By Kevin Collins, President & CEO

We’ve always felt there was great potential for the blending of K-Fuel® with other coals to improve performance for utility and industrial boilers, especially in the East and Midwest, which are served by our mining and marketing subsidiary Buckey Industrial Mining.

The latest round of test burn results provides further evidence of this potential. We tested K-Fuel® blended with the coal normally used at a utility power plant in western Pennsylvania and found that we cut mercury emissions by 82 percent when you compare the amount of mercury in the raw coal normally burned with the stack emissions from the K-Fuel blend.

Pennsylvania and about half of the 50 states are implementing mercury emissions regulations that are more stringent than federal rules, and power plants are looking at big bills for post-combustion cleanup technology to meet these new requirements.

One key finding of this test was that by using a K-Fuel® blend, a utility could cut significantly, in this case by an estimated two-thirds, the amount of activated carbon it would need to inject into the plant in order to remove the mercury and meet the standards. 

Activated carbon injection is a post combustion approach to addressing mercury and it is expensive. The activated carbon itself can cost between $1.00 and $1.40 per pound.

We’ve published an executive summary of the test results on our web site, and you can find it at 2008 Evergreen Articles and Reports.

PROGRESS IN INDONESIA

Last week we announced the advancement to Phase II detailed engineering and economic analysis of a deal with a major Indonesian mining group to build a 1.5 million ton per year K-Fuel® refinery on the Indonesian island of Kalimantan.

In Phase I we did rigorous, and I mean rigorous, testing of how the K-Fuel® process acted on Kalimantan coal, and it acted very well, thank you. Our process cut moisture by 64 percent and bumped the heat value by 52 percent.

The plan is to barge the refined coal to Japanese, Chinese and even Indian markets. As part of our Phase I work we tested the affects of long-distance barge transport on our refined coal and the tests showed no issues with that type of transport.

Now, in this second phase of our work, we will dive deeper into the engineering, marketing and economic issues of this project, although the initial economic work done by all the parties shows good viability.

After we complete Phase II, Phase III will entail a definitive deal to construct that includes procurement of construction materials from lower cost Asian sources.

The market is ripe for our technology.  Economic growth in Asia has raised coal demand and prices for bituminous coal, which is in tight supply. Asia has huge reserves of sub-bituminous and lignite coals, but they’re located vast distances from key markets. That’s where we come in and why we’re seeing such strong Asian interest in our process.

Sumitomo remains fully engaged with us and enthusiastic in its support for our potential in Asia.

THE FATE OF FUTURE GEN

On another topic, I can’t help but point out that the US Government has pulled its funding for the Future Gen IGCC with CCS project in Illinois.  We’ve said for many months that while IGCC with CCS is something that should be pursued long term, it is not anything that we can hang our hat on in the next 5, 10 or even 20 years.  The costs, liabilities and science are all still uncertain.

Meanwhile, coal continues to create 12 of the 24 hours a day of electricity that we all use, and it will continue to do so for the foreseeable future. That’s why we need a technology that bridges the gap between the status quo and future gen, and we believe that our pre-combustion technology can help fill that gap.