1.12 Do the Math US population consumes 5.26 times the energy of the average person in the rest of the World; But we produce 7.7 times the goods and services of the Rest Of the World. The USA only 67% of the energy per unit of GDP as does the rest of the world. We are the model of energy efficiency, (only Japan and Lichtenstein are better). Per capita energy is of no value to measure, to reduce your per capita consumption you need only add population. It is what you do with the energy that matters. 33% of the world has never used a telephone: 40% of China population have no electricity or indoor plumbing: 50% of the population of the world is on a subsistence economy: How do you compare the energy us of a Bushman in the Kalahari trying to feed his family with a Hoosier farmer who uses his 255 acres to feeds 150 people? Its not how much you use, its what you do with it.

3. Indiana Primary Energy ConsumptionSource & Sector, 2006 Source % Sector % ELECTRIC POWER 1,237.4 INDUST 524.9 RES 349.0 COMM 247.2 TRANS 0.2 EXPORT 116.1 COAL 1,547.5 52.6% 76.9% 96.2% 0.4% 22.6% . Trillion Btu’s Trillion Btu’s 0.4% 2.9% 0.5% 0.0% PETROLEUM 890.7 29.7% 0.6% 42.6% 22.9% INDUSTRIAL 1346.3 46.7% 24.8% Energy for electricity in each sector is included 29.8% 4.2% 72.2% 2.8% 7.1% NATURAL GAS 512.1 17.1% 47.8% 2.5% 44.1% RESIDENTIAL & COMMERCIAL 532.3 + 353.1 = 885.4 30.7% 13.1% 1.0% 78.1% 6.3% 40.2% 9.3% 97.6% 31.8% RENEWABLES 46.3 1.5% 0.0% TRANSPORTATION 648.7 22.5% 18.6% 0.8% 1.6% Net inter-state flow of electricity/losses = -116.1 Total = 2.88 Quads (1015 Btu) 75% of energy imported http://www.eia.doe.gov/emeu/states/state.html?q_state_a=in&q_state=INDIANA http://www.eia.doe.gov/emeu/states/sep_use/total/pdf/use_in.pdf

4. How Important is Manufacturing to Indiana?Manufacturing as % of Indiana’s GDP 1997 GDP2006 GDP Durable Goods 18.1% 20.5% Non-Durable Goods 10.2% 10.0% Total Manufacturing 28.3% 30.5% • In 1997 Indiana’s 18.1% durable goods as part of GDP was the highest in the nation. (2006 Indiana ranked 3rd). • 2006 Total Manufacturing of 30.5% is highest in the nation. • Your CO2 Footprint is large if you live in Indiana because we are a Manufacturing State: CO2 and Energy use measurements do not account for where the final product is consumed, only where it is produced. Indiana is amanufacturing state Indiana’s industrial sector provides about 1/3 of the state GDP & consumes nearly 1/2 of total energy Source: Indiana Business Review, Spring 2008

5. Who uses coal in Indiana?When you use Electricity you use Coal. • When you allocate the coal used to make electricity to the electricity user: Coal consumed in Indiana Sector % of total Million Tons Used • Industrial 55.2% 38.8 • Residential 21.7% 15.3 10 tons /household • Commercial 15.8% 11.1 • Export 7.3% 5.1 • Total 100.0% 70.3 • http://www.eia.doe.gov/emeu/states/state.html?q_state_a=in&q_state=INDIANA

6. Real Cost of Energy

7. Econ: 666Demand Increases as Price Increases • From 1995 to 2006 : • Coal price per MMBTU increased 21.1% Demand increased 14.0% • N G price per MMBTU increased 250.5% Demand increased 26.7% • Petroleum price per gallon 107.5% Demand increased 14.9% • Electricity in Indiana price increased 23.5% Demand increased 21.3%

8. 2006 COAL DESTINATION: INDIANA Coal Destined for Indiana: 72,346 (Thousand short tons) & Methods of Transportation In state: 32,965 Total 30,532 Electricity Generation Rail 17,021 River 30 Conveyer 3,606 Truck 12,308 2,379 Industrial Plants Truck 54 Residential-CommercialTruck Wyoming: 11,927 Total 11,686 Electricity Generation Rail Industrial 240 River Indiana Coal Montana: 2,226 Total 2,226 Electricity Generation Rail Ohio: 195 Total 188 Electricity Generation Rail 73 River 96 Truck 19 7 Industrial Plants Truck Utah: 164 Total 164Industrial Rail Colorado: 153 Total 109 Electricity Gen, Rail, 44Industrial Pennsylvania: 546 Total 475 Electricity Generation Rail 223 River 251 68 Industrial Plants Truck Illinois: 6,450 Total 5,347 Electricity Generation Rail 4,672 River 428 Truck 589 761 Industrial Plants Rail 675 Truck 86 Virginia: 670 Total 670 Coke PlantsRail West Virginia: 7,942 Total 2,111 Electricity Generation Rail 1,114 River 968 Truck 28 4,634 Coke Plants Rail 4,163 River 420, Truck 51 1,197 Industrial Plants Rail 949 River 246 Truck 2 Kentucky: 1,371 Total 882 Electricity Generation Rail 530 River 352 489 Industrial Plants Rail 392 Truck 97 60,582 Power Generation (9,300 from Synfuel) 6,140 Coke Plants 5,932 Industrial Plants Alabama: 946 Total 944Coke Rail Source: http://www.eia.doe.gov/cneaf/coal/page/coaldistrib/coal_distributions.html

9. Why Coal?Because that is what we have in Indiana,and lots of it

10. Coal is the Answer to the emissions problem.Increasing the use of electricity puts the emissions controls at the Utility. You rent pollution control when you buy electricity Unintended consequences of spending Billions on Pollution Control? Nitrogen based fertilizer applications increase 44.4% from 1983 to 2004. NOx emissions fell 44% during same time period. (Correlation Coefficient 99.1) Australian Scientist has proposed putting SOx in the atmosphere to reduce global warming IS GLOBAL WARMING THE RESULT OF INCREASING THE CO2 EMISSIONS OR THE REDUCTION OF SOX?

