Pyrolysis RD Presentation

1. Pyrolysis R&D Presentation AWMA Meeting September 25, 2008 Timothy McDonald PE, MBA

3. The Issues Green House Gases - CO2, Nitric Oxide, Methane Climate change impact on food, water, temperatures Nitrate pollution of aquifers Forests - water, fire, beetles, nutrients, thinning / management costs Farms - manure, harvest debris, orchard clippings, shells, water, fertilizer and fuel costs Municipalities - water, green wastes, sewage sludge Farm and forest “Burn Pile” emissions Soil sterilization under “Burn Piles” ACC Renewable Mandate to regulated electric utilities CO2 Emissions Credits (future tax?) Fuel availability and costs

4. Arizona Forests Overgrown thickets Depletion of limited water from rainfall / snow pack Multi-year drought Bark beetles: increasing forest-fire threat Explosive crown fires Soil erosion after destructive crown-fires Algae blooms from ash & soil nutrient runoff into lakes Budget-limited forest fuel thinning initiatives Minimal-to-none small diameter timber industries Forest waste disposal – “Burn Piles” or “Controlled Burns”

5. The Results

6. Arizona CAFOs – Manure ~ 168 CAFO farm sites ~ 600,000 cows & pigs ~ 3,600,000 chickens Manure is a limiting factor on operations Also a community issue

7. Arizona Biomass Forest and woodland waste 12 Million acres of forest and woodlands 350,000 acres managed per year 4.5 Million tons per year of waste Agriculture waste Cotton gin trash, orchard residue, straw 200,000 tons of material per year Urban green waste Primarily from Phoenix and Tucson 95,000 tons per year

8. Biomass Conversion Options Composting Aerobic digestion (wet slurries) Anaerobic Digestion (wet slurries) Torrefied biomass (ie., charcoal; see E-Coal) Direct combustion (ex., ABITIBI biomass power plant) Gasification (dried and chipped biomass) Co-firing with coal, oil or natural gas Pyrolysis conversion (syngas, water, oils, char)

9. Biomass Conversion Issues Wet biomass should be processed on-site (hauling costs) Air, Water and Solid Waste permit issues Efficient conversion system size vs. sufficient long-term quantities of biomass within 50 miles of site Many biomass materials have zero inherent value and are gathered and burned on-site Power plant water usage and disposal issues Power plant reliability and interconnection to the grid Pyrolytic oil acidity and stability

10. Biomass Power Plant Siting Criteria Site just a few miles from a utility distribution substation at 69kV or 12.47kV – dedicated grid interconnect Zoning / emission constraints - height, noise, NOx, PM 4 acre site min w/ fuel delivery, processing and storage Min water supply of 5,000 gpd/MW (w/ $$ dry tower) Hybrid wet / dry cooling towers – slightly more water Municipal sewage system – easiest wastewater solution Zero Liquid Discharge system (ZLD), septic service or “Culligan Man” – all costly options Adequate sustainable fuel supply within 50 miles 9 to15 MW scale co-gen power plant – O&M parameters Host-site partnership – biomass disposal, shared labor, joint-use facilities and process steam

11. Cholla Biomass Co-Firing Analysis 1000 MW pulverized coal plant with 4 units 15 to 150MW biomass co-firing application Higher fuel efficiency & lower % O&M E-Coal* co-firing analysis may be performed in 2009 Lower emissions expected – SOx, Ash, Mercury, CO2 NOx same or slightly higher (w/ higher net MW) 15MW demo project demo initially on Unit 1 in 2010(?) *E-Coal is a densified biomass charcoal product made by New Earth Renewable Energy Inc.

14. ½ TPD Portable Pyrolysis System

15. Demo Operational Issues ADEQ air permit waiver Pinal County air permit APP water issues (?) – agricultural / forest Subtitle D waste issues (?) – agricultural / forest APS Self-Insurance ($2M deductible coverage) University of Arizona R&D and RRAC site agreements Temporary O&M technician / APS technician(s) MSDS documentation and NFPA diamond labels Outdoor shelter, barrels, tanks, tools, safety & misc. other equipment Dryer condensate wastewater – chemical disposal or septic service Shipments to research labs / Bio-Refinery facility(s) - TBD Pyrolysis products disposal: co-firing and/or coal dust suppression

16. Pyrolysis System Feedstocks Sweet sorghum Cotton crop debris Nut shells Orchard debris Salt cedar Mesquite Misc. farm crop wastes Manures Pine trees Pinion and juniper trees Other green wastes…..

