53,000 BPD COAL-TO-LIQUIDS
FACILITY WELLSVILLE, OHIO September 2007
Baard Energy, L.L.C. ● 9013
NE Highway 99 ● Suite S ● Vancouver, WA 98665
A. The Company
Baard Energy, L.L.C.
(“Baard”), through its affiliate Ohio River Clean Fuels, L.L.C.
(“ORCF” or “the Company”), has commenced development of a
53,000 barrel per day) coal-to-liquids "CTL" facility
at Wellsville, Ohio (the “Project”). Baard and its affiliated
companies has over 20 years of experience in the design,
of a variety of energy projects,
including natural gas powered electric generating facilities,
ethanol production plants, biodiesel production plants, and
coal to liquids projects. Baard is a private project
development company based in Vancouver, Washington.
B. The Project
high energy prices coupled with increased concern about energy
security has led to a focus on the development of domestically
sourced fuel supplies, especially those that have desirable
emissions profiles. With the largest coal reserves in the
world, the U.S. is particularly well-positioned for the
development of coal-to-liquids projects for the production of
Fischer-Tropsch (“FT”) fuel. Many parties, including the
Department of Defense, have proclaimed their preference for
the widespread adoption of FT fuel. States with significant
coal reserves have also been active proponents for various CTL
projects. Below is a simple block flow diagram depicting the
The Company intends
to develop and construct the Project in three phases – a first
phase that consists of a 17,500 bpd CTL plant, followed by a
second and third phases to expand the aggregate capacity to
53,000 bpd. Each phase will involve a production train that
consists of two gasifiers feeding into one FT reactor. One
refining process will be constructed during the first phase
and will have sufficient capacity to handle the output from
all three trains. In addition, the Project will utilize the
process developed by Linde and Lurgi to clean,
isolate and capture carbon dioxide for use in enhanced oil
recovery (“EOR”) in neighboring oil fields in Eastern Ohio.
The Project has
partnered with the Columbiana County Port Authority (“CCPA”)
to secure a 1200 acre site adjacent to the Ohio River. The
site has easy barge access, rail access through the Norfolk
Southern main lines and proximity to abundant eastern
bituminous coal reserves. The site is located within 20 miles
of oil fields which are well-suited for the injection of
carbon dioxide captured from the CTL production process for
EOR. The Project expects to use a combination of eastern
bituminous coal and biomass to produce fuels including ultra
low sulfur FT diesel, jet fuel and naphtha, all with a lower
emissions profile than traditional petroleum based products.
The Company has
already commenced permitting the facility with the State of
Ohio. The Company and Ohio EPA have collaborated in an
iterative review process which allowed submittal of the permit
applications in process “modules”. This will significantly
reduce the anticipated review process time. The Company
expects that all the process modules for the Air and Water
permits will be fully submitted by September, 2007 and be
subject to a rapid review by the regulating authorities.
Below is a basic overview of the
inputs and outputs of the Project both for Phase I and fully
The Project will
utilize both coal and biomass as feedstock. The Company is
currently in discussion with existing area coal companies to
supply the entire plant’s feedstock need pursuant to 10 year
agreements that will match the volumes needed to fulfill the
Project’s contractual offtake commitments. When fully
developed, the project will use approximately 28,000 tons of
coal each day. Biomass can be substituted for the coal up to
approximately 30% by weight.
The Project is
located in Wellsville, OH, near the border of West Virginia,
Pennsylvania, and Ohio. This location is the heart of the coal
corridor in the Midwest United States. These three states have
combined recoverable reserves of over 1,285 million tons,
which is sufficient to satisfy the Project’s coal needs for
the life of the plant. The Project’s rail and river access
facilitates coal procurement from various sources. The State
of Ohio contains over 300 million tons of extractable reserves
of eastern bituminous coals as well as existing mines/mining
technology and other resources necessary to support a large
CTL plant. The State’s mining industry is currently producing
approximately 20 million tons per year, over 80% of which is
delivered to the utility industry. However, the coal
industry’s ability to increase coal usage is presently limited
by the higher sulfur levels and inability for the existing
coal fleet to use these coals without significant investment
in air pollution controls. This high sulfur coal can be
utilized by the Project because it is able to economically
remove the sulfur, as well as other harmful constituents, such
as mercury, in the gas-cleanup section of the plant.
Therefore, the Project will not only have access to
significant coal reserves that are currently idled, but it
also expects to be able to procure this coal at a discount to
coal with lower sulfur content. Due to its advantageous
location, the Project can also access cost-competitive coal
supplies from neighboring coal producing states such as
Pennsylvania, West Virginia, Kentucky, Illinois and Indiana.