11. Sun, Temperature, CO2 Correlations or Cause and Affect Source: Arthur B. Bobinson et al,, Journal of American Physicians and Surgeons (2007) 12, 79-90.

12. Climate Sensitivity Reconsidered by Dr. Christopher Monckton Peer reviewed and Published in: Physics and Society, August 2008 • The IPCC’s 2007 climate summary overstated CO2 impact on temperature by 500-2000% • CO2 will add little more than 0.6 degrees F. to global mean temp. by 2100, if at any at all • Not one of the three variables whose product is climate sensitivity can be measured directly • The IPCC’s value for the three keys is taken from 4 published articles not 2,500 • “Global Warming” stopped 10 years ago, and surface temperature have been falling for 7 years • Not one of the computer models used by the IPCC predicted this cooling period • The IPCC inserted a table into the scientists’ draft overstating the effects of the ice-melt by 1000% • It was proved 50 years ago that predicting climate more than 2 weeks ahead is impossible • Mars, Jupiter, Neptune’s largest moon, and Pluto warmed at the same time as Earth • In the past 70 years the Sun was more active than at almost any time in the past 11,400 years

13. A High- Resolution, Interactive Map of U.S. CO2 Emissions and Density from Fossil Fuels 13

15. We must get the Science Right, or We will get the Policy Wrong. Problem: We have a need for lots of energy; we produce stuff used elsewhere. We have a lot of coal; We have real issues with CO2 ; Regardless of whether there is any legitimate environmental basis for the concerns or not. We are shipping out $1 billion a year to buy coal from other states and bring it to Indiana; What would resolve all of the issues? Use Indiana’s own coal in a way that would; 1) Retain energy capital, 2) Create jobs for Hoosiers, 3) Leave the environment cleaner than it is now, 4)Reduce the cost of the goods manufactured in the state (especially steel), 5) Turn CO2 into a desirable resource

17. Economic ResultsOf CO2 Removal and Sequestration With make-up power at 12¢/kWh hCOE by >400% With make-up power at 6.5 ¢/kWh hCOE by >300% Base power plant cost for an existing plant obtained from Energy Velocity ranged from 2 to 3 cents/kWh. 6.5 ¢/kWh assumes make-up power from a new non-capture supercritical PC plant 12.0 ¢/kWhassumes make-up power from a new supercritical PC plant with 90% capture Source: Jared Ciferno, DOE NETL 401/110907

18. What choice do we have? Change the way we produce power and energy

19. Wabash RiverOne of the Cleanest Coal FiredPower Plants in the WorldGasification operations require more space than the original power plant

20. Extensions  and  Existing  CO2  Pipelines  in  Relation  to  Gasification  Projects

26. Direct Affect of Coal Mining In Indiana • In 2007, Indiana’s coal mining industry: • Employed 2968 people at 44 mines in 9 counties • Mined 34.231 million tons of coal valued at $985 million • This represents 0.1% of state employment, and 0.47% of state GDP, about 1% of southwest regional employment

27. Full Affect of Coal Industry In Indiana • The direct effect understates the full regional impact, as workers and owners locally spend their earnings • This full impact is measured by a regional multiplier, which measures the full spending impact of each direct effect dollar • The value of the regional multiplier for coal mining in Indiana is currently 2.2 • Thus, the full impact of coal mining on Indiana’s economy is $2167 million, not $985 million

28. Develop an in-depth scenario involving new rail infrastructure development USING INFRASTRUCTURE TO REDUCE AIR EMISSIONS Infrastructure changes including the “missing Links” will enable Indiana coal to be moved north but by-passing Terre Haute, Indianapolis and Chicago Allows for the access of Indiana coal to the northwest region. Connects Indiana’s North and South Ports via rail. Increase Indiana coal export market potential

29. Southwest/Northwest Indiana Economic Development Plan Future Idea Areas Indiana Coal Production Potential: • Indiana coal to make coke: reducing cost of steel production, reducing air emissions in the region 2.1 million tons NiSource coal replacement potential 6.8 million tons TOTAL Indiana Coal Potential 8.9 million tons Producing 8.9 million tons of coal adds: 742 direct mine workers* 2967 Ancillary workers * employment to South West IN   Total added annual economic activity in South West Indiana $530.3 million* Estimated cost of the Indiana/Illinois order rail line $ 50.0 million B) Newport Military Base transfer to Indiana/Purdue University: • Biomass to Energy test site • Wind Energy gasification supplement site • Provide syngas to Cayuga making it more usable during peak demand times *EXPANDING THE UTILIZATION OF INDIANA COALS Brian H. Bowen, Forrest D. Holland, F.T. Sparrow, Ronald L. Rardin, Douglas J. Gotham, Zuwei Yu, Anthony F. Black. Center for Coal Technology Research, Purdue University, 2004, page 20.

30. Evaluate every suggestionTrust but verify Clean Wind Energy?

31. Indiana Center for Coal Technology ResearchLocated in the Energy Center at Discovery Park, Purdue University We welcome visits Indiana Center for Coal Technology Research, CCTR 500 Central Dr., Potter 326 Purdue University West Lafayette, IN 47907-2022 Phone: 765-494-7037 Fax: 765-494-6298 http://www.purdue.edu/dp/energy/CCTR Marty W. Irwin, Director mwirwin@purdue.edu Dr. Brian Bowen, Deputy Director bhbowen@ecn.purdue.edu