18. Fast Pyrolysis Products Essential Oil Seperated from dryer condensate water Chemical, pharmaceutical and cosmetic products Pyrolytic Oil Liquid fuels, coal-dust suppression, green chemicals Polymerized solid fuel / fertilizer supplement product Char System thermal heat source Charcoal granules / pellets Non-condensable gases (H2, CO, Oil) Dryer and pyrolysis heat source Fisher Tropsch catalytic conversion of syngas into Diesel

19. Pyrolysis Oil Dark brown viscous liquid Strong smoky odor Corrosive with acidic ph Polymerizes into solid if reheated Phase separation in container “A” Phase: water & acids Organic acids for fertilizer “B” Phase: cellulosic oils Phenols suitable for fuels and chemicals “C” Phase: hemi-cellulosic oils Fuel and chemical feedstock “D” Phase: lignin oils w/ char dust Polymerize into solid fuel Coal dust suppression w/ >BTU Binder for char granules / pellets

20. Pyrolysis Char Charcoal powder Contains inorganic minerals from biomass Will contain some oils from pyrolysis process Form granules or pellets using lignin-oil binder Co-fire pellets w/ coal Gasification - FT - Diesel Activated carbon filters(?) Time-released fertilizer

21. Bio-Refinery Centralized location(s) Multiple biomass sources within 200 mile region Economies of scale Co-gen processing plant Similar to petroleum refinery and products Adjacent to railroad and freeway for hauling Near CNG pipeline for methane distribution

22. Bio-Refinery Products Resins Polymers Co-polymers Adhesives Food flavorings Fragrances Chemical feedstocks Synthetic methane Liquid and solid fuels Fertilizer(s) - Tera Preta

23. Terra Preta “Dark Earth” (Portuguese) Manufactured(?) by Amazon Basin natives over 1000 years ago This manufactured soil is still active and viable today Better crops than with chemical fertilizers in adjacent fields Less water and fertilizer required per crop cycle!! Soil can be “harvested” – will “regrow” within a decade!! Soil flora and fauna appear to thrive in the Terra Preta Anthropologists and bio-chemists not sure how made One theory is that all village wastes were collected, sealed in clay pots and cooked in fires. Cooled pots were then carried into cleared field and broken open. The resulting combined mass of pyrolysis char and oils were then worked into the soil. Another theory is that it was a combination of how they burned down the large trees, with lots of charcoal residue, and the addition of all village wastes directly onto the fields.

25. Pyrolysis System Research Goals Verification of operation and maintenance parameters Process a range of biomass and analyze results Control settings to maximize char vs. oil products Suitability for farm co-op, community or waste disposal company Pyrolysis water recovery using char filtration Oil stabilization and acidity elimination – centrifuge tests Produce pellet / granulated char w/ pyrolytic lignin-oil binder Polymerize whole / lignin oil into solids Cellulosic-oil processed into fuels / chemical feedstocks Co-firing tests with pulverized char pellets and pyrolytic lignin-oil applied as coal dust suppression w/ increased BTU Produce char-based fertilizer supplement(s) Manufacture “Terra Preta” soil

26. Pyrolysis Project Vision/Results Carbon sequestration: CO2 credits Biomass co-firing: ACC Renewables Mandate New sources of fuels Sustainable chemical feed-stocks Forest fuel thinning projects w/o subsidiary payments Farm crop and manure waste conversion to profits Reduce water and fertilizer needed per crop cycle Squeeze every nickel of value out of waste biomass ie., resolve WATER / ENERGY / POLLUTION issues

27. 50 TPD Portable Pyrolysis System

28. Forest-Industries Example Vertical-integration of fuels reduction operations, lumber milling, composites and Bio-Oil manufacturing and refining Gasification / pyrolysis / distillation / screw compression and heating process alternatives Bio-Oil Products: fuels, chemical feed stocks, flavorings, resins, polymers, solvents, adhesives …. Co-products expand revenues - $$$$$ Transportation of finished or liquid / densified products is much more economical than the raw biomass material Portable pyrolysis systems provide local community opportunities in conjunction w/ regional Bio-Refineries

30. The Alternative ………….