Petroleum coke reserves are also available to the Project from
numerous refinery producers located along the Ohio River
The following table
illustrates that there is ample coal supply in the surrounding
region to meet the requirements of the Project without putting
excess pressure on regional coal prices. In fact, coal
production in the Appalachian Region decreased in 2006 by 6.8
million tons as a result of decreased demand from coal-based
electricity generation, decreased exports to other regions,
and increased imports of compliant (low sulfur) coal from
The Company has been
in negotiations with the Department of Defense (“DOD”) for the
sale of up to half of the Project’s FT fuel output. The
Company has provided the Defense Energy Supply Center with a
significant amount of information as the DOD continues its
internal development to utilize synthetic fuels. The FT fuels
produced from the Project would fit the profile of DOD’s fuel
needs. The DOD has been leading efforts to secure suitable,
domestically produced alternative fuels for military use. In
an official letter to Airmen in September of 2006, Secretary
of the Air Force Michael W. Wynne stated that energy
independence is a key element to ensuring the United States’
economic and national security, and an assured domestic supply
of fuel and an aggressive energy conservation plan will
benefit the entire Air Force2.
As such, the Air Force and the Department of Defense are
aggressively pursuing FT fuels as a key component to their
energy independence strategy.
The Company has also discussed
offtake contracts with several petroleum-based businesses that
have expressed interest in acquiring significant volumes of
synthetic fuel, including FT wax, FT diesel and FT naphtha.
Furthermore, the Company has received contingent commitments
from several large commodity trading firms which have
indicated willingness to enter into an offtake agreement for
the synthetic fuels produced by the Project.
In addition to the energy offtake,
the Company has been in conversations with Marathon about
using the carbon stream isolated from the Project for the
purpose of enhanced oil recovery at oil fields located
approximately 20 miles from the Project site. This will serve
to enhance the economics of the Project through the sale of
the carbon byproduct and greatly reduce the overall carbon
Coal Supply and Demand: 2006 Review, p. 3. Published by U.S.
Energy Information Administration
f Favorable Industry Dynamics.
Sustained high energy prices and concerns about energy
security have spurred the growth prospects of domestic sources
of alternative energy, including CTL projects. The abundance
of low cost coal coupled with high oil prices makes CTL
projects economically attractive.
f Government Support for FT
Fuel. The Department of Defense (“DOD”) has proclaimed
its preference for FT fuels and has a test program on its
usage in its aircrafts under way. FT fuels produced by the
Project would fulfill the DOD’s desire for
domestically-sourced, high quality fuel.
f Superior Product and Process.
FT fuels have superior emission profiles to traditional
petroleum products and the production process can be adjusted
to maximize the production of a particular type of fuel –
diesel, jet fuel, naphtha - depending on relative market
prices and contractual commitments. The FT process has been
deployed for decades in South Africa, Germany and other places
and is technologically proven.
f Strategic Location. The
site is adjacent to significant reserves of Ohio, West
Virginia and Pennsylvania coal and biomass feedstock. Ready
access to the largest river port in Ohio as well as the
Norfolk Southern main lines will facilitate transportation of
feedstock and products.
f Carbon Sequestration
Capability. The Project is strategically located so that
the carbon dioxide produced can be readily piped to nearby oil
fields for injection for enhanced oil recovery. As a result,
the Project has a desirable greenhouse gas emissions profile
relative to other CTL projects without such capability. In
addition, carbon sequestration, when combined with biomass
use, makes the process less carbon-intensive than traditional
f Robust Commercial Framework.
The Project expects to enter into long-term coal and biomass
feedstock supply as well as product offtake agreements. The
Project also expects to enter into an EPC contract with a
consortium of leading engineering and construction companies
with terms that could facilitate project financing.
f Strong Local Support. The
State of Ohio has provided financial and infrastructure
support for the Project in the form of access to tax exempt
project debt and assistance with the acquisition of the
Wellsville Ohio site.
f Experienced Developer.
Baard has developed and constructed seven alternative energy
projects over the past 20 years. Baard developed an 88 million
gallon per year Ethanol plant in Ravenna, Nebraska and a 55
million gallon per year Ethanol plant in Coshocton, Ohio. A
third 110 million gallon per year ethanol development in Iowa
is fully permitted and financing is currently being
completed. Baard successfully developed over 1,200 MW of
electrical generation at four separate facilities in the last
twenty years and built a retail electric marketing business in
Michigan, Illinois, and Texas.
Contact Baard Energy
NE HWY 99, Ste S