Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal...
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![Page 1: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/1.jpg)
Coal-to-Liquids and the
Path to Independence
Jim Roberts
Chairman, President & CEO
Foundation Coal Corporation
![Page 2: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/2.jpg)
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U.S. Import DependencyCrude Oil Import Reliance
(Share of Total Consumption)
0%
10%
20%
30%
40%
50%
60%
70%
80%
1973 1978 1983 1988 1993 1998 2003
65%
26%
![Page 3: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/3.jpg)
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U.S. Import Dependency
Crude Oil Import Reliance(Share of Total Consumption)
10%
20%
30%
40%
50%
60%
70%
80%
1973 1978 1983 1988 1993 1998 2003 2015
75%
20062030
![Page 4: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/4.jpg)
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We’re Right to Be Concerned
U.S. energy challenge – it’s real
• requires an immediate response, but a long-term strategy
• need to address environmental concerns and energy needs simultaneously
![Page 5: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/5.jpg)
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The Specter of Energy Dependency
despite good intentions & strong rhetoric
…. our dependency grows
• U.S. imports rising to 75% by 2030
• we use 25% of world’s oil – hold only 3%
• dangers of dependency are growing
![Page 6: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/6.jpg)
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Dangers of Energy Dependency
reliance on imports rises…as reliability of supply falls
• geopolitical turmoil
• unfriendly or hostile regimes
• competition for energy from growing economies
• peaking world oil supply?
rising global demand for a dwindling supply
![Page 7: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/7.jpg)
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The Coal Boom
Coal is a resurgent industry …
• coal fuels over half of U.S. electric generation today
• U.S. electricity demand – up 50% by 2030
• domestic coal production will continue to grow
from a record 1.1 billion tons in 2005
to a new record in 2006 and coming years
![Page 8: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/8.jpg)
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live
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Co
st
/ MM
Btu
Natural Gas
It’s Affordable …
Oil
Coal
Behind Coal’s Resurgence
![Page 9: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/9.jpg)
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Behind Coal’s Resurgence
It’s abundant …
• U.S. has the world’s largest reserves
• 240-year domestic supply
• highly diversified … reserves in 26 states
![Page 10: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/10.jpg)
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The Energy of Coal States
Top 10 coal states have energy reserves totaling … 4,577 quads
On an energy equivalent basis, this compares to …
• U.S. oil reserves 131 quads• Saudi Arabia’s oil reserves 1,566 quads• Middle East oil reserves 4,104 quads
![Page 11: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/11.jpg)
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Behind Coal’s Resurgence
Secure Within Our Borders
![Page 12: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/12.jpg)
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U.S. coal reserves…
• are known – no need to explore or search
• aren’t subject to foreign disruption
• can’t be nationalized by foreign governments
• don’t have oceans to cross
Secure Within Our Borders
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Southern States Energy Board“American Energy Security”
Coal to the Rescue
• study by 16 governors and state legislatures
• bold plan for U.S. energy independence
• coal-to-liquids (CTL) is biggest single
component of overall plan
![Page 14: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/14.jpg)
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Coal-to-Liquids (CTL)
• producing premium transportation fuels from coal using existing technology
• the path to independence – key to reducing U.S. energy imports 5% per year over 20 years
• a proven track record – meeting 30% of South Africa total fuel needs today
• diversify fuel production away from the Gulf Coast
![Page 15: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/15.jpg)
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Behind Coal’s Resurgence
Secure Within Our Borders
![Page 16: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/16.jpg)
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Growing Interest in CTL
• U.S. Department of Defense
• commercial airline industry
• trucking and railroad industries
• China – $10 billion CTL commitment
![Page 17: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/17.jpg)
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Advantages of CTL Development
To states and the nation…
• high-wage jobs
• ultra-clean fuels
• greater energy security
![Page 18: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/18.jpg)
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Challenges to CTL Development
biggest impediment
– volatility of global energy prices
price uncertainty makes lenders skittish
on multi-billion-dollar CTL investments.
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Oil Price Volatility
Energy independence will remain elusive if our commitment waxes and wanes with the rise and fall of global oil prices.
EIA Average World CrudeOil Prices
0
10
20
30
40
50
60
70
1970 1975 1980 1985 1990 1995 2000 2005
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What States Can Do
States can advantage themselves and attract CTL investment by offering…
• long-term purchase agreements
• tax incentives
• non-recourse loans on matching basis
• streamlined regulatory process
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Coal – A Necessary Ingredient
without more coal production…
CTL incentives are meaningless
10,000 bbl/day plant = 2 million tons of coal
increased coal production will require…• faster, more certain permit process
• better inter-modal transportation system• new generation of young miners
![Page 22: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/22.jpg)
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An Effective Energy Policy
what we have:• piecemeal, short-term policies• energy supply issues & environmental concerns
considered in isolation• policy driven by news cycle
What we need:• long-term, comprehensive policies• Integrated energy & environmental policies• policy driven by strategic needs and $$$ to match
![Page 23: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/23.jpg)
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The Integration of Energy & Environmental Policy
Climate Change – an example of what’s broken
• Enhance domestic supply or ration coal use?
• Use more coal … but not mine it?
• Limit U.S. coal use … but ignore China?
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The China Syndrome
Unilateral action in the U.S. will not appreciably improve global environment … not while China:
• builds a new coal-fired power plant every 5 days
• in 20 years, will add twice the amount of GHG
emissions as would be reduced by Kyoto Protocol
• in 20 years, will emit more GHGs than the U.S.
![Page 25: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/25.jpg)
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Technology – The Path Forward
Carbon Sequestration the technological path to …
• using our most abundant domestic fuel
• capturing and storing CO2
• addressing climate change in rapidly growing economies through export of technology
• while minimizing the impact on U.S. economy
![Page 26: Coal-to-Liquids and the Path to Independence Jim Roberts Chairman, President & CEO Foundation Coal Corporation.](https://reader034.fdocuments.in/reader034/viewer/2022051516/56649e265503460f94b15acd/html5/thumbnails/26.jpg)
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Asia-Pacific Partnership
AP6: a model technology program
• multi-lateral agreement to develop and share GHG reduction technologies
• participating nations are Australia, China, India, Japan, Korea, and the U.S. – among the world’s leading coal producers and consumers
• Caterpillar-China agreement on methane-capture technology – producing GHG emission reductions equal to 1% of total Kyoto reductions
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Technology – A Better Approach
10 years ago, no one would have thought …
• Yahoo would have 380 million users daily
• China would be on track to produce 10% of its energy needs from CTL
skeptics overlook the power of
technological solutions around us
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Benefits of Better Energy Policy
• coal’s potential is unrivalled
• can help free us from our dangerous dependence on foreign energy
• states can benefit from coal’s new growth and the development of CTL